SOL 67c (44c for module + cell, 23c for wafer)
LDK 70c (21c wafer)
SOL 62c (fully-run)
2012 YE target
I've listened to sol cc now.
Poly only written down to $35 instead of $25. This means still too high cost inventory in Q4. They should just have taken the full charge. Of course that would have implied that they should shut down poly production.
Weirdly they guided almost half shipments to be mono in q4. I thought they only had 50mw mono per q capacity left after going full throttle on multi furnaces and selling some mono equipment. With half mono at .40 and half quasi at .35 they should make .38 asp in q4. Way better than the .30 multi asp in q4, but still below their blended q4 cost since they enter with 230 mw inventory with $35 poly cost.
I don't get how they can guide $30 blended poly cost when there's 260 mw inventory including module with poly at $35 and they will produce another 150 mw at low $30's. Companies need to be more carfeful with whether they mean blended cost of goods sold or blended cost of goods produced in the quarter now that prices are down 30% QoQ.
Looks good long-term i think despite the gcl opponent, but short-term the market couldn't be suckier for them. They should ship as much modules as possible as they'll make money on that.
I think SOL still having 200MW mono and they didn't exactly say that they dumped away equipments on the other 200MW mono.
In reviewing one of OCI report, their 2012 poly production cost is $23/ cash cost $18. This is not lower than DQ's $20-22 after expansion and SOL's low-$20. Strangely GCL sounds like the only real low-cost poly producer now with 2012 GAAP (really?) cost $17 or so. Well, when the majority are still producing at $22-23 range, I wonder what poly price could eventually stabilize?
just listened to JKS, and heard the 62-65 in 2012. I was quite surprised a target of 60 cents or lower since it attributes little to any material cost reductions efficiency gains or yield improvements.
Do you think that be due to some of their internal verticalizations or a lowballing of expectations?
You are probably right, I think 62-65c also what I heard, thou transcript said 63-65c. I think CFO went to CC without preparation that TSL and YGE claim lower targets. Therefore, the gap on target might be meaningless.
So, I don't have problem on their processing cost and trend, I don't have problem with their write-off on inventory. I am a bit concerned on their A/R but not a confidence breaker.
The real concern, I hate to say it, during the conversation about Q4 utlization, CFO incidentally put out a very low Q1 revenue expectation (while STP's Q1 is flat to down). I think either JASO or CSIQ declined to guide Q1 till Chinese new year. It might be bit too earlier for JKS to say anything about Q1. But somehow it seems to point to JKS's less competiveness in landing orders outside of Europe region. JKS has a few major installation partners such as IBC. Somehow, JKS counts on these partners to land orders in the past.
Yes that's why I said price will stabilize in a couple of quarters, but at least now in Q4 it is $0.30. Even if you can get poly cost down to $25 from only using spot bought on spot market you don't get cash-cost below $0.30. For GCL that has internal poly supply the same principally applies. They will lose money on selling wafers instead of poly if price is below $0.30. Like I said SOL should have competitive product and cost even though behind GCL and will get the margin benefit of that in a couple of quarters. I'm just wondering about their ability to align costs and ASP in the mean time. I will listen to CC to hear how the plan to blend down poly cost and achieve big ASP premium in Q4.
Thanks odyd and floppy for listing these important performance metrics. I'll try to contribute to odyd's list on the site when I get time to go through all the cc's.
Two initial questions:
1. Poly cost must be production cost for ldk and sol. Not blended cost, right? For those not producing are you using procurement or blended forbthe quarter?
2. Ldk and sol retain wafer ASP well, while for general wafer market for contract purchase was dropping more than 40%. how did you arrive at this? Sol maybe due to quasi-mono premium, but ldk only dropping 5 cents is surprising.
Second table is contract pricing:
Suntech's processing cost at Q3 was 74c, going a bit higher in Q4.
Suntech used better quality of raw materials so to make processing cost higher and in the meantime obtained a higher ASP. At least two reports I read indicated that STP's Q4 ASP $1.20. This is unbelievably high when JKS only gets $1 and CSUN only gets 91c. I think this a huge misinterpretation over their system business mix. Still, their ASP might fall to $1.1 range.
I think JKS management was being very conservative when they came out with numbers and estimates.
This sets up them buying back stock and then beating going forward.
Lets hope that they are that smart.
This should be over $7 just based on how the rest of the group has traded.