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  1. 5 points
    Having purchased CEDR since the start I have now acquired 2 full years of data. This makes trend analysis a meaningful and fun exercise. I did a trailing twelve months (TTM) trend analysis of CN9 that I'd like to share with the club (as always odyd, feel free to delete it if you think it is excessive exposure of data). Each month in the attached chart represents the sum of monthly exports the past 12 months. By using 12 month compounded exports the seasonality effect is eliminated from the trend lines and the trendlines should thus reflect pure competive strength trend on the global market. It's quite clear that the "investable" CN4 have had a strong trend in the global market share competition. It is also clear that financially stressed Suntech and China Sunergy lost a lot with their hands financially tied. Also significantly financially stressed Yingli with nose just above water (unlike Suntech and CSUN) lost their dominance. Slightly less stressed Renesola have had trouble growing their global presence after their huge success in 2012 and early 2013. Note that their relatively new global OEM manufacturing base might distort CEDR's reflection of their global shipments for recent months. HSOL always having mediocre product offering and marketing compared to leaders is a long-term lagger that grows slower. Despite having been around much longer as module brand than many others they achive less volume, especially considering that a lot of their exports lately are tolled QCELLs modules. Edit: I'm adding an index style chart, where they all start at 100 in June 2013. This illustrates the difference in growth rates more clearly. Solar9 in total grew global presence with 17% the past year. Biggest losers Suntech and CSUN lost 50% of their presence, while biggest winners Jinko and JA gained around 90% global presence. Edit2: I'm adding total shipment charts as well for the same period. The monthly data was based on estimates and interpolation of monthly domestic shipments from quarterly total shipments and monthly export data. Some definitions are needed. For total shipments only external products sales related shipments are included. Any shipments related to internal downstream projects, processing service for other brands or warranty replacements etc. are thus excluded. For exports this is not true. There all shipments are included, but in most cases internal downstream projects and processing service for other brands are likely more negligible than for domestic shipments (HSOL tolling QCELLs module and exporting them to high ASP markets and CSIQ global projects being the most significant exceptions). For 14Q2 the guided/guestimated total external module shipments was used. Note that Suntech could not be included in total shipments as there's no visibility there, but I kept them in export charts since although Suntech ADS is worthless Wuxi Suntech is still a panel market player, now in the hands of the new cowboy in town (Shunfeng). Module exports grew 17% for Solar9 in the period, but total external module shipments grew 40% for Solar8. This is partially explained by Suntech drag not being included in total shipments and domestic shipment growing fast than international (naturally as China market has grown faster than international market the past 2 years). Note also that the "domestic" sales part (diff between total and export shipments) actually would include international module manufacturing too. SOL and CSIQ should have the most significant impact from that. A couple of interesting conclusions are that several of those losing market share on the international scene have been able to exploit domestic demand to retain utilization levels despite that loss, but likely at the cost of lower margins. Yingli increasingly continue and CSUN, SOL and likely Suntech massively started to rely on domestic demand to keep their manufacturing lines busy, while HSOL are still skeptical about betting much on domestic market. Trina keep and CSIQ started to exploiting domestic demand peaks, while both being strong in international market between the domestic booms. Jinko maintain a strong and stable domestic presence while growing international presence. JA is reducing domestic presence and managing to more than offset that with fast growing international presence (applies to cells as well). Even though trend for CN4 leaders is not as strong for total shipments as for exports I still view this as a signal of the CN4 brand and financial strength. They gain in the most attractive markets that have tougher barriers, while the weak have to resort to the less attractive but more accessible domstestic market. Edit3: Attached charts updated for Q2 actuals and July CEDR. Edit4: Attached charts updated for August CEDR.
