LDK Solar Co., Ltd. Message Board

Better go back and get a barrel of that DEET. The black flies ought to be gearing up right about now; in my experience, the mosquitoes are positively delightful compared with those.

From the 2Q 2011 Form 10Q:

17. SHARE REPURCHASE PROGRAM
On June 30, 2011, the Company’s Board of Directors unanimously approved a share repurchase program that authorizes the Company to repurchase up to $10 million of the Company’s common stock in the open market. Purchases will be made at the discretion of management, with the timing dependent on prevailing market conditions. As of June 30, 2011, no shares have been repurchased.

18. SUBSEQUENT EVENT
In July 2011, the Company repurchased 89,400 shares of its common stock at an average unit price of $1.0519 per share (a total price before commissions of $94,040) from the market under the share repurchase program.

Mike;

One other note-back in November, when LDK received the NYSE warning for minimum price, the turnaround from violation (11-05-12) to notice from NYSE was nine trading days (11-16-12). Once the regained compliance (12-14-12) the NYSE's advisory that they had done so took twelve trading days (01-03-13). Of course, we had a couple of holidays in there, which may have slowed the issuance of the latter notice.

Given the turnaround on the previous violation, though, I'd think the NYSE would have issued a notice long before now if they were threatening LDK with delisting due to negative shareholder equity.

I was looking into that a couple of weeks ago, when CSUN got their notice from NASDAQ. NYSE standards are more complex; there are four different sets of listing standards wherein a company can be considered compliant. Standards 1 through 3 require a minimum shareholders' equity of just $4 million. Standard Four has no minimum for shareholders' equity, so long as other conditions are met: Market cap. of $75M OR at least $75M in assets and $75M in revenues; market value of public float = $20M; minimum price $3.00.

Once listed, the minimum price requirement obviously changes, with the standard for all being a $1.00 average closing over 30 trading periods (already had that warning once).

There's one consumer area in the U.S. where I personally see demand-equipment packages to retrofit existing bicycle frames to operate as "e-bikes".

In the past six months I've heard from several undergrad college students whose parent I know, inquiring about adding power assist to their bicycles. Typically, these young folks may have an inexpensive automobile already, but one that isn't particularly economical or practical to drive back and forth to class. They lack the resources, however, to buy an entirely new, purpose-built transportation platform. All, however, have conventional bicycles.

One option is to add ICE power, but I've not found a kit that meets California Air Standards Board reg.'s. We probably could design one as a "one off", but that would be a budget breaker for most of these kids. I have, however, found bicycle conversion kits (hub motor, motor controller, battery and charge controller) that are a reasonably easy retrofit.

Just on the basis of casual inquiry, it appears to me that there are around a half dozen or so manufacturers offering these right now, but the market is surely there.

Ol' Greenspan's phrase "irrational exuberance" comes to mind.

Incidentally, did you see the Barrons article on the subject this morning? Some intriguing hints in there as to a potential compromise (I presume between the EU and China). One concept mentioned was establishing certain "regions" for PV materials trade; one might consider this a demand rationing scheme (or, being strictly cynical, price fixing by another name).

"The binding arbitration was "binding", no?"

Not sure. Here's LDK's PR on the matter:

"LDK Solar Announces Arbitration Award

Xinyu City, China and Sunnyvale, California, December 13, 2012 – LDK Solar Co., Ltd. (“LDK Solar”; NYSE: LDK), a leading vertically integrated manufacturer of photovoltaic products, today announced that the China International Economic and Trade Arbitration Commission (CIETAC) stated that the wafer supply contracts entered into in October 2007 and June 2008 between LDK Solar and Canadian Solar (CSI) and its China-based subsidiary affiliate are valid and effective through the duration and at terms and conditions related to quantities and prices set forth therein.

On December 12, 2012 CIETAC stated that by virtue of the arbitration proceedings CSI shall pay to LDK Solar an amount of approximately RMB 248.9 million, including RMB 60 million paid as a deposit and additional cash of RMB 188.9 million, to compensate LDK Solar for the loss of profitability as well as approximately an additional RMB 2 million to cover arbitral fees accrued as a result of this proceeding.

'We are pleased to receive this award after entering into this arbitration proceeding more than two years ago,' stated Xingxue Tong, President and CEO of LDK Solar. 'LDK Solar is committed to innovation, quality, and customer service. Our philosophy is to invest in building our manufacturing capacity to the right size for our valued customers. Regretfully, underperforming supply contracts contributed to our lower-than-expected plant utilization ratio. We strive to offer the best products and services to our customers so that together we can overcome the current global industry challenges,' concluded Mr. Tong."

