46 replies to this topic

[odyd]

Europe they think will be very strong in H1 as well. ASP supposed to be stable, poly going up to 24-25 USD.

This is self-promotion on their residual plant, which still get millions of dollars in R&D.

[explo]

What are liabilities held-for-sale for $ 99 mln ? Anyone knows ?

 

Thx

 

 

That should be related to the 60 MW PV power plants they sold. Asset taken out of PPE and liabilities out of mainly LT loans it looks like. Around 23m equity sold it looks like.

[explo]

I haven't seen much comments on this ER from SOL holders (except for busraker). Did holders like the results and outlook? Personally it was better than I expected, but it is still not investable. Bleeding stopped, but not much repair. Better than YGE, worse than HSOL.

[odyd]

Total solar module shipments shown on p.16 show 2.3 to 2.5GW vs. 1.7GW in 2013. What is SOL's own capacity, knowing that 1GW is outsource?

[pg6solar]

1.2GW (with GM 15%) internal and the rest (more than 1GW) outsourced (with GM of 11%), as per CC.

[explo]

Total solar module shipments shown on p.16 show 2.3 to 2.5GW vs. 1.7GW in 2013. What is SOL's own capacity, knowing that 1GW is outsource?

 

I think it's 0.9 GW in-house and 0.9 OEM in China (from Q3 ER comments). 1 GW is global OEM. I think the OEM "strategy" is just an excuse. They burnt their capital and have to grow asset-lite now. The problem is that the growth will be profitless and likely just stretch them more on any unexpected turn.

[explo]

1.2GW (with GM 15%) internal and the rest (more than 1GW) outsourced (with GM of 11%), as per CC.

 

Thanks. So they got those 300 MW internal back.

[explo]

1.2GW (with GM 15%) internal and the rest (more than 1GW) outsourced (with GM of 11%), as per CC.

 

So they should be above 13% blended GM.

[pg6solar]

So they should be above 13% blended GM.

Even if they do, they'll be still well behind the leaders (like JKS). My interest in CC was to know if they were going to spook the market again. Fortunately, other than the Poly spot price increase comment (if one believes them), they were generally positive on the demand (including EU and especially China in H2) and the ASPs stability for the rest of the year.

[odyd]

They are showing $0.68 per watt for Q1. Since they are not top ASP guys it should bode well for others. They are also posting good demand for Q1.

I would not purchase the stock because of the balance sheet, but they did improve their debt and payables, which indicates a better cash flows for other companies. They did better than I thought they would.

[JMK]

JMHO: SOL performed better and out of dangerous zone.  Only in day like today  the stock that beats in all instances is in red. I think SOL will outperform some other solars on a way up due to currently very low valuation. I took a chance and trippled SOL position right now.  

[JulyWebb]

JMHO: SOL performed better and out of dangerous zone.  Only in day like today  the stock that beats in all instances is in red. I think SOL will outperform some other solars on a way up due to currently very low valuation. I took a chance and trippled SOL position right now.  

 

I think their just letting it ride up without an attack for now. Then will short it once it looks like everything's alright. Nothing made sense other than games that were played today and that's the game I'm calling on for SOL. I wouldn't fall for the HF next in line Short Trap.

[odyd]

What are liabilities held-for-sale for $ 99 mln ? Anyone knows ?

 

Thx

Those are borrowings against the asset pool held for sale. For a moment I thought they paid off their debt but they pooled liabilities off to a different line. All the cash went to accounts payable, The $122M for sale will give them some $21M cash balance when completed.

[busraker]

I have updated my SOL spreadsheet and surprised myself that I had 13c eps and 15c eps for Q3 '14 and Q4 '14, which I think might merit a $5 share price 12 months out, with a buy target in the $3 to $3.40 bracket, but the sensitivity on the figures is quite high, as in 1% GM change and your investment case goes out of the window.

 

SOL do seem to control FX well - their entire Foreign exchange and derivatives outturn for 2013 was a loss of $0.26m!

 

In my head I have the SOL share price matched at around 1/12th or so of a JKS / CSIQ etc.  Interestingly the ratio was 2.4 back in May 2013, when they looked like being a JKS flower.  But they didn't blossom.

 
See the pdf attached.

Attached Files

•  SOL Results.pdf   45.56KB   29 downloads

[explo]

Nice sheet, thanks. I've taken a quick look too. The most surprising thing is that the depreciation went up a lot, contrary to what I expected. This means their cash flow is actually becoming quite healthy, but as with YGE I think the BS is in too bad shape causing a too heavy burden handicapping the competitivness of the company in the long-term. You can already see this in SOL's strategy shift to not invest in manufacturing capacity expansion. They say it is a strategic choice, but I think it is a consequence of not having investment funds.

[eysteinh]

Thanks busraker. 

[iwcwatch]

Thanks Busraker.

 

Roth Capital upgrades ReneSola Ltd. (NYSE: SOL) from Neutral to Buy and lifting its price target from $3.80 up to $5.

[busraker]

It is difficult isn't it to work out why SOL went so hard at OEM outsourcing.  I know they like to differentiate themselves, so there may be some of that philosophy behind it.  Clearly, the restricted access to capital could be a strong factor - the lack of internal cell and module expansion plans disappointed me the most through 2013.

 

I also wonder if they felt too wounded by the recession - and decided to go for the 'safer' and 'flexible' strategy of OEM manufacturing as their solution of how to avoid being so hurt next time - i.e. a more stable business model.  Unfortunately, they are implementing it as the market is going up and rewarding those who are straining to make every penny in the upturn.

 

I am trying (again) to work out their COGS.  They stated in Q4 13 CC that GM 'will' be 15% for internal and 11% to 12% for outsourced, but I think that's a smoke screen to pretend there isn't much difference - but it ignores the fact that the ASP achieved for the outsourced modules appears to be quite a bit higher than for the internal ones.

 

If 2/3rds of their modules sell for 70c ASP and the other third averages 64c (extrapolated from the CC) and internal : OEM production is about 50 : 50.

 

Then the half of the modules sold via OEM outsourcing sell at 70c, with 11%GM = around 62.5c COGS.

The half of the modules produced internally sell at average of 65.4c, with 15%GM = around 55c COGS.

 

This calculation then gives the '6c or 7c' difference in OEM outsourcing from previous CC's.  It's the best I can do to understand it.  Either way, I don't like it, but there is scope for PPS appreciation.

[explo]

>>I am trying (again) to work out their COGS.

 

I'm thinking their wafer gross margin is around 9% or 2 cents on 22 cents ASP. Then they have 40m other revenue at unknown margin, but they says in-house module GM is 15% and outsourced is around 11-12%. Let's assume a quite big portion of outsourcing e.g. around half of their production, then the blended guestimate falls quite solidly around 13.5% or 58 cents COGS on 67 cents ASP.

 

Outsourcing to circumvent trade barriers could be a fine strategy, but when they talked about outsourcing panel on top of already a lot of cell production in China I was lost. Some outsourcing is fine to manage risk, but give away cell production profits for 90% of your hard earned module sales is too much.

[Pop2mollys]

I sold out of my RSGE on Friday. You guys might want to buy real quick before they report. I sell it soars, I buy it dips... lol