dicki31785

As Solar Sector Flies, Pay Attention to Values

I wouldn't discount the risk and the capital, needed, involved becoming a vertical player....surely it is a nice idea and everybody in the space seems to be heading that way....Since you can save a "couple" basis points of margin at every step of the supply chain....but you gotta be good at what you are doing....You can't jsut become a vertically integrated player and thats the end of the story....it involves a bit more than that....

my favorites from China are STP, SOLF, TSL ( I am long TSL)...SOLF i liked because it showed the most resiliency in the downturn (rev % change Q3 08 to Q1 09)STP because of Pluto...once the get their costs under better control they should take off(not spending 80 million on office HQ and high executive compensation would be a good idea etc., etc.)...and Trina my absolute favorite...I just like everything about them....we will see if I am right in a couple hours...the run up leaves lots of room for disappointment...but I am fairly optimistic that they managed to steer through Q1 quiet well...guesstimate of $140-160 mil in rev and a small loss....

With Kind Regards From Germany

CW

Chinese Solar Stocks Present Compelling Value

I do agree with you their Rana the increased REV guidance was nice...the convert doesn't hurt too much since they did not "over do it"...but the margin does leave some room for concern...I expected it to actually be at the very minimum equal to the Q1 margin...And am sort of disappointed by that...Obviously the beat was nice....two times beating in a little more than a month...(since last Q numbers came out so late)Well we will have to wait for audited numbers/CC for more information concerning that...but certainly not bad news today....

@Jack I do agree with you that solely looking at federal tax incentives doesn't give you a clear picture...But still there are only a handful of states who provide incentives enough to get solar off the ground...I mean a considerable amount....Not the tiny amounts of today...and concerning Spain the incentive cut will be bigger than in Germany but that is no reason for concern....A problem would be a cap....But as I stated above i doubt a cap will come and if it does 750 MW is realistic, and not the 250 MW # that some analysts were throwing around...

And it's looking like my prediction from 6 months ago that Italy will be huge is slowly, but surely, coming true....especially in the South of Italy it can be used very well....Also Switzerland increased incentives this week and the package they proposed and implemented looks quiet decent(but it is a small country but every MW helps)....So i totally agree with you that incentives will increase rather than decrease globally but it is really time for y'all to step up to the plate...

It just cant be that the best idea, so far, is to drill in Alaska (if I understood correctly in a wildlife refuge)!!!!I mean that leaves me speechless....And makes me, to be honest, VERY angry...We all live on this planet together and y'all are doing your best to destroy it...First for years driving your huge SUV's, Air conditioning 24/7 everywhere, and your industry being quiet wasteful concerning fuels when they were cheap and that leads to the destruction of OUR planet...and then as if nothing was learned the best idea is to drill in Alaska....The point is that we have great opportunities and that is due to OUR incentives which got Solar, Wind,etc. off the ground...so please use the technologies that are only available because we subsidized them:)I guess i wasn't so speechless after all;)...With kind regards from Germany CW

PS and if we can "save" the planet and "all" earn a good amount of money while doing it lets go for it right!?!:)Sorry for the mix of politics, lifestyle, into a discussion about stocks but I do believe it is important to talk about these issues...and I am not looking to offend anyone as I lived in your country for a few years and quiet enjoyed my time their....But as I said these issues are important to talk about...though they don't really pertain when talking about stocks...

Chinese Solar Stocks Present Compelling Value

Dear Rana I have many friends at the EU commission for energy and I know a couple guys working for Wacker Chemie(one of the biggest, or the biggest I am not quiet sure, poly producers in the world) so please do not worry about my knowledge about poly contracts, but I do thank you very much for your concern:)

To Vitamin J indeed that comparison is a bit far fetched as I stated before...And I was having quiet the poor day and when i read your guys' comments...you know how it goes:)

@Eric Rulmat - I think you are absolutely right if you are looking for value(yes I said value in the same sentence as solar shares)/growth it is the right time to go for it...These companies trading at these ridiculous P/E ratios...

And they (analysts) say it is bad to invest in Solar because of Spain, and its potential introduction of a 250 MW cap....anyone making that assumption is clearly uninformed about Spain....If they do introduce a cap, which I doubt, it will be around 750 MW(Spains solar industry just simply won't let it happen and many other reasons for that matter)....what could happen is that they slash incentives by 20-30% which wouldn't hurt the Spanish market as much as one would expect(at least in Spain due to its perfect placing on the "solar map")....And the next boom market for solar is Italy which will be the next Spain....And Trina's positioning their is absolutely marvelous as you can see in the contracts signed in the past few weeks their...I think Trina and SPWR (due to the acquisition they made last year) have the best position in that rapidly expanding market....

