276 replies to this topic

[eysteinh]

They have high debt low cash and are doing a lot of tricks with depriciation costs (for example shifting from 20 year to 30 year depreciation and writing down equipment then moving it) but I like the preferential electricity cost they have. Should be good stock going forward but not my cup of tea.

[sunnysky]

Why Asia’s utilities may welcome solar disruption

http://www.cnbc.com/id/101662660?

[JulyWebb]

Why Asia’s utilities may welcome solar disruption

http://www.cnbc.com/id/101662660?

 

Just wanted to point out the video they presented in this article came out 02/26/2014. 

[sunnysky]

A long analysis of CSIQ on SA:

 

High Growth Company Trading At Ben Graham Like Price

http://seekingalpha....ham-like-price?

[eysteinh]

A bit outdated as while its true in general FBR outputs at 6-9N there is already a test reactor doing well above this for REC. And in patent filings they already have EG quality material. Article is fine for what is going on commercial now, but not really for what is going to happen in 3-4 years from now. 

[explo]

Eystein, it was interesting to see the 8.7 $/kg cash cost disclosure of that $12 fully loaded target they've been talking about. I wonder what this means for FBR outlook. If cash cost gain with FBR is just a couple of dollars compared to an optimally located Siemens plant wouldn't such Siemens plant be a better investment for poly plant? There's always a political risk that cost of electricity will go up with Siemens, but still lower capex, higher quality output for not much more cash cost at current electricity rates (in e.g. Xinjiang) seems like a good investment.

Anyway since DQ is already profitable with half volume and $3 cost above target it looks like sub $20 poly prices can be a reality on a sustainable basis, i.e. where poly makers can make decent net margin. This is very good news for the industry and the crystalline Si technology of it.

[eysteinh]

Agree with you on both accounts. Still I have not understood how DAQO is achieveing this cost levels. None of the explenation they give have given me any indication since hcl recycling is a well known method and the moving of the factories did indeed write down depreciation costs somewhat but it is not enough to explain it. I am happy for it but I do not understand it I must admit. so I remain sceptical. Also you might add that new siemens production in general is EG quality while current china based FBR and most fbr in general is SG quality so this another win for siemens if they can be quite comparable on costs.  If anyone can find out what reactors DAQO is currently using that would be great. Perhaps they are getting the new GTAT reactors (SDR 1000) and this could explain how they can get to 14$/kg total cost before opex.  But given the capex of 87$/kg I think it must be a local chinese producer. Perhaps one of them have made a better reactor than western counterparts? I did a big research report preperation but I did not have time to finish it and did not get to daqo but I remember seeing one of the chinese producers delivering reactors to them. Hope I can find that info again its buried somewhere on my hard drive heh. 

[eysteinh]

ASP in china for c-si multi keeps falling now at 0.58$/watt on solarzoom. My own limit is 0.56$/watt for c-si I will get worried as this would put my global asp lower than my conservative estimates. C-si mono is now at 0.71 $/watt so there is a big price gap now between the two. Interestingly also mono fell from 0.717 to 0.7 the first fall in 3 quarters. Anyhow I am very very glad to be in one of the companies that are very profitable at these price levels and not in one that would have been profitable if asp was 10 cents higher. 

On the positive side a lot of solar companies are very optimistic for the 2nd part of 2014. 

[eysteinh]

I do not like that chaori inflated its financials according to this article, something to keep in mind: http://translate.goo...V7XtIMTvnN5CMw 

[odyd]

UK solar farms to lose gov support

http://www.theguardi...pport-subsidies

[odyd]

Interesting moves in Taiwan, it appears that companies are getting consolidated around their strong suits.

http://www.digitimes...40513PD202.html

[odyd]

UK solar farms to lose gov support

http://www.theguardi...pport-subsidies

It is all about the speed of installations and running out of money and of course to protect the consumer. This seem to affect everything over 5MW and would start in April 2015

[odyd]

Jim Rogers is buying Chinese stocks
http://finance.yahoo...-112227696.html

[eysteinh]

Some good news on the pricing front. ASP in Germany for modules from China are up to 0.61 euro per watt now that is quite good pricing. (around 0.8$/watt or same as prices would be in us with tariff most likely)

 

http://www.photon.in...ument/85938.pdf

[sunnysky]

China being investigated over cheap solar panels

http://www.theage.co...513-387tv.html?

