considering they can't drink their water and the mountains are bulldozed and made into slurry pits, I am surprised it is that strong
were not you the guy who said he was maxing out his credit cards and taking a second mortgage to buy LDK back in the summer of 2011? Pump Pump Pump er Doh is back. PhreeTrash PhreeRash etc.
2015 looks very good. I am looking for and increase of 700M-800MW modules based on anticipated market growth of 5-6MW over 2014. Their year end capcaity at 3-3.5GW. That is good for is good for 3.6-4.2GW+. With 500- 700MW of proejcts that leaves 2.9-3.5GW of modules midrange 3.25GW.
I also look at the 2015 target to be 52GW AC rated projects. This is a target 65GW of DC rated modules. This is an increase of 7GW DC estimates of 58GW DC(47GWAC) rated 2014 level of shipments. This means they grow at a 15% market share or well above the ~5% current market share.
I posted some number on JKS board but in general $8-10 a share if they keep the project business. If there module only $6 a share in EPS off the top of my head
Tariffs, one can speculate but until they are set in the US, the impact is unkown above what I described above. One might guess an additional 5 cents or $15M and another half cent impact on costs for all 2500MW. In addition there is increased calls for tariffs in Japan and Australia on both Chinese and Taiwanese that may impact the cost of business.
The FIT reductions and incentives dropping in Japan Europe and California should lower the ASP in these regions along with increased competition. This should not be unexpected as they are telegraphed and have shown in the past through Germany that a decrease in FIT can lead to a rush of orders and higher shipments.
Regional Shipments there is reason I believe ASP will stagnate at $0.64 or drop a penny or 2 as regional shipments shift. The shipments move from higher priced Europe to lower priced US and Japan with Japan ASP dropping several cents this year from the $0.70 in 2013. They indicated China ASP increases are likely to stop as the ASP becomes stable in China. That was a driving force with the lower processing that lead to the increase in margins. That and and the 20% reliance on Europe in Q4 maintained a higher ASP.
These lead e to believe margins for JKS will stagnate as there are areas of cost increases that can impact current Q4 costs by more than the 1.5 cents of Poly and could add 2.5-4 cents in costs. A belief in stagnant ASP to a slight decrease would just indicate margins maintained around Q4 levels for most of the year. This may move up or down a penny or 2 . A penny shift is a 1.5% increase or decrease on Gross margins at $0.64 ASP. I find it unlikey not improbable for 30% margins for modules on a $0.64 at the end of the year 2014.
I have conservative view with margins for modules at 22.5% and overall blending at 23.5%. I am being conservative on these ranges. Based on these ranges and my target Opex and interest, I have upper $5 range before forex and other adjustments. I do use a lower ASP at year end than $0.64. Average guidance is 20% increase from Q4. So one should not expect much more than 20% over Q4 net profits. With the added project revenues you could expect $30-%50M +/- added net. This gets offset by increased share counts.
It is uncertain about exact margins as there are several factor at play that creates upside and downside risks. Costs, outsourced costs, tariffs FIT reduction in key markets, regional shift in sales.
First is cost. At $0.39 in Q4 and a drop being conservative at 5% you have a $0.37 processing. The better spectrum has a 10% cost savings and a $0.35 cost. I use the conservative approach for the year. I view the 10% as a year end cost target with reasonable probability to be met. They indicated Q1 a rise in Poly of 1.5 cents from the $0.09 on $18/kg poly . That would indicate 5 grams at $21/kg. There is risk that this could increase by another $2/kg or $0.01 basically keeping costs flat to Q4. Looking at that I model a conservative cost of $0.48 for internal costs.
Outsourced costs to the US generally runs 6 cents. If Tariffs are in place on Taiwanese cells, then that cost may increase even further. With increased targets in the US to 15% 300MW shipments, the blended overall cost impact will increase from the Q4 level of 7% of shipments. This should offset some of that 2-4 cent processing savings. This cost could be $12-$15M additional or half a cent on total shipments.
As CDB debt, they want their money. You can't leave it behind for the US shareholders to own. Basically you have to hand over the assets to the CDB, then they can spin off the company for the debt owed + . In the meantime the US delists and removes itself from existance.
Right the $3B debt is owned by mostly CDB. Who the heck are you going to offload the debt to and what value do you place on the Plant presuming they can make it work. SOL could not make their upgrade from the Legacy Technology work so why would you think a company that failed worse(LDK) would fair any better?