I think it is quiet obvious...that companies that grow 100%(sometimes more, sometimes less) y-o-y need some money in order to finance their rapid expansion...Obviously they burn more money than they take in at the moment...How could you not with ramping of X amount of lines a year and investing in long-term poly contracts...expanding capacity in some cases three or four fold...(sometimes less but certainly not the point)...Alternative energies are there to stay....

The last advanced country that has to make the step is your guys' country(and your little/big brother the UK...depending how you look at it;))...And it is quiet shameful what is happening with renewables in the US....and I certainly love how everybody complains about Gas prices/Oil prices but nobody looks for solutions...the next "great" American plan is to drill in Alaska....that is the solution...is it really?Quiet impressive:)In any case we are not here to talk politics, otherwise I probably wouldn't stop typing in any case;)

To bring this long post to an end...As you stated the main point you were trying to make is that the companies in the solar industries are just hitting speed bumps...and that is certainly the case...Would I sell my shares because of that no way...Each day is another day shopping for solar shares at ridiculous valuations....The more the American public, and the world(besides the EU), gets involved and begins to grasp what Solar can do for us in the long term the greater will be our returns so enjoy because I do not know how many oppurtunities you will get buying shares at these prices(not saying it couldn't go down a bit more in this bear market but I think we are close to bottoming out)....Kind regards from Germany CW

PS @All....I do encourage you to read Jack Jetiv articles about the solar space I have been involved quiet some time...with plenty of different stocks...But both TSL and CSIQ were his picks(well he wrote some articles and I got more informed about them and tend to agree with him in most things)....With one working out quiet well the other one lagging...But IMO he has a great understanding for the industry....But also bigger companies besides the ones Jack mentioned are worth other looks....with SPWR(probably the best managed company in the whole solar space),LDK, STP...Please beware of FSLR everyone.....check out all the facts there are....Cheap doesn't mean good:)(certainly not meaning their valuation,but the cost of their inefficient panels when size of the area is constrained)

Long ABX, CSIQ, TSL (No shorts at the moment but if FSLR hits $300...)

Chinese Solar Stocks Present Compelling Value

If you guys havent already heard from the uninformed comments posted here...TSL has forward contracts in poly....which would lower their poly costs next year from 12-17%....what WFR will do no clue but that is not my point...

if you guys don't know what you are talking about concerning Trina's Poly positioning...I just wouldn't talk about it...So yeah Rana and Vitamin J do some research or just listen to the CC but thinking or doing some research before you talk is always a good idea:)kind regards from Germany CW

PS good article though some tough comparisons to make:)

Long ABX, CSIQ, TSL

The 'Problem' With Solar Companies is Not Really a Problem

Atticvs research - We have the $1.05 Non Silicon costs + 1.40 silicon costs (2.45) at the end of 2008...I expect that to drop to .85 N.S.C(You can actually move this number down quiet a lot depending on the learning curve)+ .70 silicon costs in 2010...That would put us at 1.55 production costs...The silicon costs are due to come down very sharply for two main reasons,1. The market will be swamped by silicon...I know a guy from Wacker Chemie...(German poly producer) and they expect the market to be swamped and thus opted for a big junk of forward contracts in the future...Also I expect the Grams/Watt used in Wafers to come down to about 4-5 g at least....Then you also have to model what energy prices will be like...That depends on what you believe...In any case this is an aggressive model and picture that I am painting...obviously you can tweak the numbers any way you want to...But I Believe ASP costs will be around 1.50 around that time...Which will put it an Grid Parity in all sunny regions at the very least....

And do not get me started on thin film....their are costs involved their that one does not realize I think the efficiency of the cells is much more important than the cost actually...Obviously not in the long term but the thin film advantage that FSLR has for example will be eaten up real quick because the biggest solar opportunity is on factories...or office buildings....for now....and their efficiency counts and not the cost I mean it is great that FSLR panels are so cheap but you need an abundance of land....then you need to get hooked up to network etc.,etc. So in the places space is a concern and that is just about everywhere especially in Europe it is important to go for efficiency...Where the density is unbelievably high...Otherwise you can use cheaper models....But FSLR is doomed anyhow...but that is for another day....I keep on hearing thus numbers thrown around that you mentioned how is supposed to reach them?Nanosolar...?!?Th... Chinese players are set up well for the future....At least when considering CSIQ,LDK,SOL,STP,TSL..... the only question is how will demand look like in 2009...That is the only year these stocks could get hurt bad....But IMO Spain will not introduce a cap at all...Why would they...They are reaching grid parity next year....They will reduce feed in tariffs about 20 percent and why shouldn't they....the demand will still be their...even with less subsidies...and don't forget that many American/Chinese players will have a huge exchange rate advantage...(With the American adv. bound to stay for awhile with that interest policy and Chinas exchange rate policy is well known...but I guess they will edge up on the Euro in medium to long-term)This will make it easier for these companies to compete...But basically what we need is an incentive package for the US and Spain will work out by itself people(banks) just want solars at cheaper prices....With kind regards from Germany and happy 4th of July...CW

