canb888's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/82925/comments http://seekingalpha.com/article/132937-is-china-the-next-great-bubble?source=feed#comment-477871 477871 Sun, 26 Apr 2009 12:00:17 -0400 http://seekingalpha.com/article/128381-confusion-with-china-s-solar-subsidy?source=feed#comment-444375 444375 1. Eric quoted someone saying:"the 20 RMB/watt subsidy program is specifically for BIPV installations ...". The official policy says: "Priority will be given to building-integrated PV applications", nowhere can I find "specifically for BIPV...". "Priority" became "specifically" to suit the author's opinion. "Specifically" is close to "only" that he used in my earlier comment. Eric already has his conclusion before looking at the documents/facts.

2. Eric quoted again someone saying: "the program is focused on off-grid installations"
while the Official Policy says: "Priority will be given to grid-connected building PV applications"

If Eric used the same logic as in the BIPV I pointed out earlier, he should be saying "only" support grid-connected.. applications". Instead he is quoting exactly the opposite.

How more biased can someone be?]]> Sun, 29 Mar 2009 16:07:16 -0400 1. Eric quoted someone saying:"the 20 RMB/watt subsidy program is specifically for BIPV installations ...". The official policy says: "Priority will be given to building-integrated PV applications", nowhere can I find "specifically for BIPV...". "Priority" became "specifically" to suit the author's opinion. "Specifically" is close to "only" that he used in my earlier comment. Eric already has his conclusion before looking at the documents/facts.

2. Eric quoted again someone saying: "the program is focused on off-grid installations"
while the Official Policy says: "Priority will be given to grid-connected building PV applications"

If Eric used the same logic as in the BIPV I pointed out earlier, he should be saying "only" support grid-connected.. applications". Instead he is quoting exactly the opposite.

How more biased can someone be?]]> http://seekingalpha.com/article/128381-confusion-with-china-s-solar-subsidy?source=feed#comment-444361 444361 Ministry of Finance said: "Priority will be given to building-integrated PV applications"
This writer selectively quoted someone who said:
"the program only covered what are known as “building integrated photovoltaic panels,” or BIPVs". Note the huge difference in the words "Priority" vs. "Only".

Question: Who do we trust, the Chinese Ministry of Finance who set the policy or someone who does not read Chinese and change the spirit of the new "interim measure" on solar incentives in China? Need I say more? Solars are moving up in a big way, don't fight the trend.]]> Sun, 29 Mar 2009 15:50:21 -0400 Ministry of Finance said: "Priority will be given to building-integrated PV applications"
This writer selectively quoted someone who said:
"the program only covered what are known as “building integrated photovoltaic panels,” or BIPVs". Note the huge difference in the words "Priority" vs. "Only".

Question: Who do we trust, the Chinese Ministry of Finance who set the policy or someone who does not read Chinese and change the spirit of the new "interim measure" on solar incentives in China? Need I say more? Solars are moving up in a big way, don't fight the trend.]]> http://seekingalpha.com/article/119619-how-the-world-almost-came-to-an-end-on-september-18-2008?source=feed#comment-389331 389331 Sun, 15 Feb 2009 12:03:34 -0500 http://seekingalpha.com/article/102102-has-nortel-become-a-takeover-target?source=feed#comment-356141 356141 Wed, 14 Jan 2009 21:59:09 -0500 http://seekingalpha.com/article/113443-ldk-solar-lowers-sales-outlook-delays-factory-plan?source=feed#comment-356133 356133

On Jan 12 06:50 PM Ucilia Wang wrote:

> I have no position on LDK, canb888.]]> Wed, 14 Jan 2009 21:39:00 -0500

On Jan 12 06:50 PM Ucilia Wang wrote:

> I have no position on LDK, canb888.]]> http://seekingalpha.com/article/114197-chinese-government-offers-incentive-for-solar-mergers?source=feed#comment-352423 352423 Sun, 11 Jan 2009 12:12:13 -0500 http://seekingalpha.com/article/113443-ldk-solar-lowers-sales-outlook-delays-factory-plan?source=feed#comment-350170 350170 Thu, 08 Jan 2009 17:22:24 -0500 http://seekingalpha.com/article/113633-salary-trends-in-china-present-new-business-opportunities?source=feed#comment-349621 349621
Average annual salary for a city means very little because they are pulled down by small private enterprises and some borderline companies who pay very low. Our average in Beijing for local staff is USD33k per person per year (including bonus) for an office staff of 35 of which our lowest paid receptionist costs about USD10k per year (including benefits and bonus). I know we are not the highest paying foreign company here. The city average is almost irrelevant for foreign companies, only good as an indicator. ]]> Thu, 08 Jan 2009 10:26:27 -0500
Average annual salary for a city means very little because they are pulled down by small private enterprises and some borderline companies who pay very low. Our average in Beijing for local staff is USD33k per person per year (including bonus) for an office staff of 35 of which our lowest paid receptionist costs about USD10k per year (including benefits and bonus). I know we are not the highest paying foreign company here. The city average is almost irrelevant for foreign companies, only good as an indicator. ]]> http://seekingalpha.com/article/113443-ldk-solar-lowers-sales-outlook-delays-factory-plan?source=feed#comment-349549 349549 Thu, 08 Jan 2009 09:45:47 -0500 http://seekingalpha.com/article/113443-ldk-solar-lowers-sales-outlook-delays-factory-plan?source=feed#comment-349537 349537 seekingalpha.com/artic...]]> Thu, 08 Jan 2009 09:39:30 -0500 seekingalpha.com/artic...]]> http://seekingalpha.com/article/113789-ldk-solar-when-bad-news-is-good?source=feed#comment-349512 349512 Thu, 08 Jan 2009 09:21:22 -0500 http://seekingalpha.com/article/113443-ldk-solar-lowers-sales-outlook-delays-factory-plan?source=feed#comment-347601 347601 Tue, 06 Jan 2009 13:13:47 -0500 http://seekingalpha.com/article/113443-ldk-solar-lowers-sales-outlook-delays-factory-plan?source=feed#comment-347511 347511 Tue, 06 Jan 2009 11:58:18 -0500 http://seekingalpha.com/article/113443-ldk-solar-lowers-sales-outlook-delays-factory-plan?source=feed#comment-347341 347341 ]]> Tue, 06 Jan 2009 09:52:42 -0500 ]]> http://seekingalpha.com/article/105118-china-solar-companies-slowing-production?source=feed#comment-321452 321452 biz.yahoo.com/prnews/0...

Here is what CBS MarketWatch say: LONDON (MarketWatch) -- Yingli Green Energy (YGE:yingli green energy hldg co adr
News, chart, profile, more
Last: 3.86-0.02-0.52%

4:02pm 12/04/2008

YGE 3.86, -0.02, -0.5%) said it reiterating its 2009 outlook, saying it was responding to erroneous news articles saying that photovoltaic module shipments would reach 400 megawatts next year. Yingli Green Energy is estimating between 550 and 600 megawatts of PV module shipments. That's subject to a planned ramp-up during the third quarter. Gross margins will be at least 24%.
Looks like you were one of those spreading the "erroneous news articles saying that photovoltaic module shipments would reach 400 megawatts next year." What else can one expect from Barron's?]]> Fri, 05 Dec 2008 07:34:14 -0500 biz.yahoo.com/prnews/0...

Here is what CBS MarketWatch say: LONDON (MarketWatch) -- Yingli Green Energy (YGE:yingli green energy hldg co adr
News, chart, profile, more
Last: 3.86-0.02-0.52%