  2. 5 points
    For those who did not request via PM, e-mail from Ed Job, Also, Nomura note sent by Ed, both on Friday. Second e-mail with attachment from Nomura had this text: Robert, This is more interesting than the oil price.... because the oil price does not matter... oil cannot compete with solar. Regards, ed First e-mail Robert: Thank you for the article on Seeking Alpha. Many investors sent the link to me and some of our large investors actually agree with your analysis. Moving on to your questions: There is no real link between oil and demand for solar modules. Very few countries burn oil to produce electricity, and in my calculations, oil would have to drop below $20 for electricity produced from oil to be competitive with solar energy. In some geographies solar energy competes with natural gas prices. Oil may affect natural gas prices to a certain extent, but even then, natural gas prices need to drop over 50% from current levels, and stay at the new low levels for 20 years to compete with solar. I do not expect any impact from current oil price decline on the demand for solar energy in 2015 and beyond. I don’t know of any particular event or new news that may be causing weakness in solar stock prices in general. Some people seem to be focused on oil prices, some on ASPs, and some on currency fluctuations. Overtime fundamentals will prevail. We will provide more detail re: 200MW mentioned on the call as developments warrant. Typically we only consider a project for inclusion into our late stage pipeline once the land is secured, and we have a PPA with a credit worthy off taker, and in some emerging markets I would add, construction and project finance secured as well. Meanwhile we will focus on the 1.4GW of late stage pipeline that we have to deliver results in the quarters ahead. We will provide more guidance on or before our next call. Getting into a debate with negative analysts is not productive in my view. The best use of management time is to focus on the execution of our strategy. Talk is cheap, execution takes time. We believe solar adoption will accelerate in 2015 as more countries adopt solar, and Canadian Solar is well positioned in the industry. As developments warrant we will make disclosures to update the state of our business. Best regards, Ed Job Director, Investor Relations Canadian Solar Inc., 199 Lushan Road, Suzhou New District, Jiangsu, China 215129 Tel: +86 512 689 66525 Mobile: +86 130 7338 4046 NASDAQ: CSIQ Nomura India raises target 5x to 100GW by 2022 112814.pdf
  3. 5 points
    Things we need to learn from this GTAT fiasco is that: 1. balance sheet is important. it is important to stay in the business than talking about great future. 2. high short interest always raises a red flag. Many longs here think short interest is a good thing since it could fuel the the stock to the upside and could even cause short squeeze (yes I know VW short squeeze story but it's rare). To be honest, shorts do a lot of homework since they have limited to gain and unlimited to lose. Raising short interest is always a red flag and we need to think about what we have missed in our analysis. Feel sorry to GTAT longs but think about the positive side of the life and life is more than money and has to go on.
  4. 5 points
    This is probably the most detailed reporting on the imminent release of the new policy. http://solar.ofweek.com/2014-08/ART-260006-12003-28860729.html A quick summary: The National Energy Board had organized an on-site meeting on 8/4 in Jiaxing, Zhejiang, with participation by the heads of 36 provincial energy departments and executives of 29 energy enterprises, including the two major national grid companies. The reason to hold the meeting at Jiaxing is that it has solved many difficulties in DG and can provide a model for other places. Mr Wu, The director of National Energy Board, said a new DG policy will be announced, and if electricity sale of a DG project does not meet the projection, it can be transferred to receive the subsidy for ground stations. The new policy has gone through all review and sign off processes by different divisions of government and is waiting to be officially released. In order for the new policy to come out in time to finish 8 GW of installations in 2014, it is expected to be published in August. Main changes of the new DG policy: The scope of DG will be expanded to cover 20 MW or below projects built on waste land, abandoned hills, tidal beaches, ponds, and agricultural greenhouses. These projects will receive 1 YMB ground station subsidy. In addition (I think I missed this before), rooftop projects without enough portion of self electricity use can also enjoy the 1 YMB subsidy. Also by the end of June, Zhejiang province has 1.38 GW of DG projects on file, 673 MW are under construction, 145 MW connected to grid.
