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    • LDK Solar: A Spark of Light [view article]
      You forgot to mention that net margins were 22.7% up from the last quarter of 22.5%, a result of management producing higher efficiencies and cost savings. It appears that LDK has a complex formula that increases their ASP when the cost of the polysilicon increases. On top of that, management was smart enough to sign long term contracts and keep an inventory of $656 million, mostly for polysilicon feedstock. As their in house poly production comes on line, they will reduce inventory to free up cash to finance more expansion.

      They have backorders for over 12GW of wafers which is about $20 to $30 BILLION in revenue depending on ASP (currently at about $2.40/watt). Today they added another 300MW deal that included a cash downpayment.

      From their conference call, I am guessing they will have 2008 EPS of about $3.50 which is about double what the analysts expect. This revenue is from wafer sales alone. They plan to increase wafer capacity from 1.2GW in 2008 to 2.2GW in 2009. Now consider that they expect gross margins to almost double when their in house poly in complete, you get forward EPS in the $10 to $15 range.

      * Lowest cost producer in the industry
      * Blow out earnings, 2 to 3 times estimates
      * 12GW in backorders
      * world's largest polysilicon plant on schedule
      * Forward PE in the low single digits
      * over 100% revenue growth per year
      * a renewable energy market that is expected to explode for the next 10 years.
      * A game plan that has customers financing expansion of their plants.
      * CEO Ziaofeng Peng, China's Entrepreneur of the Year
      * Short squeeze coming soon, short shares of more than 50% of available float

      In my opinion, a grossly undervalued stock with huge growth and huge earnings.


      Aug 13 06:10 AM
    • First Solar Up as Insider Selling Stops [view article]
      Insider selling tells the real story. So everyone should dump at least half your holdings in FSLR. There must be better places for their money or they would not have sold. Even Cramer, a diehard FSLR fan says sell. PE are too high and the competition from AMAT and silicon solar is heating up. Jun 11 05:28 PM
    • Closing LDK Solar, Keeping Trina [view article]
      You may be right about TSL as I also hold a long position. But I don't think it wise to abandon LDK until later. Goldman Sachs just increased their position in LDK by 179,970 shares bringing their total to 725,782 shares or about $26 million. I am sure your 150 shares are important to you but I would rather follow GS.

      It is also interesting that GS still has a HOLD rating on LDK even though they are buying up shares.       May 16 12:09 AM
    • Margin Concerns Make LDK Solar Vulnerable to Profit Taking [view article]
      Don't worry about the margins with LDK. They are still better than anyone else. The closest direct comparison will be Renesola (SOL)who are another Chinese wafer maker that just reported Q1 with $123M in revenue compared to LDK's $233M. SOL had gross margins of 22.1% and net margin of 14.4%. Compare this to LDK with gross margins of 27.7% and net of 21.3%. In first quarter 2008 Renesola earned $0.28 per ADS and is trading at $26 whereas LDK had earnings of $0.45 per ADS and is trading at $36.

      Now add the following to the equation:

      1) LDK's poly plants will start producing this year and will become the largest in the world when completed. The funding in in place for the poly plant whereas other solar companies can only dream of being in such a position. The plant is ON SCHEDULE.
      2) There are $billion in booked orders, estimated at about $20B from LDK's partners who are the largest solar panel makers in the world such as Q-Cell. Many of these partners have prepaid orders to help LDK complete their expansion plans. Once complete, the poly plant is expected to increase gross margins to as high as 50+%.
      3) LDK has just announced accelerated ramping of wafer capacity to 1.1GW capacity by the end of 2008 and 2.0GW by the end of 2009. The original plan was 800MW by the end of 2008.

      With the possible short squeeze position and the $200M stock buyback, I think LDK is one of the best investment opportunities out there.       May 15 04:58 PM
    • LDK Solar Earnings and the Dark Cloud of Polysilicon Shortages [view article]
      LDK is the only solar company that will have control of future costs. Their poly plant, which will be the largest in the world, is due to begin production this year. LDK is expecting margins of 42% to over 50% when their poly plant is running, with the lowest operating costs for poly production in the world. The current high poly pricing only makes LDK's poly plant investment even more valuable since other solar companies are much further behind.

      No matter what happens to the price of poly, LDK will be in the best position by having their own poly plant with low operating costs. They also have a huge investment in silicon inventory which will keep their costs stable for the next 2 quarters. Per the CC they have over 90% of their silicon needs on hand or under contract.       May 12 09:35 PM
    • Update on LDK Solar, Applied Materials Thin Film Deal [view article]
      Thank you Mr. Peng for avoiding the wrath of Wall Street that seems to punish companies like LDK that have bold plans. Look at what is happening with construction of the world's largest poly plant. LDK shares are being held down by questionable analysts that cast doubts about LDK's ability to execute, even though Peng has build a great company that is one of the world's top solar companies. The analyst like to upgrade other solar stocks such as TSL for cancelling expansion plans. WS hates risk, but I personally like to back smart people with a bold vision. Look at the LDK customer list and billions of long term contracts. They are all backing Peng and LDK with real dollars.

      Imagine what WS would be saying if LDK was taking on the thin film plant. The stock price would get killed in the short term. Thank you Mr Peng for keeping most of the risks away from LDK shareholders by keeping the new thin film plant a private company. If he had done that with the poly expansion LDK shares would be much much higher today.

      I am long LDK.       Apr 30 05:28 AM
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