I imagine that LDK does have the option to appeal the Court's decision, but as things stand, do they have the resources? Assuming that they do, does it make sense to pursue this in the context of their other financial troubles? No certainties in court.

Not sure what you mean.

Canadian Solar is the only winner in this particular transaction. They get out of the "take or pay" contract, and LDK must give them back their deposit (around US$ 9 million and change).

"Next will be battery packs that can be changed out faster than filling a tank of gas and supercharging."

Shai Agassi might have something to say, there. I don't know whether his Better Place holds significant intellectual property in that area. Carlos Ghosn slammed the idea pretty soundly recently, as well.

I'm still on the fence with SCTY. Given what they do, I think they're better-positioned than the folks in the module supply chain (i.e., SCTY doesn't have any overcapacity issues to deal with; in fact, that should be a boon to them). I'm just not sure they're aggressive enough in pursuing market opportunities. Can't kick about what the stock's doing, though.

If we're looking at a choice between WEST and dirt, I believe I'll go with the dirt. Way more value there.

OK, I see your reply now (thank you Yahoo!).

I suspect we're on essentially the same page, here, but with somewhat different understandings of the role the SRO plays between the issuer and SEC.

Once an issuer has acceded to (i.e., his registration has become effective on) one of the National Exchanges, it is the SRO that is the primary enforcement authority for regulations, inasmuch as enforcement action can be taken against an issuer for violations of the Exchange's own regulations exclusively, or of Exchange regulations that are merely reiterations of SEC regulations.

The "National Securities Exchanges" are explicitly defined as "self-regulatory organizations" under Sec. 3 of the Securities Exchange Act of 1934.

As such, the promulgate and enforce their own rules, some of which include SEC regulations, while others are unique to the exchange. As elf-regulatory bodies, their rules and regulations have the force of law. Don't take my word for it. Look up the case law.

You may wish to refresh yourself regarding the Securities Exchange Act of 1934, specifically Section 6, "National Securities Exchanges". Regulatory enforcement authority is a requirement for a National Exchange, to wit:

"(Sec. 6)(b) An exchange shall not be registered as a national securities exchange unless the Commission determines that—
(1) Such exchange is so organized and has the capacity to be able to carry out the purposes of this title and to comply, and (subject to any rule or order of the Commission pursuant to section 17(d) or 19(g)(2) of this title) to enforce compliance by its members and persons associated with its members, with
the provisions of this title, the rules and regulations thereunder, and the rules of the exchange."

Dr. Gillis's entire commentary on Doty's remarks:

"The implications of this 'protocol', if concluded, may be significant. An agreement to exchange documents would presumably mean that accounting firms will be permitted to send audit working papers outside of China and to give them to foreign regulators. That would seem to settle the cases against the accounting firms by the SEC in the US and the SFC in Hong Kong. While I understand the negotiations by the SEC and the PCAOB have been handled separately, I expect any agreement applies to both and will be extended to SFC in Hong Kong as well.

I expect the agreement will be announced as part of the Strategic and Economic Dialogue between the U.S. and China scheduled to take place in early July. Once the SEC gets the requested working papers, I expect it will dismiss the case against the firms. That removes the most urgent risk that the accounting firms might lose the right to practice. Accordingly, this agreement likely removes the risk that U.S. listed Chinese companies will be delisted.

For the PCAOB, the agreement is a painful compromise. There is no deal allowing for inspections. But the protocol might allow working papers to be shipped to the PCAOB in the U.S. for inspection, presumably after being redacted for state secrets. That is a poor substitute for on the ground inspections. I believe that the PCAOB is facing significant political pressure to accept this deal.

I believe that the protocol will make it very difficult for the PCAOB to negotiate joint inspections. While they still have the power to deregister the firms they cannot inspect, I think that the political consequences of doing so are too high, so they have lost the only leverage they had. Instead, the PCAOB is likely to have to swallow inspections by mail."

Sunways surely put a crimp in my little inverter pricing study. I'd already lost SatCon, of course, after 2Q 2012. With Sunways out, I'm left with Power One and SMA; not really sure how long I'll be able to get Power One data if and when they're absorbed by ABB.

I've now been through LDK's 20-F, and it's really difficult to find a bright spot. The only profitable line of business I see there is the EPC work, and we know that isn't due to SOPW. Must be in China exclusively. Even their OEM processing, which had been profitable, was slightly negative on the year.

One other little note worth mentioning regarding SMA-exports accounted for 67.5% of sales. That theoretically leaves us with around 379 MW sold in Germany, which would account for nearly half (48.85%) of all PV installations there during 1Q 2013 (the German Federal Network Agency is showing 776.36 MW installed from 1 January through 31 March of this year).