  5. 5 points
    I may be wrong, but I don't think any "de-listing" news, tariff news, or any other recent news really had anything to do with the solar sell-off the last few days...albeit the sell-off I'm sure was somewhat magnified by the media and short analyst types that used it to scare some weak retail hands out...but that's actually a good thing in the long run. The rest was just day-traders taking advantage of high volatility. Sometimes people overreact to sell-offs, and have to find a reason why...when really there is no real or good reason that's specific to the stocks or sector themselves. The lame stream media does this every day...if the market is up or down on any day, they will come up with a universal reason why. Sometimes their reasons really are stupid, but the still have to come up with their headlines. So if the de-listing theory or tariff theory is true, then why did FSLR and SPWR also go down quite a bit? The market was down big Friday, the DOW down over 300 pts. So why wouldn't we expect our low-float, low-market cap hi-beta solar stocks to not only go down, but to go down a lot more. You have to take the good volatility with the bad. Remember they can also go up 10% in a day on no real news. The end of the week was nothing more than short term technical trading and market forces imo...there is absolutely nothing that changed fundamentally (including the delisting "scare"), from the beginning of the week. The smart money knows this also. Does anyone think Nomura has changed their minds on CSIQ/TSL etc. over the last week?...of course not. So why would we, especially since we are very educated here as to what's really going on. We are in a great position to take advantage once again of the overall market's ignorance, stupidity and overreaction when it comes to solar stocks...but it does take some guts to buy when everyone else is selling. Compared to the old days, these latest moves and threats to our companies are just a walk in the park, and the certain analysts' attacks now just a whimper. Sooner or later it always comes back to the fundamentals. So just relax and be patient...solar is the fastest growing industry right now, and becoming more profitable every day. Nothing that's happened in the last few days is going to change that. I'm pretty sure the highs for the year haven't been seen yet... btw, when it used to get crazy like this, I would just pull out my CSIQ project spreadsheet, look at the hard numbers of revenue and profits on the horizon, and that would give me strength to see the short-term nonsense thru. That's why I stuck with CSIQ...their future was (and still is) much more visible than the rest. Smart money will also "overpay" for that visibility too. And that helps me sleep well at night, even during short-term chaos like this. So my advice; Relax, and if you can, take advantage of the short-term fluctuations of an irrational STEO market...
  6. 4 points
    Just read an article explaining the situation in Japan…some key facts: Total capacity on grid: 203.5 GW Capacity of utilities which have put limitation on PV grid-application: 51.8GW Capacity of utilities with no announcement so far: 119.1 Unknown status: 32.6GW (Chubu utility) Installation in H1/2014: ~4700 MW Residential: ~1200MW Commercial: ~1900MW Utility: ~1600MW So problem is more severe with small utilities and limited to rather only 1/3rd of grid. Also residential installation are not impacted by the limitations. Commercial installations are most hit due to short permitting period. Utility installations are not affected much as lots of project have approval and typically have long execution time. But ofcourse will have impact once currently approved projects get built. So based on this data, I will be surprised if annual installation fall off the cliff as expected by some people.
  7. 4 points
    They killed it my God http://investors.canadiansolar.com/mobile.view?c=196781&v=203&d=1&id=1988651
  8. 4 points
    Great replies all on my post…thanks Looking at what I wrote again, my original intent was just to comment on JMK’s observation that we are still just at the beginning stages imvho of this solar/renewable revolution, with huge upside potential…and then I started rambling on and going on a tangent as it’s sometimes hard to control my enthusiasm for CSIQ’s future. I know most here believe this to some extent about the solar future, but the day to day stuff sometimes makes us lose sight of this. Just wanted to remind everybody that there’s no need to get in and get out before it’s too late…and that $50 or $60 that seems like such a stretch to some people right now, could be peanuts in the future by comparison. Keep in mind the investment community is only now starting to embrace the sector. Although I always believed solar in general had an extremely “bright” future, it wasn’t really until CSIQ’s first really big win in the project business with TransCanada, with comments that much more was to come, that got me going because I finally had something solid I could bank on. The panel business at the time was a very tough way to make a living. I didn’t know who was good and who was bad, or who would even survive but I knew that I really liked their new business plan and the now visible revenues/profit streams that were to come, and also their Westernized approach. And with spreadsheet in hand (and yes, it’s so clear now from CSIQ that it’s become obsolete), I fought those crooked lying Tier-3 STEO analysts every step of the way! (btw, whatever became of the fantasy analyst? or my nemesis? or…nevermind…looks like Gordo is the only one left...inside joke for the old-timers here). Their overall execution of it to date has far exceeded my expectations…that’s why I keep holding. As far as my CSIQ buy and hold strategy being unique to CSIQ, as Odyd commented…maybe it is…at least to this extent (I said many times in the past that this was a once in a lifetime opportunity, and I still think it is…albeit to a somewhat lesser extent). There was also a lot of luck involved that I’m very thankful for. But if you find any company in any growing industry that has a solid, visible long term business plan that’s differentiated from the competition, and they continue to execute, then continue to hold. If they don’t…sell. Let the micro-second computers and day-traders fight it out day to day…I seem to always lose that battle eventually anyways. DD and investing is how you beat them. If they drop the price irrationally…don’t panic and sell…thank them for the opportunity and buy more! Stay strong until the long term business plan starts to falter (this can be due to both controllable internal and uncontrollable external factors)…as EPS is still king. Of course this approach does not guarantee success…but I do think it improves the odds for the small-fry. Sorry…looks like I’m rambling on again… Although I thought it would get there eventually…I was as surprised as anybody with that run...