 

 

The Anti-Dumping Commission will examine the markets in Australia and China to determine whether the Chinese companies have been selling product at unprofitable export prices.

 

Wonder what outcome this will be. Most top exporters to Australia are profitable now and I think none is selling below cost.

[eysteinh]

Indeed interesting as volume of sales to australia started after gm profits where there. Oh and again we see how far we are ahead here on the forum as the australia tariff was discussed months ago.

[BIPV Investor]

I like the line "The investigation has been welcomed by the country's solar PV maker Tindo Solar." Really, there is one solar module maker in the country and they are considering tariffs? Seriously though, if they could find a way to kill the 25% of exports that are being shipped by no-name companies, that would be great. I'd imagine that these no-name companies are still technically dumping product.

 

[explo]

Agree with you on both accounts. Still I have not understood how DAQO is achieveing this cost levels. None of the explenation they give have given me any indication since hcl recycling is a well known method and the moving of the factories did indeed write down depreciation costs somewhat but it is not enough to explain it. I am happy for it but I do not understand it I must admit. so I remain sceptical. Also you might add that new siemens production in general is EG quality while current china based FBR and most fbr in general is SG quality so this another win for siemens if they can be quite comparable on costs.  If anyone can find out what reactors DAQO is currently using that would be great. Perhaps they are getting the new GTAT reactors (SDR 1000) and this could explain how they can get to 14$/kg total cost before opex.  But given the capex of 87$/kg I think it must be a local chinese producer. Perhaps one of them have made a better reactor than western counterparts? I did a big research report preperation but I did not have time to finish it and did not get to daqo but I remember seeing one of the chinese producers delivering reactors to them. Hope I can find that info again its buried somewhere on my hard drive heh. 

 

Eystein, you mean that you don't understand how they reached 8.7 $/kg cash cost? Would very low electricity cost (combined with the low mg-Si supply cost in China) achieve this with efficient reactors and fully implemented hydrochlorination process in a closed loop system?

 

That's on the cash cost. For the depreciation of 3.3 $/kg I think they might have done some accounting trick (write downs or assuming long depreciation time) on but if we translate that to a 10 year depreciation time it means 33 $/kg and I think that kind of capex level is achievable for expansion in China now (I think GCL and SOL are in that ball park too for new capacity). So the depreciation cost I think can be sustained if they expand the plant. It's the cash cost that impress me.

[eysteinh]

Yes I mean for the cash cost of 8.7$/kg unless they have found some better reactor. And yes even with hydroclorination and low cost mgs and an electricty cost.  It goes against cost model for recent reactor designs of siemens. But sure enough it could be true and that is why I am so interested in who makes the reactors for daqo currently.  If it is just plain GTAT SDR 450 reactors I am really puzzled how they got the cost so far down. Did they silvercoat the inner linings (thats a way to reduce electricity cost due to reflection of heat with silver) and what other steps did they take? It is not enough for such a cost the steps they describe imho. HCL recycling been around for ages, example renesola did try to implement that, LDK said they would implement that etc. 

Or to put it another way: How come DAQO have a lot lower cost than the competitors given reporting standard cost reduction measures as reason for the low cost. There must be more to the story. Are they getting some offer on MGS? Did they find a way to recycle other raw goods? Are they making the seed rods in house? I know they say preferential electricity costs but this alone for me does not explain it. I am really really curious where they will order the reactors for new capacity

 

For total cost anyone with an eye for accounting see they have done some creative ways of getting deprecation cost down. But thats fine if they do have a low cash cost. So again Daqo looks good but until I have a better explenation myself of how they are reducing the costs then I remain sceptical (probably wrongly at that but better sceptical one time too many than one time too few.)  If they are achieving these goals I can see them easily at 5x current market value in time. Its a great turn around story and I am happy for daqo owners. 

[eysteinh]

http://www.pv-tech.o..._fit_contracts 
 

Italy owners actually canceling FIT contracts because they get more profit by selling to market...Very good sign for growth going forward from europe when italy can have demand without any feed in tariff.