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EysteinH

EysteinH
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  • DAQO New Energy: A New Leader In The Polysilicon Industry [View article]
    55 gw at 5 grams / watt is 275 k MT. If we hit 200k MT of new capacity this should allow 15$/kg asp so I would not rule it out by far yet. (albeit not a likely scenario for 2015- perhaps 2016. It also depends on the research by UNSW on hydrogen passivation tecniques that could allow more use of umgs instead of regular poly.) And I wanted to point out that I see overcapacity and 18$/kg prices at that point at least. I want to make this clear to the reader so they are not thinking that 2015 will be under-supply if current expansions pan out. That is obvious if you look at announced expansions. So bottom line: I do not think 15$/kg is likely in end of 2015, but I do see 18$/kg as a likely scenario. And unlike you I clearly see oversupply at this point so this is why I am protesting against in your writings and if you do not see this then thats your fault for not meeting my arguments with factual arguments of yourself. I have shown you both sources and announcement for said capacity.

    And by the way I know exactly how long greenfield and brownfield expansion times are so please do not lecture me about this. There is a big room of inventory in simens reactors due to this market crashing and actors like gtat wants to sell even at discount (see recent 25k MT deal with Cosmos Chemicals Berhad or just read any of the trade magazines where you can see offers for equipment.) Simens expansions can be up and running in 6 months time optimal (as exemplified by plenty of such expansions done by tier 1 actors.) but a greenfield depending on where you set it up is between 1-2 years.

    Oh and we differ in the fact I see clearly that the tier 1 who have spent billions can capture market share now. There is currently a lot of equipment available cheaply that can be used to get high margins even in a 18$/kg scenario. If the tier 1 actors do not act on this opportunity someone else will. (as exemplified by the last malaysian gtat deal.) Another example is this 50k MT poly factory that was applied for allowing to be built:http://bit.ly/SNfveK (most likely this producer: http://bit.ly/SNfEip )

    Anyhow there are PLENTY of such projects out there that might or might not be realized (if i count all my rumored expansions we are far above 200k MT for 2015) so I would be careful to be 100% bombastic sure that we would not see 15$/kg by end of 2015. Myself I try to be objective and rationalize that most of these projects does not see the light of day. But even if a small portion do we might see price pressure on poly by that time.

    And again let me stress that I do not see overcapacity for 2014 so we might before this time see higher asp on poly. That does not in any way distract that by end of 2015 we will have an oversupply situation again.
    Jun 16, 2014. 08:04 AM | Likes Like |Link to Comment
  • DAQO New Energy: A New Leader In The Polysilicon Industry [View article]
    larryvand your quote shows exactly why I answered you back. You claim "there is absolutely NO oversupply in 2014 or 2015" And I showed exactly that this could be the case based on announced capacity expansions. Seems to me someone is hearing what HE wants to hear. Again there is coming between 100-200k MT of capacity online somewhere around 2015. We are talking of 20-40 GW module worth of polysilicon coming online in a span of 1,5 year. Even if this was not the case one would argue that when you can get simens reactors (plenty in inventory of these equipment as well so quick delivery times.) at a cash cost of 10 and probably around 14$/kg total cost then one sees that at asp of 20$/kg there will be incentives to buy and install this capacity. Someone is bound to buy this capacity at some point because it is highly profitable. I am not arguing this for 2014 as most of the announced capacity is not installed by then but I am arguing by around the end of 2015 we should see price drops unless demand peaks above 70 gw per year at this point. (Not likely in current scenario.)
    Jun 16, 2014. 06:48 AM | Likes Like |Link to Comment
  • Does It Make Sense To Breakup ReneSola? [View article]
    For once I agree with you. If we look at things objectivly Renesola was first to tie up contracts with jabil (Polan) etc and they will have gained an advantage of this first move. I personally think it will only last a few quarters, but that is my speculation. Facts is they have the contracts and they will benefit from the tariff quarrels.
    Jun 16, 2014. 05:54 AM | Likes Like |Link to Comment
  • Does It Make Sense To Breakup ReneSola? [View article]
    Fair comment. I would add personally I think renesola had first move in OEM and will do well with this now for the coming quarters. I am more worried about the other manufacturers simply moving its own internal capacity to other places. Recent examples are JASO and JKS moving some production capacity to South Africa (around 300 MW both.) And there are already rumors in the industry of some capacity getting up in Mexico. But anyhow this is of no consequences to Renesola in the upcoming quarters and they should do well based on having oem to serve markets better in the current tariff situation. I do not think Renesola would sell any of its productions capacities in the current scenario. And besides this would be pure speculation anyway.
    Jun 16, 2014. 05:44 AM | 1 Like Like |Link to Comment
  • DAQO New Energy: A New Leader In The Polysilicon Industry [View article]
    Biased view really? Only you seem hell bent on renesola. I told it can be a great comeback story, I have shared my positive view on JASO, I even mentioned the fact TSL is 1 cent behind JKS now in processing so JKS is not really far ahead in manufacturing cost of modules compared with all peers.