  9. 4 points
    I recall I first did this on 3/26/2014 when we had the first severe correction following the highs in early March. Instead for it to get lost in the forum again, it's better to create a new thread to keep track of the performances of our stocks.I think it's useful to keep things in perspective and use it as tool for fine-tuning your portfolio. As of Sept 10th, 2014: Stock 2013 Close Close Today High Low YTD Since High Since Low Max Loss CSIQ 29.82 39.07 44.50 21.71 31.02% -12.20% 79.96% 51.21% JKS 29.30 33.50 37.98 22.37 14.33% -11.80% 49.75% 41.10% TSL 13.67 14.13 18.77 10.32 3.37% -24.72% 36.92% 45.02% JASO 9.17 10.13 13.14 8.49 10.47% -22.91% 19.31% 35.39% DQ 36.30 47.11 56.98 21.86 29.78% -17.32% 115.51% 61.64% HSOL 2.77 2.60 4.24 1.75 -6.14% -38.68% 48.57% 58.73% SOL 3.45 3.36 4.46 2.18 -2.61% -24.66% 54.13% 51.12% YGE 5.05 3.77 7.45 2.79 -25.35% -49.40% 35.13% 62.55% Some quick observations: Year to date, the CN5s all have positive returns with CSIQ and DQ as clear leaders. The CNR3s (rest 3) all have negative returns with YGE as the worst performer. The trend indicates the gap between leaders and laggards is widening. All CN5s plus SOL are within 25% of their respective highs, with JKS and CSIQ leading the charge. DQ is the runaway winner since reaching its low and CSIQ ranks at the second with the rest placing further behind. This is explained by the more severe correction both names had since reaching their highs and also by the strength with which they have snapped back. On the other end of the spectrum with less volatility, JASO remains a clear underachiever since the low but it also provides a hedge during the down turn while still maintaining an exposure to solar (explo's strategy). We all hope this is going to change soon. Personally, I think it'll be some time in Q4. As some sort of risk measure, "Max Loss" represents the loss incurred when someone happens to buy a stock at the high and sell at the low in panic. Based on this measure, JASO is the least risky (as expected but it's even less so based on more recent trading patterns) with YGE and DQ the most "dangerous".
  10. 4 points
    I'll just throw out that same old note of caution on CSIQ. On the module side, they're in the same boat as the rest of the China solars. They don't have the lowest costs, they don't have the highest quality, they don't have a critical brand advantage, and they're actually building (costly) new capacity. So there's no massive advantage here. On projects, they have no great advantage within China - JKS and TSL and other, non-module players do. In the US, they have no essential advantage over a SUNE (or others) given that these others can access cheaper capital. They're working to develop projects in Japan etc., but it's not at all clear that this is going to grow substantially. What they have is... the remaining Ontario project market. Yes, they were smart to seize it. Yes, they've done a good job with it. But does it put them in a fundamentally different position than the other China solars? I'm not so sure. (And I know the Ontario FIT program a bit - I used to work in the Ministry, was on the edge of the talks as it developed, was doing solar in Guelph 15 years before CSIQ arrived, etc.) But believe me, there will be no replication of those kinds of rates, EVER again. Ontario's Government almost fell over corruption around its gas plant purchases - and perceived overpayments for wind and solar have been a real issue. Those days are done. So what CSIQ has is an enormous vault, and within that, are a stock of very profitable Ontario projects. My advice is to ride them high now, and then - since they can be expected to have AT LEAST two more quarters like this - to either stay on the horse and try to ride it to a long-term high, or, to step off periodically to try and time some declines, and then ER-related run-ups and recoveries. But $40 is certainly within their grasp, and perhaps even $50. This comment is just to say that while CSIQ's Ontario projects have enabled it to appear as fundamentally decoupled from the other China solars, and while they obviously would LIKE to be, the depth of the difference is perhaps less than it might seem at the moment.