4:02pm 12/04/2008

YGE 3.86, -0.02, -0.5%) said it reiterating its 2009 outlook, saying it was responding to erroneous news articles saying that photovoltaic module shipments would reach 400 megawatts next year. Yingli Green Energy is estimating between 550 and 600 megawatts of PV module shipments. That's subject to a planned ramp-up during the third quarter. Gross margins will be at least 24%.
Looks like you were one of those spreading the "erroneous news articles saying that photovoltaic module shipments would reach 400 megawatts next year." What else can one expect from Barron's?]]> http://seekingalpha.com/article/108244-rally-etfs-best-sector-bounces-off-the-november-bottom?source=feed#comment-316858 316858 Fri, 28 Nov 2008 14:44:31 -0500 http://seekingalpha.com/article/108244-rally-etfs-best-sector-bounces-off-the-november-bottom?source=feed#comment-316857 316857 Fri, 28 Nov 2008 14:43:37 -0500 http://seekingalpha.com/article/108356-expect-continued-drops-in-solar?source=feed#comment-316746 316746 Fri, 28 Nov 2008 11:38:15 -0500 http://seekingalpha.com/article/108281-nortel-is-a-billion-dollar-company?source=feed#comment-316262 316262 Thu, 27 Nov 2008 11:42:43 -0500 http://seekingalpha.com/article/107541-citigroup-bailout-stand-up-and-cheer-or-cower-in-fear?source=feed#comment-313539 313539 Mon, 24 Nov 2008 09:29:26 -0500 http://seekingalpha.com/article/107488-can-the-solar-pv-sector-survive-without-the-consumer?source=feed#comment-313505 313505 Mon, 24 Nov 2008 09:01:25 -0500 http://seekingalpha.com/article/106509-four-chinese-solar-stocks-under-threat-from-pollution?source=feed#comment-308615 308615 Tue, 18 Nov 2008 04:45:03 -0500 http://seekingalpha.com/article/105754-china-gets-it-right-but-hurts-america?source=feed#comment-305808 305808 "BEIJING, Nov. 14 (UPI) -- China's 4-trillion yuan, or $586 billion, economic stimulus plan is to be partly funded by a 1 trillion yuan treasury bond issue, officials said...."
Link: www.upi.com/Business_N.../

On Nov 13 04:32 AM canb888 wrote:

> JIMHO, China
> will use cash surplus and issue local currency debt if needed to
> fund the stimulus and continue to hold huge amount of US Treasury
> papers.]]> Fri, 14 Nov 2008 05:41:02 -0500 "BEIJING, Nov. 14 (UPI) -- China's 4-trillion yuan, or $586 billion, economic stimulus plan is to be partly funded by a 1 trillion yuan treasury bond issue, officials said...."
Link: www.upi.com/Business_N.../

On Nov 13 04:32 AM canb888 wrote:

> JIMHO, China
> will use cash surplus and issue local currency debt if needed to
> fund the stimulus and continue to hold huge amount of US Treasury
> papers.]]> http://seekingalpha.com/article/105754-china-gets-it-right-but-hurts-america?source=feed#comment-304822 304822 Thu, 13 Nov 2008 04:32:57 -0500 http://seekingalpha.com/article/105118-china-solar-companies-slowing-production?source=feed#comment-302995 302995 YGE): Postponed or canceled planned expansion from 400 MW to 600 MW. "

YGE said about one month ago:
— Company Confirms Cash Flow Sufficient for Current Capacity Expansion Plans and Working Capital
— Company Confirms No Further Capacity Expansion Plan beyond Its Current Capacity Expansion Plans

BAODING, China, October 8, 2008 - Yingli Green Energy Holding Company Limited (NYSE: YGE) ("Yingli Green Energy" or "the Company"), one of the world's leading vertically integrated photovoltaic ("PV") product manufacturers, today confirmed that it believes its current cash and expected cash flow from operations and committed available lines of credit will be sufficient to meet its currently anticipated cash needs for the remainder of 2008 and for fiscal year 2009, including cash needs for working capital and capital expenditures for the remaining phases of its current capacity expansion plans.

The Company confirms that at September 30, 2008, the Company's cash and cash equivalent totaled approximately RMB 883 million (US$130 million) and that the Company also had approximately RMB 3,723 million (US$548 million) in authorized lines of credit, of which RMB 2,614 million (US$385 million) were drawn down to date. The remaining RMB 1,109 million (US$163 million) in available lines of credit can be used if and when needed. In addition, the Company has also received a letter of intent from a PRC domestic bank relating to a potential line of credit of RMB 500 million (US$74 million).