    Anyhow I have stated many times my factual reason for prefering JKS, they have projects with an extremly high IRR. Currently in Q1 they had a 52% net profit. The current mcap of JKS does not even defend the projects installed this year so I get the manufacturing capacity for free. This is the simple reason I own JKS.

    Regarding your poly discussion it seems to be you forgot what I mentioned in the renesola thread about new capacity coming online. There is well over 100K MT confirmed new capacity in 2015 Thats around 19 GW of more modules that can be produced if 100k.

    Here is some of the expansions (not all there are more):
    GCL 25k MT fbr
    OCI 10k MT
    REC JV 19 MT
    Sunedission/simens 10k MT
    Wacker tenesee 20k MT
    Daqo 19K MT
    Cosmos Chemicals Berhad 25k MT.

    Only these projects alone are 128k MT or 24 GW of new capacity assuming 5,3g/watt. And they are not the only capacity expansions or new capacity announced.

    Also your logic about using internal poly is flawed in that it does not show that for the market as a whole it matters. If Renesola does not need to buy any poly from outside that means there is less demand for the rest of the production capacity. (if renesola has 10k MT that is 2 GW of module demand that is not going to the 240-280k MT current supply of poly) So while they can net a higher margin if lower than current asp, it also means they are participating in having a capacity, meaning that if overcapacity we would see lower ASP's again by end of 2015.

    However I agree that opex should be included in any views on cost price for producers. And this is why I believe we will not see prices below 18$/kg by end of 2015 and not below this. For 2014 we will see increase if current scenario plays out as it is trending so far.

    Also finally you should welcome the fact that both renesola and others are able to reduce production cost on poly and that we will see lower poly costs in end of 2015. This will mean modules can become even more competitive and module manufacturers and poly manufacturers both can have good margins. I am happy for renesola that they are going to have some good quarters now and for a while it could be asp for poly trends up. But this does not mean my estimate for overcapacity has changed. I do not see this as a biased view as long as I keep to announced capacity expansion plans. (Granted they do seem to change all the time so that is why I say my current scenario - but logic has it that if you can buy cheap new simens reactors that gives you high margins at current prices, someone is going to do this.)
    Jun 16, 2014. 05:18 AM | Likes Like |Link to Comment
  • ReneSola: Do You Want To Buy This Lottery Ticket Ahead Of Earnings? [View article]
    Does not matter if they earn a higher income from feed in tariff and less currency hedging negative one off. Do you think Renesola will post 0.82$/share or better earnings in q2? (I think JKS will.) I currently have JKS at 3,6$/share in 2014 (down from over 4 because of the one off currency hedging effect) still defending a much higher valuation.
    Jun 16, 2014. 05:08 AM | Likes Like |Link to Comment
  • ReneSola: Do You Want To Buy This Lottery Ticket Ahead Of Earnings? [View article]
    ASP on projects means nilch nada if your keeping the projects yourself and earning Feed in tariff income. And also your comparing asp of projects sold with low IRR vs JKS high IRR (52% net profit in q1) that is a faulty comparison. Your logic is very strange larryvand. Why are you always trying to portray JKS in a bad light with faulty logic?
    Jun 16, 2014. 05:04 AM | Likes Like |Link to Comment
  • DAQO New Energy: A New Leader In The Polysilicon Industry [View article]
    Regarding FBR: The next generation (FBR B) is not going to be less quality than simens based EG. It will be very pure. I have read a lot of the rec patents confirming this. (some examples: http://bit.ly/1mT1YKK

