rana

Chinese Solar Stocks Present Compelling Value

TSL - with the option to the underwriters they will raise close to 140M$.
if we take low conversion price of 40$ per ADS we get 3.5M additional shares. if we add this to the current count we have around 28.6M shares.
if we had this count in this Q the current estimated EPS for Q2 2008 would have been (under the assumption of the mid range, which i agree with jack that it's more likely we'll be at the higher end, but we always prefer being conservative):
73-74
this means we have a 12-13% reduction in the EPS.
the important thing is that the cloud of financing will be lifted (at least for the short term).
margins are still a problem, but it goes to all the industry and the higher growth might compensate for that partially.
regarding the stock price - if we take the new dilution into account and assume 10% EPS growth for each coming Q and use the mediam assumption for the current Q - we get EPS around 3$ (this is super conservative if we assume no more margin erosion). we have 2008 PE around 11 and 2009 is under 8.5 assuming EPS of 4$ for 2009 (33% EPS growth for 2009).
i like the numbers, but off course everyone needs to make thier own decisions regarding price vs. risk and there are clouds out there in the futureas we don't have a clue regarding which technology will be the big winner, or how silicon prices will be in the future (some new companies that are building new silicon plants may not be able to raise enough money to complete the new plants, see HOKU as an example) and so many other uncertainties that with the current environment of risk aversion is impacting the prices of risky assets.

Chinese Solar Stocks Present Compelling Value

SPIR 2009 estimated PE is under 10 now.
the stock created a falling wedge formation with bullish divergence on the RSI on 3 points and the same with the money flow.
i'm long SPIR and adding.

Chinese Solar Stocks Present Compelling Value

the latest annoucments from CSIQ TSL lead me to believe that the silicon shortage is almost certain to stay with us at least till 2009, which is still unclear also.
as i posted before regarding pricing of wafers in taiwan, the prices moved up in June which brings more pressure to the market.

Chinese Solar Stocks Present Compelling Value

SOL book to bill in the 2nd Q was over 1GW bookings to an estimated 75-80MW shipments. nice ratio.
i looked at each news item in the Q to get the bookings number and the estimated shipments from the 1st Q report, the guidance for Q2.
i didn't calculate the exact average period of the bookings, but if it's for 5-6 years, or 24 quarters, the average addition per Q is over 40MW. do the math.

Chinese Solar Stocks Present Compelling Value

TSL gave preliminary 2nd Q results.
if we take the lower end of the results we get 200M$ sales and 14% operating margin. this gives us 28M$ operating profit.
if we assume higher interest expenses, net, and lower exchange loss, which will offset each other, and 10% tax expense we get:
28000000-6200000=21800...
EPS - 19620000/25130000=0.78...
if we use the median:
202500000*0.146=295650...
EPS - 0.84
we have a range of 0.78-0.89 between the high and low end, depending on exchange loss, interest expenses, net, and income tax.
the median gives us 0.09$ better than estimates.
a big question will be the margins.

Chinese Solar Stocks Present Compelling Value

dicki
there is no talk about TSL (which i'm long) poly positioning but what if..
with that said, it seems you don't know how poly contracts work, so you better learn them first and than we can talk about possible scenarios.

Chinese Solar Stocks Present Compelling Value

there is no way to compare WFR to TSL.
if we'll get growing demand next year for silicon from the semiconductors industry, WFR will probably go balistic while TSL will go down hill.
for this reason alone they can't be compared and there are other reasons which i won't even mention.
i am a solar fan myself, but i am realistic and as long as the markets are bearish there will be negative premium for high growth high risk companies.