200 replies to this topic

[eysteinh]

Sorry, I'm referring to a great Q1 quarter. So both EPS and margins. There has been some concern on a significant ASP drop and margin compression. I'm more optimistic. I hope I'm right.

I hope your right too and I am wrong (I prefer to be conservative in my jks estimates.) 

[joshchang]

Wuwei project sale gm is in high teen so module gm is 20% or so. For lowered margin in q2, i guess 3% at most due to poly, then more sale mix to china resulting lower asp plus low balling if they have cost cutting initiatives going on. They will have lower opex% to revenue in q2 due to much higher shipment and higher china mix. Great quarter. 2014 will be the Return of the king indeed.

[odyd]

Looks like 13 is on the verge

[eysteinh]

I just got home to see all this, anyone know if US shipements for TSL was high? I think this is reason for high GM of modules but I have to read everything (just got home to see all this ) If that is the case JKS will do well too I think. 

[BIPV Investor]

Was someone worried about demand..? BIPV? Trina doesn't seem worried with more than 1 GW high end guided more than half way through Q2.

I'm in the middle of the rainforest in Belize posting from a solar powered wifi station so havent had a chance to follow the results. Based on stick performance today they said something very good. I have to congratulate Odyo for his call as it has been the best call so far.

Sorry I missed this one and I'll be the first to admit that my worries are unfounded if they deliver 1GW in Q2. That would be amazing.

[explo]

I'm in the middle of the rainforest in Belize posting from a solar powered wifi station so havent had a chance to follow the results.

 

Very nice.

 

Sorry I missed this one and I'll be the first to admit that my worries are unfounded if they deliver 1GW in Q2. That would be amazing.

 

No worries about your worries. We need as many perspective as we can get to stay on toe. Yours provided a better understanding of how the market was thinking.

[pgo]

Congrats all TSL holders. Finally my worries about China is going away. If CNs can do as they did in Q1 without China moving, think what could happen when things happen in China. I think this could be the pivotal moment we are looking for. Now if technicals support us, we will be riding a good wave in short-medium term.

[BIPV Investor]

Looks like 13 is on the verge

Are you sticking to your plan of exiting at 13, or did Trina stay enough positives that you are staying the course? I apologize for my brevity, or if you have already commented on this else where.

[odyd]

I am already out 12.10. I bought CSIQ under 23 again. I have enough confirmation out of the market, that I can stay put.

[sunnysky]

TSL has made a lot of progress both in their module and project space. For the former, they are doing extremely well in Japan now and now have leading technology. JASO is the other CN solar which has made tremendous improvement. Only that the stock has not caught up. JASO is making great progress in projects now so I can only imagine WS find out this diamond (not so in-the-rough) soon. I still regard JASO as the dark horse for 2014.

[eysteinh]

After today TSL is 2nd place on my watch list after JKS, I am impressed with execution of projects and guidance for q2 was strong. 

[joshchang]

Sunnysky, I model China freight lower than rest of APAC, which in turn is lower than ROW. I think the steep decline in selling expenses contradicts my model a bit unless there were other reasons than the mentioned warranty and freight (like higher bonus and commissions for sales staff in Q4). What's your view on this?

commissions and bonus would be my guess. they are making steady improvment on opex. their financial managment is pretty impressive. i can see 11% or even lower opex as revenue when they increase shipment. great forex management and no cb hassle. plus interest expense is less than 2% of revenue. all these make tsl a low risk bet while still enjoy high growth of the industry and top players.

[eysteinh]

Opex is also very strong when you consider the fact they had a high % shipments abroad. This adds freight and warrenty costs. I was impressed, it was 4 million under what I expected. Just imagine what opex they can do in % of revenue if they have strong local shipments in China. To give an example in an IR interview I did with REC a year and a half ago the freight cost was around 1 cent per watt for abroad shipments. Ofcourse this has changed since then but gives an indication of how costs can be cut if doing local sales. We see this many times if you look carefully at the q reports, opex tends to fall down when doing local shipments. So that is again why I am today very impressed with TSL who have low opex % revenue even doing a small % shipments to China.  Granted they cut 2 million of research costs to make it slightly better than it normally is but even with that included opex was strong. Opex for me was the suprise as if I had this at the real level of TSL then I would have been pretty close (would have added me 5 cents to net profit giving me 0,34$/share - I edited my post 2 days ago to 0.29 from 0.19 ) but granted I did not see the high tax expense as well and module gross actually suprised me one percentage on the upside. 

[kknd1234]

Trina Solar (TSL) Q1 'Strong' But Some Concerns, Nomura Notes Nomura Securities analyst Nitin Kumar reiterated a Buy rating and $22 price target on Trina Solar (NYSE: TSL) following the company's Q1 beat and strong Q2 shipment guidance, which has sent shares up 26% today. http://www.streetins...es/9511841.html

[sunnysky]

I use a simple model of selling expense as % of revenue, but exclusive of project revenue. You'd come up with an estimate which is pretty close. In Q1, total opex was just a bit shy of 12% of total revenue. Yeah, I see this to be lower in Q2. With some project sales, it's going to be less than 11%, say in Q3.

[sunnysky]

Granted they cut 2 million of research costs to make it slightly better than it normally is but even with that included opex was strong.

 

It was $1.1M lower.

[sunnysky]

Trina Solar (TSL) Q1 'Strong' But Some Concerns, Nomura Notes Nomura Securities analyst Nitin Kumar reiterated a Buy rating and $22 price target on Trina Solar (NYSE: TSL) following the company's Q1 beat and strong Q2 shipment guidance, which has sent shares up 26% today. http://www.streetins...es/9511841.html

 

Thanks kknd1234.

Anyone has comment on their first concern:  74% increase in inventory in dollar terms ?

[eysteinh]

It was $1.1M lower.

Wrong, maybe you assume annual report? I use numbers from q4. They had 6 mil usd in r&d in q4 and 4.8 in Q1. (So uhm yeah 1.2 mil we are both wrong hehe) Granted it was 6 in q4 4,4 in Q3 and 4,1 in Q2 and then 6,7 in Q1 2013 so it varies a lot.I write this every quarter for all companies since q4 2009 and I round up. 

[joshchang]

Thanks kknd1234.
Anyone has comment on their first concern: 74% increase in inventory in dollar terms ?

they are preparing big shipment in q2 or some inventory that was supposed to sell in q1 got pushed to q2. i expect a drop in inventory in q2 reporting which would provide a nice cash flow boost.

[eysteinh]

Inventory is 96% of revenue Q1 up from 46% of revenue in Q4. It is highest of peers with next one CSIQ at 81% of revenue and HSOL at 68% and Ja at 66% and RECSOL at 55% of revenue.  My only comment is DOH ofcourse TSL has higher inventory if they expect 1 gw of shipments in Q1. Do they think modules are shipped the same day from factory to customer? 

Also they did however have a valid concern in wondering where modules would ship, but I would assume TSL would know what it does when it gave GM guidance so they probably know they are shipping to enough high ASP sectors (japan / usa etc)  to achieve this GM goal. 

 

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