    and
    http://bit.ly/1mT1YKP

    It will also have a total cost of around 11,3$/kg and cash cost 7$/kg according to a presentation from may 2012 (source: http://bit.ly/JRF1a4 ) So I would basically not count out REC FBR yet. THE sunedission/simens FBR is a bit more costly since it uses a 3 step reactor process so it is more about pure quality than cost control.
    Jun 13, 2014. 05:08 PM | 1 Like Like |Link to Comment
  • Winners And Losers From The U.S. PV Tariffs [View article]
    Good comment sleepyhead. Objective and to the point. I agree mexico looks like a likely spot for more manufacturing capacity in this environment. (If we do not see a seia negotiated deal between us/china in around 3-6 months time that is.)

    I would add that actually anyone with a big inventory in US currently is also a short term winner as they can sell at higher prices now and clear out inventory, as long as there is no retroactive tariffs these are already custom duty cleared so there will be no margins on such products. I would however agree this is only a one time effect so china/japan better step it up for Q3 (and they are, look for example to todays news about better DG tax conditions.)

    But overall yes, renesola clear winner with oem model if tariff in US continues.
    Jun 13, 2014. 11:28 AM | Likes Like |Link to Comment
  • ReneSola: Do You Want To Buy This Lottery Ticket Ahead Of Earnings? [View article]
    I dont mind your post and I think you could make a lot on sol if things pan out. But let me be clear about JKS it is not because of a 1 cent lead on processing cost (jks 0.37 vs tsl 0.38) and less overall blended module mix allowing higher margins that is the reason I prefer JKS. It is the fact they have in December 2013 finished projects at a cost of 1,13$/watt and the trend is down in cost. They are very much leaders in this field and they have 52% net margin in Q1 for 213 MW of projects. I do not rely on luck (but sure suprise me in a positive way I dont mind), I simply need for the projects to be connected this year and this alone will give up to a 3x (if really 50% margins going forward as well) to atleast a 2x (at 35% margins) and then I have the leading production capacity at 3 gw end of 2014 for free- even if margins in prodution where to be halved it would still give more value to jks whe the projects alone suggest higher value for JKS than current mcap. THAT is why I own JKS, and the only risk I see in this is if China suddenly dropped feed in tariff, something not likely given the current 5 year plan and all the smog in the big cities now.
    Jun 13, 2014. 10:54 AM | Likes Like |Link to Comment
  • JA Solar: Does This Second Fiddle Company Deserve A Second Look? [View article]
    Ok gothca. I agree. No need to spin anything and the "second fiddle" thing is not good. But then again the author is actually positive to JASO as far as I can read the article. Regarding the cell efficiency article it is just sad and full of factual errors at worst and at best twisting facts to with the company the author owns.
    Jun 12, 2014. 06:00 PM | 1 Like Like |Link to Comment
  • JA Solar: Does This Second Fiddle Company Deserve A Second Look? [View article]
    A good discussion on JASO is bad? Many of these comments is a good discussion between me and sleepyhead. The way I read the article of the author he is actually positive to JASO so I really do not get the bashing he is getting. For the record I dont know Casual analyst, but I do however always welcome discussion on stock I follow and I dislike any argument that does not keep to facts but starts to go against person. (I only do this myself if the other party clearly is doing the same to me.) Hopefully you guys feel the same way.
    Jun 12, 2014. 02:51 PM | Likes Like |Link to Comment
  • ReneSola: Do You Want To Buy This Lottery Ticket Ahead Of Earnings? [View article]
    Larryvand your only reason for not wanting to comment more is because you know I am correct. The fact is an asp of 0.64 even without retainage is already a good premium compared with others in the industry and with c-si modules. Sure you can mix it up and add more mono like jaso does and get around 0.67-0.69 but then again you add 3-5 cents in costs as well. Your views on retainage says everything there is to know about your analytics. (That its based on your biased views.) Anyhow I do not see why I am even discussing this with you - the fact his JKS has one of the higest margins in the industry. You can talk as much as you want about premium modules or not but this is a fact and clearly shows whatever JKS does is definitively working for them, so called premium or not. And it is also a fact they have one of the industries highest project gross and if Q1 is representative of anything they probably have the worlds best net profit on projects (massive 52% net profit in q1.) I have never seen another project developer with these kinds of margins before and it shocked me in a positive way. (I was even onboard when JKS had 30% net profit margins.)