  11. 4 points
    Jinko Power Jinko Power is not a pure yieldco, it encompasses project development, financing, EPC, and O&M. It's more appropriate to think of it as a growth IPP. In the future, her relationship with the parent company is in module sales and support in other areas, rather than project development and transfer by the parent company. Model shipment to Jinko Power will not be included in sales and continue to be capitalized into plant assets. It won't affect revenue and profit of Jinko. The preparation for the Yieldco IPO is ongoing and a top focus point of the management for the second half. Both US and Hong Kong are possible locations for the IPO. There is no specific time table yet. There is no plan for share offering before the IPO. The current funding is sufficient to support the development of over 800 MW projects using leverage, that is, to reach 1 GB prior to the IPO. Capital raises through other means such CBs are not excluded. The 225 M capital raised will be used only for projects. Jinko will gradually develop projects overseas after the IPO. A lot of preliminary work has been carried out. DG Development The new DG policy will benefit Jinko greatly, especially on the downstream business. Module sales is also going to grow with the takeoff of the market. DG is the trend of future. Jinko currently has a 600 MW pipeline. The scale of signed contracts and MOUs is even greater. The development cost is right now about YMB 7 to 7.5 per watt including modules. Jinko has been rapidly growing her DG teams, including development, financing, and engineering. Some are being outsourced. Manufacturing Jinko will use the capital used for bidding Topoint for capacity expansion. By the end of Q3, wafer, cell, and module capacities will reach 2.3 GW, 1.8 GW, and 2.8 GW, respectively. Regarding to retainage, it's a convention of the past. There are not many new contracts nowadays with retainage. Jinko has a total of about $30 M retainage revenue, which is expected to be fully collected within one year and a half. H2 is expected to see $5-$8 M being paid back. Regarding to the US tariffs, Jinko plans to pay the 2012 tariffs for the time being, which come to a combined rate of 29.18%. Jinko does not rule out the possibility of opening cell factories in the future overseas, including in North America. Jinko confirmed that the cost including the tariff is $0.62 (or higher). But with modules selling at $0.74-75+, it's still at quite profitable levels. In fact, it's similar to what it used to be using Taiwanese cells. (So GM is about 17% or even higher.) http://xueqiu.com/talks/item/20122155 This post has been promoted to an article
  12. 4 points
    Well, I swung out of China solars and into US solar firms (SUNE and SPWR) earlier this year, and that worked out well. I then (largely) stayed out of buying more China solars until after the tariff decisions. I even managed to avoid any recent disasters during the ERs, except for selling my CSIQ options far too early (at just $31), thinking this was a brief bounce and not a sustained rise. Bad error by me. And right now, I am on the fence with Trina's ER. (I added some TSL short-term options to my LEAPs, and they've risen, but I remain undecided about whether to hold them all through ER.) Looking forward odyd, I see-saw between the 2 views you described. Frankly, much though I love these firms, their guidance only offers us relatively flat ground - in terms of likely profits and share price rises - for the coming 3 months. Quite simply, they haven't offered us any obvious guidance or clear reason to indicate that they are going to surge like CSIQ. HOWEVER. Then I consider 3 basic - non financial - facts. #1. The industry, overall, is still growing at a huge rate. This always offers opportunities for supply/demand to get out of joint, and tightness to appear, and for prices to rise in certain regions. #2. We're now essentially past tariffs. Reducing uncertainty alone eases decision-making, and should enable the management of our firms to turn to more important decisions. #3. And most importantly, the China Solars have not made their big/strategic announcements. Yet. However, we know they're all seriously considering their options on how to act, post-US tariffs. And EU. And India & Japan threats. JASO was very open about this, for instance. So, I think it makes sense that a number of the China solars will have reviewed their options, and ALREADY MADE THEIR DECISIONS, and some of them will have decided to do more than to simply take the hit and bear up under the tariff. Now, some of their decisions will have a strong PR angle (I hope), but remember that firms like SCTY and others do remarkably well with good PR! So. A few possible announcements in the coming months, which could greatly change the state of play for the China solars: 1- One of them is going to make the leap and announce a US plant. This, for simple PR reasons, strikes me as a done deal. Even a small plant would have a huge financial impact, however, as it would open the door to the kinds of opportunities a CSIQ has taken advantage of - e.g. in raising share prices and thus, making raising capital easier, winning projects, etc. Maybe JASO? They're thinking about it, we know that. Maybe JKS? We know they now have a war-chest after their Jinko Power partnership. Maybe TSL? I don't know. 2- At least 1, and likely 2-3 China solars are going to announce they are converting lines over to use the Merlin system from GTAT. GTAT has already announced they are at the stage of