As previously announced, the Company recently completed installation of an additional 200 MW of annual manufacturing capacity in each of PV polysilicon ingots and wafers, PV cells and PV modules bringing the Company's total annual manufacturing capacity to 400 MW for each stage of the PV value chain. As part of the current capacity expansion plans, the Company also plans to install an additional 200 MW of manufacturing capacity in each of PV polysilicon ingots and wafers, PV cells and PV modules, which is expected to be completed in the third quarter 2009. The Company confirms that it believes its current cash and expected cash flow from operations and committed available lines of credit will be sufficient to cover its capital expenditures to reach its anticipated total manufacturing capacity of 600 MW in 2009 while maintaining adequate working capital to support its operations. In this regard, the Company confirms it has no plans to conduct fund-raising from the capital markets to support this expansion and currently has no plans for further manufacturing capacity expansion beyond 600 MW while it focuses on maximizing utilization of existing capacity and further improving the cost structure of its production. "

They clearly said they are expanding to 600MW and have currently no plan to go beyong 600MW. Why should we believe you more than the company's statement just one month ago.

Eric, did you talk to YGE????? I guess you did not!!!!!! Pls respond and prove me wrong.

]]> Tue, 11 Nov 2008 11:07:08 -0500 YGE): Postponed or canceled planned expansion from 400 MW to 600 MW. "

YGE said about one month ago:
— Company Confirms Cash Flow Sufficient for Current Capacity Expansion Plans and Working Capital
— Company Confirms No Further Capacity Expansion Plan beyond Its Current Capacity Expansion Plans

BAODING, China, October 8, 2008 - Yingli Green Energy Holding Company Limited (NYSE: YGE) ("Yingli Green Energy" or "the Company"), one of the world's leading vertically integrated photovoltaic ("PV") product manufacturers, today confirmed that it believes its current cash and expected cash flow from operations and committed available lines of credit will be sufficient to meet its currently anticipated cash needs for the remainder of 2008 and for fiscal year 2009, including cash needs for working capital and capital expenditures for the remaining phases of its current capacity expansion plans.

The Company confirms that at September 30, 2008, the Company's cash and cash equivalent totaled approximately RMB 883 million (US$130 million) and that the Company also had approximately RMB 3,723 million (US$548 million) in authorized lines of credit, of which RMB 2,614 million (US$385 million) were drawn down to date. The remaining RMB 1,109 million (US$163 million) in available lines of credit can be used if and when needed. In addition, the Company has also received a letter of intent from a PRC domestic bank relating to a potential line of credit of RMB 500 million (US$74 million).

As previously announced, the Company recently completed installation of an additional 200 MW of annual manufacturing capacity in each of PV polysilicon ingots and wafers, PV cells and PV modules bringing the Company's total annual manufacturing capacity to 400 MW for each stage of the PV value chain. As part of the current capacity expansion plans, the Company also plans to install an additional 200 MW of manufacturing capacity in each of PV polysilicon ingots and wafers, PV cells and PV modules, which is expected to be completed in the third quarter 2009. The Company confirms that it believes its current cash and expected cash flow from operations and committed available lines of credit will be sufficient to cover its capital expenditures to reach its anticipated total manufacturing capacity of 600 MW in 2009 while maintaining adequate working capital to support its operations. In this regard, the Company confirms it has no plans to conduct fund-raising from the capital markets to support this expansion and currently has no plans for further manufacturing capacity expansion beyond 600 MW while it focuses on maximizing utilization of existing capacity and further improving the cost structure of its production. "

They clearly said they are expanding to 600MW and have currently no plan to go beyong 600MW. Why should we believe you more than the company's statement just one month ago.

Eric, did you talk to YGE????? I guess you did not!!!!!! Pls respond and prove me wrong.