    Now when JKS gets some more mono portion with DG and current mono asp in china of 0.71 then we should see even higher prices. For Q2 they will have some pressure in china due to low asp on c-si here but counterbalance that with good asp in us (remember they already shipped here so selling before tariff was implemented) and japan. Q3 China will take over so I am not much worried here. I got asp at 0.62 and would be positive if anything better happened. Q3 should be great fun as they expect to have the payments from 2013 paid in this quarter, combined that with very high electricity revenue and high retainage during this quarter and you got a good chance of a very strong quarter (same with q4.)

    Anyhow it is clear to me you do not want to discuss based on facts so for me the discussion ended here.
    Jun 12, 2014. 09:51 AM | Likes Like |Link to Comment
  • ReneSola: Do You Want To Buy This Lottery Ticket Ahead Of Earnings? [View article]
    Thanks good points. I think the currency effect now is something I can actually calculate with. They have now been open with this and they hedge around 500 mil usd to yuan and 100 mil euro to yuan. If yuan increases from start of this quarter to end of this quarter we would have a gain. So going forward I can keep this under control. Personally I believe we will have both one offs going both directions but in the end it will even out so by holding long term and letting the project income realize itself I should be making a profit.

    What SOL has is a lot of r&d done on wafers and new product categories before the others (much more battery focus than others and this is definitively going to be a hot product in a few years.) They have also started to cure the balance sheet and the reduction in accounts payable etc was great. They also now have a great opportunity in the coming quarters with the tariffs and with a potential soaring poly price (before it goes down again.) Whats great about sol ofcourse is current valuation is basically they are going to have major dilution or even default, so unless this happens they should gain some value.
    Jun 12, 2014. 07:02 AM | Likes Like |Link to Comment
  • ReneSola: Do You Want To Buy This Lottery Ticket Ahead Of Earnings? [View article]
    "Do they get China FiT payments month after month? NO."
    Actually this is wrong they do. They only are lacking fit payment from an older period (2013) and have since then gotten all FiT on time. Just look at electricity revenue in the quarterly release and read the conference call transcript.

    "- Growth that was counted for in U.S. is on track? NO"
    Also wrong as they already shipped as much as 2013 now in 2014.

    "- Is their brand so great that is so much sought after and sold at a premium? NO. "
    Actually wrong also since they sell with a retainage the actual asp of JKS is 5-10% higher and you can clearly see they are starting to get a premium compared with some competitors now with an asp of 0.64 in q1 and on top of that you have 5-10% more asp from retainage in the countries where they give this discount.

    "Would keeping projects for themselves require vast amount of debt and/or stock dilution? YES"
    Actually no also. So far they have had to use around 200 mil usd for 213 mil of projects. To be more precice JKS used 1092,6 million yuan and got debt financing of 740 million yuan. So they spent around 182 million in cash for 213 MW of projects. (How can they be this low? Because they are miles ahead of competition on cost of making the projects, currently around 1,2$/watt.) I am pretty sure we will at most see minor dilution going forward (and I would welcome it as it would allow even more projects with 60% margins) and you seem to have no clue how well the IPO could go. (Look to sunedisson ipo for an example and add the fact that unlike suneidisson with mediocre margins the net margin of JKS for its projects was a massive 52% in Q1.)

    "- Could the company be in trouble in Europe? YES"
    And so could a lot of companies (was it not like 1000 pages solarworld sent?) But agree here this is serious. But I so far see no reason why EU and China should go back from the deal they have made. Just have to follow it but as with all other tariff process it will take its due time. By 2015 there will be other markets and by 2016 the whole eu deal will be over and no more tariffs there. (end of 2015 the current EU-China deal ends and after this there is no more tariffs.)

    I think someone is having his own views clouded or does not know the facts well enough.
    Jun 12, 2014. 06:48 AM | 1 Like Like |Link to Comment
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