The 'Problem' With Solar Companies is Not Really a Problem

Who cares about the analysts I live in Europe and I know what is going to happen next probably a cap of 1GW people throwing around numbers such as 300 MW for Spain it is utterly crazy why would spain do that?Their place on the solar map is excellent in actuality in Spain we will reach Grip parity next year...yes next year if we haven't already reached it....so incentives will come down surely but the demand for a cost cutting technology will not drop as much as the analysts say.....even if incentives are dropped 35%...the effects are much smaller especially for American solar makers or Chinese...due to a favorable exchange rate which will only get better due to FED policy....

Concerning cash flow...can't wait until the first solar companies present in that case SPWR..which has an a huge exchange rate advantage they will blow numbers away and raise guidance...again...To GS these people are criminals but banks need money too...I think in their case they should worry about themselves not being able to pay their debt(maybe not in GS's case)....In any case I am so long TSL look for 75 cents next Q....and an expanding margin in the second half of 2008 and they have 60% of their production pre-sold for 2009...(excluding the new contract with the Italian firm)...So that is a pretty stable outlook with a constant flow of cash income either GS didn't research well or want to kill the stock, my guess tends towards the latter...and by 2010 Grid parity will be reached by Trina...(obviously not in all geographic locations but in most)....and at that PE it is just sooooo cheap...well make a picture for yourself...in any case solar is the answer to a lot of problems now the US has to support it to increase the market(demand) for the solar makers...this is the greatest and cheapest opportunity to get into solar you will see for quiet a while...kind regards from Germany CW

Which Solar Stocks Will Continue To Shine?

Just look at the guidance Buystocks and then do the math...with kind regards CW

Which Solar Stocks Will Continue To Shine?

Dear Jack,

Exactly what you said is correct while listening to the TSL conference call this afternoon...the first thing that stuck out was that 4 million dollar charge they took....really made the earnings look "disappointing" while they were really not disappointing at all....Another point that you did not mention and I would like to add is Trina's position in Italy...They positioned themselves excellent in order to take advantage of that emerging solar market...IMO it will be the next Spain....and currently Trina holds a market share of 25% in that market and if you looked at where their products go in the near future they will even expand that markertshare...

Also you did not really get into reduction of unit costs which look quiet promising...with poly costs dropping at least 12-15% in the next year(more realistic is 20%...TSL is conservative in the estimate which surely is not a bad thing) and also non poly costs reduction from $1.17 to 1.05 by the end of the year...So I think their is actually a possibility of a margin expansion....rather than a margin squeeze which other companies possible face with reductions in feed-in tariffs in ESP and GER...All in all the numbers were quiet good and as you said it is so cheap...and after a couple people do their math and raise guidance the stock will go up....I added to my position as well today and will continue doing so in small steps since they are, as you also said, so volatile but i do not expect a big pullback....

also i know it is kind of outta the way....but it looks like the ECB is quiet serious about raising those interest rates(The German Central bank is putting quiet a lot of pressure on them) and if it does not happen this month it will happen next month...putting further pressure on the dollar and this will obviously raise commodity prices...I doubt that is smart for Europe but that was not the point I was trying to make:)...Kind regards from Germany CW

Closing LDK Solar, Keeping Trina

@Trade Mark..nobody is expecting a blow out quarter by STP....they announced, or rather it is known they have limited supplies this quarter...so they had two options and will see in the quarterly report which one they chose...either pay spot silicon prices(which will kill the margin)....or sacrifice growth...so I dont think many are expecting that blow out quarter and i think that is already priced into the share for the most part...I think they will report in-line maybe a little above due to exchange rates...but surely not expecting more this Q. With Kind regards

Long TSL, STP, ABX

PS@ezetrader....I am pretty sure when Goldman got as many shares as they want, that hold rating could possibly turn into a buy rating:)