]]> http://seekingalpha.com/article/105118-china-solar-companies-slowing-production?source=feed#comment-302702 302702 Tue, 11 Nov 2008 02:33:32 -0500 http://seekingalpha.com/article/105016-first-solar-and-solarfun-may-defy-short-term-weakness-in-solar-sector?source=feed#comment-301635 301635
About the stimulus package, it is new investment that will have a huge multiplier effect on the economy. This is in contrast to the US bailout - which does not add too much new investment but use billions to correct past errors. Bailout barely create any growth if at all. New investment does. Thats' a world of difference when looking at the multi-billion dollar US bailout vs China's $580B stimulus plan. Final note: one dollar buys much more in China than in the US, not only when it comes to labor hours but also on other productive factors. Therefore, the $580B in China will definitely have a much larger impact than the same dollars in the US. You can't always measure things in terms of what it means in the USA. Think international.]]> Mon, 10 Nov 2008 05:44:31 -0500
About the stimulus package, it is new investment that will have a huge multiplier effect on the economy. This is in contrast to the US bailout - which does not add too much new investment but use billions to correct past errors. Bailout barely create any growth if at all. New investment does. Thats' a world of difference when looking at the multi-billion dollar US bailout vs China's $580B stimulus plan. Final note: one dollar buys much more in China than in the US, not only when it comes to labor hours but also on other productive factors. Therefore, the $580B in China will definitely have a much larger impact than the same dollars in the US. You can't always measure things in terms of what it means in the USA. Think international.]]> http://seekingalpha.com/article/102102-has-nortel-become-a-takeover-target?source=feed#comment-292135 292135 Mon, 27 Oct 2008 23:58:49 -0400 http://seekingalpha.com/article/96616-ldk-wants-200m-more-for-manufacturing?source=feed#comment-261320 261320 LDK Solar pulls off $200 million follow-on
By Anette Jönsson | 22 September 2008

The deal is launched before the opening of US trading on Friday and prices at a 4.55% discount to the previous day's close.

In a surprising move, coming right at the end of one of the most volatile and hectic weeks in recent Wall Street history, LDK Solar succeeded in raising $200.4 million through a follow-on offering. The Chinese solar wafer manufacturer grabbed a window that opened up after its share price rebounded 16% from Monday’s low amid a recovery in the broader market sentiment and the gamble paid off. Demand was even strong enough to allow the deal to be upsized by 26%.

The company initially offered 3.8 million American depositary shares at a 2% to 7% discount to Thursday’s close of $43.74. It ended up selling 4.8 million ADS – all backed by primary common shares – at a price of $41.75, or a 4.55% discount. At the final size, the offering accounted for about 4.5% of the existing share capital.

The deal was launched an hour before the US market opened on Friday and was covered in 20 minutes. However, the lead managers weren’t able to close the books until about 30 minutes into the trading session as they had to wait for the necessary regulatory approvals to come through, which meant the price had to be fixed while the stock was moving. But investors stuck with the deal and surprisingly didn’t show much price sensitivity. A source said the price could have been fixed at the top, although that might have been a bit too provocative in light of the panic sell-off in US markets earlier in the week.

The order book was said to have included about 40 accounts and comprised existing investors as well as solar power specialists and those who were chasing liquidity. Given the timing of the deal (kick-off was at 8.30pm Hong Kong time), the buyers were predominantly US-based, but with some interest from Europe and Asia.

LDK’s share price fell 5.3% to $41.44 in Friday’s trading and while this meant it closed below the placement price, the share price did recover from an intraday low of $39.15, suggesting that investors were still prepared to support the stock. The fact that the company was raising money primarily to fund capacity expansion likely worked in its favour here. LDK did underperform the market though, with most other solar power plays gaining ground and the Dow Jones index rallying 3.4%, following a 3.9% gain on Thursday.

The initial fall in the company’s share price may have been a reaction to the unusual way in which the shares were sold. US follow-ons are typically marketed during at least one, and often several, trading sessions against a moving share price. Investors may also have been surprised by the fact that the deal was launched on a Friday. According to the source, this is the first SEC-registered block trade to be done on a Friday morning ever.