final customization with a number of "GigaWatt-scale" China players. And they have sold equipment in the past to all of YGE, TSL, JKS and JASO. The Merlin system, if installed, is claimed to reduce silver use, cut costs/watt, reduce panel weight, etc. The claim is a 10% reduction in module cost. We'll see. But GTAT is smart. Rather than try to sell them expensive capital equipment, instead it is shipping them the material for each panel, and thus, cutting capex. A Merlin installation would also be a major PR gain for any of these firms, as GTAT is a rising golden boy in US manufacturing, with its likely Apple partnership on the iPhone to be confirmed in September. - Project sale, and/or developments. e.g. As soon as a JASO announces its first major project sale, as long as they find a way to communicate their PIPELINE with some clarity (which they failed to do during the CC), they will begin to rise, and could position themselves as being, in part, a new CSIQ-style player, only based in Japan & China. TSL could also announce a sale, and it could have even better results, as they have a wider investor base. - Buy-outs/Mergers. These still seem to me to be screamingly obvious moves, simply so larger financial players can pick up smaller panel manufacturers who are also collecting projects. For example, CSIQ, JKS and JASO would all be possible, though CSIQ's share price surge may be let them escape. However. If JASO was sitting on 500 MWs of projects, with 200 MWs ready to sell, plus that balance sheet of theirs... and their expansion complete, using a lot of new gear and high efficiency lines, why wouldn't someone purchase them? That company could double in value just by hiring some good PR people, and presenting themselves in the style a CSIQ has come to use. This has perhaps a lower probability, but is still possible I think. - Better Incentives and Prices from China. It seems to me obvious that, to some degree, political decision-makers can shape the prices paid for panels in China's projects. Right now, the prices are too low,and it's hurting the solar firms. Government gets to set the targets, how high, with what timelines, with what incentives, and to lay down enormous direction to and through quasi-state bodies, municipalities, banks, etc. - Movement into large new markets like India. It wouldn't be surprising to see more China-India joint manufacturing project announcements, I suspect. And doing so could bring a participating company access to a huge market, state-driven projects, incentives, etc. In sum, though the companies themselves, in their guidance, haven't given us much reason to hope for a share price surge, I believe there are a number of news-led possibilities that could drive up share prices. And so, positioning around those possibilities seems to me something worth keeping in mind. Just as it was with SUNE and its YieldCo (which, BTW, sadly never made me rich... but a 30% gain is not to be sniffed at. And perhaps even makes me feel a bit better about screwing up my CSIQ holdings! Argh!)
  13. 4 points
    Just listened to the CC again. The valuation is based on equity valuation of finished 213MW by the end of last year ($100m Jinko's old equity + $85m premium) and future capital need for 600MW (or more) connected to grid this year. So for the 213MW already completed, they are getting a fair price, since they are getting about 40c per watt premium which should give them 20% GM on the project itself. They are not selling 45% of 813MW here since 600MW of them is not even completed. If there's no outside investor then Jinko needs to raise own capital to finish them first so there is no valuation on that part yet. Basically it's an agreement to develop projection together: Jinko brings on the table pipeline, 213MW completed at market price and their expertise to build projects, CDB brings ability to finance (possible lower financing cost) and Macquarie brings possible future pipeline or other financial assistance. New horizon might bring easier permitting due to its political connection. Of course Jinko can choose to give up less equity but it would slow down downstream expansion process and they might have problem getting projects financed once it's completed. Right now, cash amount in the Jinko power is about 100m+90m+225m=415m and this can support 1.15GW projects as Zhang mentioned in CC ($1.2/w) cost. So with outside capital, Jinko can get 632MW (1150*0.55) own share of plants quickly before IPO without actually contributing much additional capital. Introduction of three investors can also facilitate the IPO process IMHO. So the valuation now is really about cost of the projects not the market value of the projects. When the IPO really happens, these finished projects will be valued at market price and that's when the interesting things start. Considering they are keeping the projects instead of selling, I am thinking about $2.5 to $3 per watt EV for their projects. This will give them at least $1.6 per watt equity ($0.9/w debt financing) per watt which translate to $1.84B equity valuation of the whole company for 1.15GW completed. Jinko's own share should be about 1B which translate into more than $30 per share. All these projects are funded securely now and financing should be easy since CDB is on board now. That would price Jinko's manufacturing part for negative which should actually have $45-$60 value in my calculation. Further capital beyond IPO can be obtained by secondary to public or capital injection by Jinko and partners. If three partners want to