ccerenzie

LDK Solar Earnings and the Dark Cloud of Polysilicon Shortages

LDK has more than doubled it's sales and capacity over the past year. Stop and consider that for a moment. In the next nine months they will double again assuming everything goes as committed. In 09, the company will DOUBLE AGAIN. By the end of 09, their sales and capacity will be FOUR times what it is today. Sales and capacity will be more than EIGHT times what it was in Q1 07 by EOY 09....
This rapid increase in scale has to have some inefficiencies associated with it. For these analysts/writers to somehow imply or expect this hyper growth rate to occur without flaws in efficiency and margin is beyond my comprehension. Being from a manufacturing company and trained in Lean Management philosophies, it's difficult for me to imagine how the management can address every detail effectively and keep the projects coming in on time.
This company and the other solars are going to have hiccups. Its a virtual certainty. To sell LDK when it has so much going for it, including RAMPING PROFITS, is unthinkable for the investor. Think about it...we could be looking at Q1 10 profits of $1.76. Perhaps more if things go better than expected. It's only the trader that would consider selling now when the very real potential of quadrupling profits are potentially less than two years away....There is risk as to whether they pull it off, but even if LDK ONLY doubles capacity between now and the end of 09, that's an incredible story/company.

I've read the various articles published by Barron's and others, and I say "Thank you" to all of them for giving me the opportunity to buy the stock at artificially lower prices. And to you Trader Mark, "Thank you" as well. I'll be buying more while the lemmings take their walk over the next couple of days
Good luck to all.