This unusual approach brings further evidence that a bit of innovation, and indeed a lot of flexibility, may be needed to get deals out the door in the current environment which continues to be marked by violent day-to-day swings in global stock markets. The acute confidence crisis that had plagued the market for about a week-and-a-half and ultimately forced Lehman Brothers to file for bankruptcy protection, Merrill Lynch to agree to sell itself to Bank of America and insurer AIG to accept a costly government loan facility, appeared to have eased off on Thursday and Friday in response to the US government’s proposed $700 billion rescue package, but there is still no telling how long the current rebound will last. Recently no rally has lasted more than a couple of days, adding to the urgency to grab the window when it appears.

LDK mandated Goldman Sachs, J.P.Morgan and UBS for a capital raising exercise some time ago, and the first few filings on Friday morning suggested that the three banks would all be involved in the deal. However, when it was launched, J.P.Morgan was no longer on the ticket. No explanation was given, but it is possible that the bank didn’t feel comfortable to support a deal at such short notice. Goldman and UBS acted as joint bookrunners.

LDK said it would use 60% of the proceeds towards the ongoing construction of a polysilicon manufacturing plant, which was begun in August 2007 and marks its first move upstream in the value chain. Polysilicon, which is used as a raw material in solar wafers, has been in short supply for the past couple of years and by starting to produce its own, LDK will go some way towards securing its future needs. It expects to have an aggregate installed annual production capacity of approximately 7,000 tonnes of polysilicon by the end of 2008 – allowing it to produce 100 to 350 tonnes of polysilicon this year, and 16,000 tonnes by the end of 2009. Aside from these efforts to produce its own raw material, LDK believes it has enough inventory and commitments from suppliers to satisfy substantially all of its estimated requirements through 2008.

Another 30% of the proceeds will go towards the expansion of its production capacity of multicrystalline wafers from 880MW as of June 30 to 1,100MW by the end of this year and approximately 2,000MW by the end of 2009. It will also begin commercial production of monocrystalline wafers in the fourth quarter this year and expect to reach an annual capacity of 200MW by the end of 2009. Monocrystalline wafers have a higher efficiency than their multicrystalline equivalents, but cost more to produce.

LDK has experienced strong earnings growth since it made its first commercial wafer sale in April 2006 and in the six months to June, its bottom line improved by 274% year-on-year to $199.4 million. The share price remains volatile though and, while it has recovered from a 2008 low just below $20 in March, it is still down 40% from a year ago. The 16% bounce on Tuesday through Thursday last week came on the back of a 7.5% drop on Monday.

The successful outcome of this deal may improve the chances for solar cell manufacturer Gintech Energy Corp to complete its planned sale of about $150 million worth of global depositary receipts. The Taiwan-listed company set off on a nine-day roadshow on Wednesday last week and if the response is positive, it will conduct a one-day bookbuilding at the end of it. ABN AMRO and UBS are the joint bookrunners.


Copyright FinanceAsia.com Ltd., a subsidiary of Haymarket Media Ltd

It's like night and day, completely different.]]> Mon, 22 Sep 2008 09:34:46 -0400 LDK Solar pulls off $200 million follow-on
By Anette Jönsson | 22 September 2008

The deal is launched before the opening of US trading on Friday and prices at a 4.55% discount to the previous day's close.

In a surprising move, coming right at the end of one of the most volatile and hectic weeks in recent Wall Street history, LDK Solar succeeded in raising $200.4 million through a follow-on offering. The Chinese solar wafer manufacturer grabbed a window that opened up after its share price rebounded 16% from Monday’s low amid a recovery in the broader market sentiment and the gamble paid off. Demand was even strong enough to allow the deal to be upsized by 26%.

The company initially offered 3.8 million American depositary shares at a 2% to 7% discount to Thursday’s close of $43.74. It ended up selling 4.8 million ADS – all backed by primary common shares – at a price of $41.75, or a 4.55% discount. At the final size, the offering accounted for about 4.5% of the existing share capital.

The deal was launched an hour before the US market opened on Friday and was covered in 20 minutes. However, the lead managers weren’t able to close the books until about 30 minutes into the trading session as they had to wait for the necessary regulatory approvals to come through, which meant the price had to be fixed while the stock was moving. But investors stuck with the deal and surprisingly didn’t show much price sensitivity. A source said the price could have been fixed at the top, although that might have been a bit too provocative in light of the panic sell-off in US markets earlier in the week.