///hot sector of late... I///
Good to see PumperDOH orPumper DUH still here.
Phree, what was the true cost of the Poly plant built for and what did Nick Sarno indicate the amortization would be per KG and what was their production cost to be?
Answer the plant was to be built for around 1.2B. I t quickly ran into cost over runs and fast tracking that ballooned it to if you believe them from 2 years ago $1.6B. If you believed their Capex statements it was $2.2B as of 2 years ago. They rolled so much interest into capitalized debt that they are at $24B for the plant + before the $400-$600M upgrade that may in fact not wrok at all like SOL found out.
So from a depreciation rate they claime around $15/KG and what was going to be around a $20 cash cost for a $33-$35 loaded cost. Doubling the capacity would drop thedepreciation by $6-7 dollars if there was no capex. The best cost they could do then was $22. If they saved on energy then they might get $22-$23/KG loaded costs if it cost nothing to upgrade and there was not the delays in building and a $2.4B cost.
With upgrades and capitalized debt you are at near $3B in cost and that depreciation is now built in at $25 on 15MT. After upgrades that depreciation is 66% or $16/KG at 25KMT. If the Hydrochlorinization cuts $4/KG then the cash cost drops from $16 to $14 under full utlization. Possibly $12. Their poly cost loaded is still going to be $28/KG using US accounting laws.
The Plant is never going to return the $3B costs including capitalized debt and theior is ZERO value in LDK.
Actually that is a lie as their inlfated assets toda is worth Negative $1Billion to shareholders. Their real value is closer to Negative $3B as the plant is not going to return anywher near the $3B spent.
agreed so this is now priced out for 2015 earnings estimates that include a 35% growth for 2014 with EPS ~$1 and a 30% growth rate with a ~$1.60 estimate for 2015. So it has ran.
Trust me, I know what they say. I have been reading their threads for some time through a buddies account. I just keep my mouth shut. I do not really care what they say because they were the same idiots pumping all the way down and harrassing me on the yahoo boards. The fact that some are just now running 2015 estimates is laughable oh and those cooberate my numbers.
How about this. Cell at $0.20 bout at $0.04 or 20 cents on the dollar. SOL pays $0.06 premium for tolling over market. In the first watt shipped, they make the $0.04 spent and the $0.02 added. plus they get depreciation cost from it for cash flow granted only half cent but cash back none the less. They basically in 1 year make 1.25 times their investment. If it lasts 18 months, even better.
I have news those 24% cells Trina has claimed, they will be more costly to manufacture and will be in low volumes for several years to come as they have 3GW of the old capacity still running with another 4 years depreciation on them. Nobody is going to write off $240M of cell capacity left on the books in a year or 2.
If you look at their MW shipments for revenues Q4 is what the average is to be like. They will not pop much over what they did in Q4 earnings this year as projects and FIT are back end loaded. New Capacity is not online until Mid 2014. Guidance is basically 2600MW for 3 quaters or just over 820MW a quarter. New capacity not online until mid to late Q2, limits shipments for Q2 to around 800MW. Not much more than Q4.
I hope people recognize this. Profit growth starts to stagnate as upside gross improvement goes from $0.11 per watt to $0.13 tops or 20% GM. That 2 cents bullish upside an upside of 50 cents in earnings from below $1.
but you all recognize that right?
The good news 35% growth rates for the first 3 reporting. The bad news, 2 of the 3 are not profitable from an operational persepective from module manufacturing. 1 required paper book accounting tricks to be profitable yet again.
Now the dredges of Solar start reporting. With each report, I might speculate a good beat down will occur.
Yes when I was there he preached the value of the report. My comments was it was always back looking and not forward looking and therefore not worth the money. I firmly believe that still..When they started making estimates based on that and were way off what real asp and volumes came in at. Clearly, based on other being off and missed items they have not learned how to read the data they buy. It is a con to get someone into $100 a month for data compiled from who knows who and is questionable for how accurate and it 2 to 3 months old. I may not have made 10x on trading solars the past year, but I did make 4 to 5x without it. As I said, look at his articles track records, not good.
The companies guide a year and quarterly. They tell you target market as a % of shipments and revenues they tell you the past and suggest the future. Anyone with knowledge of ASP can set up a model and be pretty darn accurate for ASP. Someone can look at guidance capacity and market dynamics to be pretty accurate also for shipments. It is all publicly available and not for a fee. The dynamics to not change that rapidly.
