as someone who knows about poly-si i thought i let you all know this
ok folks i don't own shares here or am short on this company but you all should know things looking very bad for hoku.
not even sure where to start with the bad news. but i guess i start with the new TCS plant.
the reason they making this is due to the recent drop in poly-si prices they know even if they stated production right now they be losing money. the price has dropped from around $80/KG to now of $57/KG. this might seem like still good profit margins but the best of the best producers who been doing this for ages have a cost of between $30/KG to $50/KG. these ones like i say have been doing this for about 5 years if not longer.
in those years they been able to tweak their plants in-order to get the costs down. there is no way in the world HOKU is going to start this thing up and hit less then the highest lower price, so it be around $50/kg to make.
HOKU knows this, the industry know this, now you know it also. this is why they are doing the only thing they can do in hopes of saving the investment. since there is three main costs in making polysilicon they looking to remove one of the main costs. they can't mine the raw silicon, they can't get power for free or less, so they have to make the TCS.
now they talking a whole new ballgame. as i stated before everyone knows they can't make polysilicon for a price that makes them a viable company for too long so i expect they will either owe the money due on the prearranged contracts or they will have to fill initial one at current price rates for a loss.
so look for a good year/who knows how long of losing money or they idle the poly-si plant till they done with construction of the TCS plant.
i will also throw this in here right now. these current prices on poly-si will not go back up they more then likely will stay the same or go even a bit lower. the top three producers of poly-si OCI, GCL, and LDK all have said they doubling production this next year and have just about cornered the market.
so where does this leave HOKU? not sure but i think they going to do initial runs fill the orders they have then idle the plant till they can make the TCS they need if and only if they think they can make this profitable at this point, but there is also a large chance that they just go belly-up on the whole thing long before the TCS plant is built.
if any of you all have any questions about any part of what i wrote feel free to ask i will do my best to answer why i see things this way, also i could maybe explain better why HOKU is in such bad shape.
No New News Here…TCS plant was always part of the original production/operational model along with the purchase of TCS from outside sources as needed during start up. While disappointed with the lack of clear “operational plant” statement, management has recognized the need complete the build out with the latest technology, albeit, an additional delay! This should be viewed as good news as they will not have to retool once production begins. Pricing competitiveness/profit comes with time once significant starts up cost associated with a new production facility begin to be absorbed. As a long term long, I welcome the news!
I used to own shares here, sold them a while back when the price went from 1.85 to 2.09.
If you don't belive me just listen to the CC, everything I said is said there! How can the plant have a future when it can't make goods for cheaper then what's selling now? I think they would of had a good shot of making it had they of compleated this thing 6-8 months ago.
In fact be sure to listen to the Q&A where they asked about canceled orders, they fumbel around a bit then say we in talks. Also they talk about base costs. You seem to think a poly-si plant is like the feild of dreams? Build it and they will come?? Sorry ain't happening.
Do you even watch the solar sector news? Prices been getting hammered! Bottom lines looking horrid! Prices are not getting better, and I wouldn't doubt a lot of orders cancel!