The order book was said to have included about 40 accounts and comprised existing investors as well as solar power specialists and those who were chasing liquidity. Given the timing of the deal (kick-off was at 8.30pm Hong Kong time), the buyers were predominantly US-based, but with some interest from Europe and Asia.

LDK’s share price fell 5.3% to $41.44 in Friday’s trading and while this meant it closed below the placement price, the share price did recover from an intraday low of $39.15, suggesting that investors were still prepared to support the stock. The fact that the company was raising money primarily to fund capacity expansion likely worked in its favour here. LDK did underperform the market though, with most other solar power plays gaining ground and the Dow Jones index rallying 3.4%, following a 3.9% gain on Thursday.

The initial fall in the company’s share price may have been a reaction to the unusual way in which the shares were sold. US follow-ons are typically marketed during at least one, and often several, trading sessions against a moving share price. Investors may also have been surprised by the fact that the deal was launched on a Friday. According to the source, this is the first SEC-registered block trade to be done on a Friday morning ever.

This unusual approach brings further evidence that a bit of innovation, and indeed a lot of flexibility, may be needed to get deals out the door in the current environment which continues to be marked by violent day-to-day swings in global stock markets. The acute confidence crisis that had plagued the market for about a week-and-a-half and ultimately forced Lehman Brothers to file for bankruptcy protection, Merrill Lynch to agree to sell itself to Bank of America and insurer AIG to accept a costly government loan facility, appeared to have eased off on Thursday and Friday in response to the US government’s proposed $700 billion rescue package, but there is still no telling how long the current rebound will last. Recently no rally has lasted more than a couple of days, adding to the urgency to grab the window when it appears.

LDK mandated Goldman Sachs, J.P.Morgan and UBS for a capital raising exercise some time ago, and the first few filings on Friday morning suggested that the three banks would all be involved in the deal. However, when it was launched, J.P.Morgan was no longer on the ticket. No explanation was given, but it is possible that the bank didn’t feel comfortable to support a deal at such short notice. Goldman and UBS acted as joint bookrunners.

LDK said it would use 60% of the proceeds towards the ongoing construction of a polysilicon manufacturing plant, which was begun in August 2007 and marks its first move upstream in the value chain. Polysilicon, which is used as a raw material in solar wafers, has been in short supply for the past couple of years and by starting to produce its own, LDK will go some way towards securing its future needs. It expects to have an aggregate installed annual production capacity of approximately 7,000 tonnes of polysilicon by the end of 2008 – allowing it to produce 100 to 350 tonnes of polysilicon this year, and 16,000 tonnes by the end of 2009. Aside from these efforts to produce its own raw material, LDK believes it has enough inventory and commitments from suppliers to satisfy substantially all of its estimated requirements through 2008.

Another 30% of the proceeds will go towards the expansion of its production capacity of multicrystalline wafers from 880MW as of June 30 to 1,100MW by the end of this year and approximately 2,000MW by the end of 2009. It will also begin commercial production of monocrystalline wafers in the fourth quarter this year and expect to reach an annual capacity of 200MW by the end of 2009. Monocrystalline wafers have a higher efficiency than their multicrystalline equivalents, but cost more to produce.

LDK has experienced strong earnings growth since it made its first commercial wafer sale in April 2006 and in the six months to June, its bottom line improved by 274% year-on-year to $199.4 million. The share price remains volatile though and, while it has recovered from a 2008 low just below $20 in March, it is still down 40% from a year ago. The 16% bounce on Tuesday through Thursday last week came on the back of a 7.5% drop on Monday.

The successful outcome of this deal may improve the chances for solar cell manufacturer Gintech Energy Corp to complete its planned sale of about $150 million worth of global depositary receipts. The Taiwan-listed company set off on a nine-day roadshow on Wednesday last week and if the response is positive, it will conduct a one-day bookbuilding at the end of it. ABN AMRO and UBS are the joint bookrunners.


Copyright FinanceAsia.com Ltd., a subsidiary of Haymarket Media Ltd

It's like night and day, completely different.]]>