maintain their 45% stake (or some lower numbers after IPO sale), they should contribute certain capital to maintain that paid in capital %. Now I am just hoping they won't quit after IPO since it's vital for Jinko to keep that financing and political connection edge. I think they might even get lower interest rate from CDB compared to other CN peers who are developing projects in China. If interest rate is 1% lower, that translate into 4%-5% GM improvement for their projects. So the deal itself is not good or bad if we don't look at what partners brings to the table. In that case Jinko is just finding somebody to fund future projects and share profit with them. It's the unique capabilities three partners bring makes this a great deal for Jinko. And to question why it's 45% equity not 20% or 25% equity sold to outside investor? Maybe that's the required size of pie to attract CDBI and Macquarie to the table and make them interested to work together with Jinko and to contribute to a company in which they have a reasonable share.
  14. 4 points
    Politicians are used to the concept of energy being a power, natural resource found in the land or sea belonging to a particular country. Owning energy is a national security matter. Oil and gas and coal and any other natural resource are vital to the country and should be controlled. Wars have been fought over this in last 200 years and continue to be fought today, covered in the veil of spreading democracy to people who do not care to be free. Energy grid is a military installation and nuclear plants are being protected by military in case of a terrorist attack not because of the harm on the population but impact on the grid and power supply. Solar energy is different as it can be captured anywhere. It is not a natural resource in the meaning of an exclusive location. It can be controlled by tools. You can harness a lot or a little, taking the scale to your own hands. You cannot run out of it, not in the feasible future. It is also quick to build and put out anywhere. It is a contradiction to the traditional view of energy source. People who run the world are C students with money; lacking progressive education. They own political agendas passed on them by the principal figure of their household or based on the knowledge they gained some 40 to 50 years ago. The training says solar is energy and, therefore, a national security measure. The only way to control it is by existence of a national supply chain. Not having manufacturing of solar in own country is a risk we cannot allowed. Thinly saw up scenario? Not in the eye of a politician. Combine above approach with all kinds of phobia on yellow perils, which led to the division of China in early 20th century, communism and loss of the leadership on the global arena by the US, and you have an explosion of national interest in solar, leading to tariffs. Then consider country of Japan, completely open to solar power installations. Japan is a country without natural resources. Japan fought wars over resources, starting with one in 1905 with Russia. Those wars were fought to control ports and access to China and to gain resources to grow national interest particularly with Second World War, explicitly being fought for energy: oil. After the war, both Japan and Germany became economic powerhouses dropping political agenda of controlling own interest by means of war. They did not do it by evolution, but were forced to it by the victors. What it came out from it was the conclusion by governing elite that many wrongs had happened from hands of our fathers, thus we need to come up with own agenda on the world and every complex issue in it. This is the reason, in my view, why understanding of the solar energy does not have same implications in Japan or Germany. People who govern in both countries do not feel the need to control means of solar power for national security reasons. In addition, Japan has a strong supply chain in the subject, which makes those matters ease. In the EU, there was no problem for it in Germany, but it was different for France, a country that was not forced to change own political agendas. India is brought up on a political stereotype of a strongman of the region and political description what that means for energy. Tariffs are a convenient way to block a competitor on India’s home turf. What it comes down to is a view of solar as an energy and who controls it.. The fear that China will impose a political will on how to distribute tools to harness solar energy is the main reason for keeping national supply chains alive. Even in a place like India, where it cannot survive in the current economy, those manufacturers are seen by politicians as must have. China, of course, has not helped. Instead of market driven elimination, China used vast mechanism of local, provincial and country wide support system for solar manufacturing, calling it one of the most important industries. If Chinese think this is important, why we should not think in the same fashion, is an apparent political behavior elsewhere. In my view, this is why Chinese companies must build globally. Opening this business to a global scene by China will take every politician's argument away. It will also eradicate social xenophobia of unemployed masses, blaming China for lost jobs. In the end, it is the right thing to do as the social aspect is critical to the health of the industry and each country. If industry can take out political agenda from its core, building factories abroad is a way to do it, we all win.