I may not have made 10x on trading solars the past year, but I did make 4 to 5x without any of that.
When do you think SOL aquires cell capacity?
Forest I was there a year ago. I saw the abuse that many of the posters were allowed to do while others where reprimanded for far far less. The owner of the board is a censor as well and will delete posts with no notice to the poster as to why it was deleted. The interesting thing I found was that most of the bashing on the Solar boards on yahoo was actually those pumpers who did not like being told that they were wrong in their views and they were losing money as the stocks kept crashing.
I actually do not see the value of the guy and his board or articles. If you read what he has written on SA, most have been flat out wrong from his profitability report, to his call for profits for SOL(and as you noted all in on it before Q3), for his speculative posts on HSOL(down some 40% since October), His call for TSL to be one of the worst losers in eanings in Q3(up over 250% since August Q3 ER) to their calls for Jaso to be profitable in Q2 of last year(flat price since Q1 they peaked at 11 after Q12013 ER)
1:Yes per the 2013 20 F there is 3,948022836 shares. There are 50 shares per ADS. Or roughly 80Million ADS shares. Of these shares, there are 2.594B shares or 71.866M shares.
“American Depositary Shares, each representing New York Stock Exchange
50 ordinary shares, par value $0.00001 per share”
“The percentage of beneficial ownership is calculated by dividing the number of shares beneficially owned by such person or group by
3,948,022,836 ordinary shares, being the number of shares outstanding as of March 1, 2013.”
“As of March 1, 2013, 3,948,022,836 of our ordinary shares were issued and outstanding. Based on a review of the register of members maintained by our Cayman Islands registrar, 3,594,301,350 ordinary shares, or approximately 91.0% of our issued and outstanding shares, represented by 71,886,027
ADSs, were held by The Bank of New York Mellon, the depositary of our ADS program and a shareholder of record in the United States.”
3: I make no comments on daily movements and only point out fundamentals and analysis based on fundamentals, Differing views on PE and market sentiments can lead to different valuations. In a Bull market I will use a PE of 12 for solars. Some might use 15-20.
He I did not realize my estimates are more bullish then Cowen and Co. and right in line with analyst estimates average.
I did, they guided Q4 down. You read my thread on the negatives the other day right? One comment I made was #$%$ weather in the US. All their projects are in Canada and the US. Add the Chinese New years and a short quarter with February you have a decline in sales.
CSIQ guidance was pretty good for 2014 Their MW was right in line with my estimates in October(browse for Peak in CSIQ over the past year). The only thing off is light on projects by appx 50-100MW in their guidance. But they said they are being conservative on that and hoe to exceed. So in all I see them at a low range of $200M net before adjustments and a high of $280M net before adjustments. based on Guidance right around $230M. I expect them to exceed guidance and my $270-$280Net is slight biased downside.
If any of this is accurate, they will return nicely by mid 2014.
The question was why it was down.
You had an invasion and fear of war correct?
You had Trina guide flat margins correct?
CSIQ had margins down correct?
Poly prices are up a bit correct?
Did not JKS say FIT payments were delayed? That was a Q3 analyst question as well.
Living in the US, bad weather, CSIQ stated that
It is not that these are all bad and all negative they are a fact of business. It is what is the impact on the stocks short and long term.
If you trade as I do on 3 day to 3 month or more hold periods, understanding some of these impacts is warranted.
I suggested to someone that CSIQ would make $19M and would guide shipments way down for Q1. I expected that projects would be low and shipments low due to weather and CNY. His comment was if that happens, the stock price will drop. That was they guys comment. not mine. What happened today when those suggestions I made to him were accurate? CSIQ down 6% today.
If you understand the market conditions and what may impact sentiment, you can trade around these dynamics. I still fundamentally have not changed my targets on CSIQ after todays ER. My only beef with it was they are light on Revenues primarily due to projects. But they stressed conservativeness and the hopes to exceed project guidance.
since I do not do options, I do not care about a day or 2 move
Not only the installation but the certification of the projects that were build. Dead winter least amount of Sunlight in the year, add to that the cloudy weather from the storms and the snow build on the modules you get real lowsey performance. I am certain they need April through October for proving and certification of capacity generation criteria. Thus they have a hard time handing over the sold asset and getting the revenues even for stuff built back in September