West1

Three Reasons Solar Sell-off May Be in Early Innings

"I think the argument the author is laying out against solar is a fairly short-term one. He never claims solar won't be a great business down the road. But if oil continues to plummet, Solar's high valuations will not be sustainable.

Value is about what a business is trading for relative to what it's really worth - even the greatest business can be overpriced and the worst underpriced. And at current and future PEs, solar profits need to keep growing at an insanely fast rate to sustain current valuations."

I'm sure both you and the author are aware that the P/E ratios of FSLR and SPWR are the exception and not the rule when it comes to solars, and that in terms of P/E, other solars "stand out from the pack" even further than LDK.

Solar Breaks Oil Price Dependence

Can we please stop treating the two presidential candidates as if they are equally likely to be beneficial to renewable energy such as solar? They're obviously not. McCain is about nuclear, and just picked a VP who is all about drilling.

What's Up with the China Solar Stocks

For god's sake, it's one @$#%!^@ day. Now it's the 'fear' of German subsidies being cut in 2010. I'm surprised there isn't a mention of the future government of Mars possibly cutting solar subsidies in 3112.

Which Solar Stocks Will Continue To Shine?

in.reuters.com/article...

"The energy ministers agreed on the need for more large-scale carbon capture and storage (CCS) projects that bury emissions from power plants, a cornerstone of the International Energy Agency's call for a $45 trillion energy "revolution".

"The time for talking is over. We have to implement this," British Business Minister John Hutton told Reuters in an interview, referring to the IEA goals.

The IEA report released on Friday, commissioned by G8 leaders three years ago, said the world would need to effectively "decarbonise" the power sector by building dozens of billion-dollar CCS plants over the next 40 years, although world governments remain at odds over who should foot the bill."

Which Solar Stocks Will Continue To Shine?

TSL's switch to the $ as "functional currency" was effective Jan 1, 2008, per their Q1 earnings release, so I'm guessing that's why it didn't impact Q4 2007?

Perhaps Trina is being paid by a greater % of it's European customers in dollars than, for example, YGE and CSIQ. I notice that CSIQ cited the "strong Euro vs USD" as a significant factor in their blowout quarter, though they also said "the large foreign exchange gain is likely a one-time event". I don't see where they state how much this was, but their statment of operations shows an $8 million figure under "Others - Net" under other income that I'm guessing is it.

What's weird to me is how YGE and CSIQ expressed their currency gains as a simple function of currency movements, but Trina's statement makes it sounds as if the loss is accounting mumbo jumbo:

[The $4.0 million exchange loss was] "... primarily associated with Trina China's non-US-denominated obligations that are now required to be remeasured in the US dollar functional currency. Such remeasurements are and will continue to be, to the extent we continue to have such non-US denominated obligations, recorded as transaction gains or losses in the consolidated statement of operations".

If you don't get it, I sure as hell don't.

Which Solar Stocks Will Continue To Shine?

This article I think is probably very relevant and helpful in understanding the currency question:

www.nytimes.com/2008/0...

Which Solar Stocks Will Continue To Shine?

Re: currency

Did some further reading and found out about YGE's currency gain of 9.5 million in Q1 2008, and $4 million loss in Q4 2007.

biz.yahoo.com/bw/08051...

"Foreign currency exchange gain was RMB 66.3 million (US$9.5 million) in the first quarter of 2008, compared to a foreign currency exchange loss of RMB 29.2 million in the fourth quarter of 2007 and a foreign currency exchange loss of RMB 0.1 million in the first quarter of 2007. The foreign currency exchange gain in the first quarter of 2008 was primarily due to the appreciation of the Euro against the Renminbi coupled with an increase in Euro-denominated sales, which was partially offset by the depreciation of the U.S. dollar against the Renminbi."

So this seems to indicate that a depreciating dollar against the RMB is also a negative for YGE.

Which Solar Stocks Will Continue To Shine?

ysong,

Thanks for your insight.

Which Solar Stocks Will Continue To Shine?

VP,

Shouldn't the Yuan being pegged to the dollar be favorable? My thinking is that if sales are in Euros and costs in Yuan, then the weaker dollar would be good...but if so, why the $4 million loss?

Which Solar Stocks Will Continue To Shine?

Jack,

Any idea why the change in "functional currency" to the $, given that most of their business is in Europe? I was under the impression that other foreign solars had been coming out ahead with regards to foreign currency in Q1, so the $4 million loss is an unexpected contrast. Since it is a Chinese company, I did not think being long TSL was inconsistent with a bearish view of the dollar, but now I'm wondering if it is.