ac_48's Comments

Polysilicon-Based PV Manufacturers: Clarifying the Financial Issues

Tue, 08 Jul 2008 15:24:51 -0400

Envoy,

Regarding risk factors listed in their 20-F form, these companies are obligated by law to list anything that potentially is a risk, even with 1% of probability it would occur. It is the investors job to assess what is the probable possibility it will occur. It appears that you take it as a risk that likely will occur. You need to back up your speculation with numbers and analysis, not just because it is in 20-F form.

A Look at Four Polysilicon-Based PV Manufacturers' Funding

Tue, 08 Jul 2008 13:18:49 -0400

Envoy global,

One thing you seem to miss is the "scale". A good example will be Dell Computer, it has no proprietary technology, low threshold to entry, but it has the scale to become a $45B business today. That is exactly the 4 companies you mentioned are trying to achieve- scale. They could over extend themselves financially, if the demand does not keep up with the supply. But they bet on it with their money. All the major players are doing the same thing, including Q-cells and First Solar- your favorate solar company. Their huge investment in CAP-Ex may turn out to be a bad investment... we will see.

A Look at Four Polysilicon-Based PV Manufacturers' Funding

Tue, 08 Jul 2008 12:40:13 -0400

Envoy global,

You said < In fact I am very bullish on solar and I 100% agree that the solar industry presents some great investment opportunities, but I don't think the companies mentioned here are one of those opportunities. >

Name a few companies you think will do well, and explain why they are better than the 4 companies you are so bearish about.

Polysilicon-Based PV Manufacturers: Clarifying the Financial Issues

Mon, 07 Jul 2008 19:22:22 -0400

About Jesse Pichel's view:

he has price target on LDK at $28/share after LDK's first Q CC. LDK went up to $47/share 2 weeks ago before the market sell off. He has $60/share on YGE, now YGE is trading at $14 plus a change. It show the vote of no confidence in him by the investors.

Polysilicon-Based PV Manufacturers: Clarifying the Financial Issues

Mon, 07 Jul 2008 18:48:08 -0400

Alpha,

the article you cited was dated 2/19/08. With the dynamics of the market it might not be relevant anymore. Furhter, Jesse Prichel was siiting in the panel, and I suppose he was negative about the solar market as well. However, after the German subsides policy was finalized a few weeks ago, he encouraged his clients to buy solar stocks. Isn't that ironic?

The link I provide here, shows Q-Cells is bullish on the market demand. Are they wrong? or the so called " analysts and investment bankers" are wrong?

www.sustainablebusines...

Polysilicon-Based PV Manufacturers: Clarifying the Financial Issues

Mon, 07 Jul 2008 16:57:14 -0400

Jack,

Can you comment on today's article from Envoy Global:

seekingalpha.com/artic...

Polysilicon-Based PV Manufacturers: Clarifying the Financial Issues

Sun, 06 Jul 2008 13:22:14 -0400

Rana,

I suppose you have a point there regarding the poly supply. However, I think what aqua said was silane is the feedstock for amorphous silicon thin film application, and for use of FBR technology. It is not used for Siemens traditional process which is the technology used by Chinese poly producers. REC's Moses lake plant will produce 9,000 MT of silane gas in q2 of 2009 according to the article, so the shortage may just go away by then. You are right about silane gas being short supply is affecting the poly output from a global poly supply perspective.

Polysilicon-Based PV Manufacturers: Clarifying the Financial Issues

Sat, 05 Jul 2008 22:10:41 -0400

www.sustainablebusines...

2 messages from this article are relavent to note here:

1. Q-Cells is bullish on future solar power demand, otherewise it would not have planned EverQ IPO.
2. REC will supply poly to EverQ, that means the production problem it had in 2008 has been mitigated and back on track to produce poly, thereby supply crunch will be eased.

Polysilicon-Based PV Manufacturers: Clarifying the Financial Issues

Sat, 05 Jul 2008 21:35:49 -0400

Thanks aqua. your article surely restores my confidence in poly-based solar companies in general as silane gas is not the feedstock for poly production. If REC's failure in its pilot plant is the cause for the rise of poly price in 2008, then it is logical to assume that poly price will come down in 2009, because REC will go back to traditional Siemens process.

Polysilicon-Based PV Manufacturers: Clarifying the Financial Issues

Sat, 05 Jul 2008 15:52:06 -0400

Alpha,

Things are happening in all directions and in all dimensions. Please see the link below, to show how Germany and other EU countires stepping up to the plate to promote renewable energy.

www.iht.com/articles/2...

Polysilicon-Based PV Manufacturers: Clarifying the Financial Issues

Fri, 04 Jul 2008 13:07:29 -0400

Envoy,

You stated "fail to distinguish between cash outflows due to capital expenditure requirements and cash-outflows due to working capital management. However, these are two entirely different issues."

From an investment point of view, both are the same issue. Cash on CAP-EX is to spend cash on something that will generate revenue later, such as purchase of equipment; cash spent on advance payment to secure longterm cheaper supply is to lower cost for future higher revenue. Therefore both are investment decisions. The question really is whether the supplier you pay advance payment to and the customers you receive revenue from have good standing financially. Plus whether the future market demand warrents the investment. It has some risk in this decision making for sure, but it is not unique to solar industry. You mentioned merger and consolidation will improve this risk, that is true, but that is an entirely different subject, don't confuse readers.

Will Some Solar Companies Face a Cash Crunch?

Wed, 02 Jul 2008 13:44:17 -0400

These companies you mentioned could just hold back their capacity expansion, and just sell what they can produce to keep the product price steady, or even to go up if demand increases. Then all the potential cash flow problem as you mentioned will go away. Instead, they are doing the opposite, because they believe by increaing the output, the price will go down towards grid parity, which will in turn drive the demand up tremendously. I think they are doing the smart thing, do you think so?

Will Some Solar Companies Face a Cash Crunch?

Wed, 02 Jul 2008 13:22:23 -0400

To Envoy Global,

As you said " Are the companies just shipping tons of product without actually receiving the cash? When are they getting paid? How will they continue to finance the cash drain that occurs because of prepayment to suppliers and longer credit cycles to customers?"

Do you have any evidence that they are not getting paid from their sales? They would go under if the market demand starts to shrink and overspply occurs. But I don't see that is happening yet. You said the market is oversupplied right now, how is that so?