On the understanding that all solars are in the dustbin, all are priced for bankruptcy, who, on the premise that a 20GW / $80 billion annual solar revenue market-wide will be picked up by someone, has the best chance to pick up the business and survive?
Well, in a hyper-competitive market, you need a cheap workforce, that deals out the EU and the US. First Solar may survive if they do execute on their 15% efficiency by 2014, the rest, no.
So, taking the rest, mostly in China, what would you need to be the most competitive. Obviously, you would want to be competitive in every vertical (poly/wafer/cell/module) and have them all.
Yingli are struggling with their 3K poly, so will likely be as many others with the other verticals excluding poly. Of course, many Chinese solars do not even have wafering facilities nor cell.
Bearing in mind that poly is where the battle will eventually lead, because it is the most expensive vertical to build, the most difficult to operate and takes the longest time to construct, companies without poly are at a huge disadvantage, ruling out JASO, TSL, STP, JKS and others.
That leaves LDK and SOL, whilst neither have evenly distribute verticals, they both have end-to-end production albeit Rensola now producing wire as well ($40million investment I believe) to gain an extra few percent advantage over everyone else.
We know the woes of LDK in terms of balance sheet, integrity and debts. They are finacially struggling (looking to raise capital) whereas Renesola is not, potentially putting Renesola at the top of the tree for now.
Should Renesola be successful in their bid to produce poly at more and more competitive prices (executing well on the 8500MT for Q2 2012), then they are in a very strong position to pick up their proportion of the 20GW. They will have the lowest cost (and very rare) fully vertical cost structure (LDK has higher debt) and so will form the target that the rest will aim for.
One thing is sure, if Renesola does cease trading, we can expect a 300% rise. But what if the company survives, which we all know it will, then a rise of 1000%, 2000%?
Or perhaps all solars will just die together and give up the annual $80 billion as the market would have us all believe?
I know this is the SOL board and I do own a little SOL (cost basis $3.4), but my major holding is in CSIQ (2,000 shares at a cost basis of $6.7).
How do you feel CSIQ stacks up against SOL?
I'd ask over there, but no one really posts on that board.
Appreciate your answer.
CSIQ has a spotty record in the past, a dog in Q1-2011 but caught up some at Q2.
The problem for CSIQ is its 1.1 bln debt - I guess the debt will go up more in Q3 report. With the low module ASP, CSIQ is likely to have a loss at Q4 and next Q1.
Same thing goes for YGE and STP, both debt are heavy.
LDK has the most debt - so its future is the most unsure.
Poly is not the key vertical here, everybody knows good thing don't last. I am sure poly will drop below $40 next spring. That's why DQ slid along all others despite it is mostly poly.
The key is debt and cash on hand, plus efficiency. The profitability for all solars will be bad from Q4-2011 to Q2 2012. That's a given. Not certain after that, but likely to be poor too. So it is war of attrition. The companies with heavy debt will face the problem of debt payment. Without earnings, what can they do? It is unprecedented situation and that's why the sector is trashed.
I have SOL/HSOL/JKS and a bit TSL - all with light debt compared to others. HSOL is the one with least debt, but its operation is a mess in Q2. SOL's debt is higher but its cash on hand is also a lot higher. SOL's higher debt is due to more expensive wafer and poly plants. Cell and module capacity are much less expensive to build. JKS is super efficient, with a modest amount of debt. So JKS is looking fine at the moment. TSL is the king among Chinese solar, but yield to the gravity of dropping ASP too.
The solar market is murky now, I am confident that SOL is gonna survive the shakeup.
Until you own 15000+ shares with a basis of 8+ and a loss of 90k (like some of us), you dont have what I would call a major position.
Good luck though.
Jeez this has been one piece of crapola for me.
I know the price is killing everyone, but for the record and you can check my name against previous posts, I went through the same thing with sirius radio. Everyone said it would fail, but the few of us that hung in there are thinking why, they will own every car radio in america.
Rode it down to 6 cents buying all the way down from 2.80. Its now like 1.80 so a 3000% rebound. At 6 cents I owned 800,000 shares, yes cha ching
I google Solar in the news section often, we get great articles everyday about increasing use. Something has got to give