  15. 4 points
    Odyd, I'm curious what do you're referring to? I mentioned a couple weeks ago that this felt like a walk in the park compared to the old days...now it almost does feel like the old days. But the level of uncertainty about all companies futures were very clouded back then...for many reasons on many levels. Certainly not the case today. These major "corrections" can also be major opportunities...there's absolutely no reason fundamentally for this level of sell-off. So why panic like there is? I'm sorry, but I don't share all this anxiety about the solar world coming to an end. I don't trust WS one bit, so I don't participate in their game. I play my own game...that I know I have a chance to win in the end. Their game relies on emotion...and I see many here are pawns of that (and it's very hard not to be), and it usually costs them. I keep reading some of the traders' abuse of real investors here...I'm not "married" to CSIQ...if one finds a stock that continues to execute on it's long-term business plan...and has a bright future for many years looking out...then why on earth would I want to sell it if I didn't need the money right now? And this actually takes very little of my time now, and has very little stress. As soon as I see the business plan begin to truly falter (and not just based on "headline" news), then I'll re-consider my investment. But I recently spent several hours fine-tuning 2013 project revenues/profits based on YE info, and updating estimates that now goes out to 2017. And when I look at the bottom line, I am revitalized with confidence...just like I was during the beatings down below $3, when it was nothing but doom and gloom. And the same can be done right now for many of the other solars. So good luck to those very few traders that are actually good enough to make it in the long run...and consistently time the tops and bottoms...I'm certainly not one of them, and didn't like the ulcers that came with it. But I'm not sure I like the implications of someone's trading strategy being superior to someone who invests in a company's long-term performance, and doesn't want to participate in these dizzying WS trading head games. side note to Odyd; my "more reply options" does not work anymore...I keep getting a not authorized to be there page.
  16. 4 points
    My couple of cents here: 1. I don't look at 10 years cash flow. Solar industry is ever changing and any disruptive technology can give a new look to the industry. Who predicted <$20 poly price when poly was over $400 several years ago? Shorter term (2-3 years) is more visible for both individual stock and the industry and I am totally fine with that time horizon to invest. 2. Looking at 2-3 years from now, CSIQ is perfectly positioned by generating huge cash flow from projects every year from high ASP and high margin areas. After 2-3 years, CSIQ can use the capital it accumulated to upgrade/ expand capacity or venture into other emerging markets. What they will do beyond 3 years is just guessing but they would have much higher cash reserve/access to western capitals than peers and I trust management to put those capital in good use and generate good return for investors. 3. High ASP in subsidized area is not sustainable. But gross margin in higher barrier areas (North america, Japan) might be sustainable (15%-20%) for down stream business. With ASP dropping, capital needed to to develop projects drops as well. I have no doubt CSIQ will make up the ASP loss by higher volume in most profitable areas. In the end, the experience and branding enables CSIQ to capture profits in most high margin and low risk areas. It's not like JKS doesn't want to venture into Japan. They are just not able to do so right now so they have to remain in highly competitive chinese market for projects. 4. Even in chinese market, CSIQ would be in great shape with 3GW+ soft pipeline. They have great connections with western banks and that gives them cheaper access to capital for chinese projects. With local loan rate as high as 6%-7% and no long term loan available, this become a huge advantage to generate high IRR on domestic projects. Successful projects development and great pipeline would make it easy to set up yieldco for China's projects as well which would facilitate the projects developing in China further more. 5. CSIQ's strengths are in sales channels, branding and downstream projects. All these will help them to grow and survive any likely downturn in the solar industry. $1 invested in fixed asset you need to worry about possible oversupply in the future, but $1 invested in projects that has electricity off take agreement gives you high and predicted return. Good relationship with customers and branding will carry on disregarding the dynamic changes in the industry as well So in my opinion there are CN2(CSIQ, JKS)+1(TSL) to invest now. But if I have to park all my money on one stock, CSIQ is the obvious choice to me.
  17. 3 points
    Hopefully this is the answer you were looking for http://solarpvinvestor.com/spvi-news/960-factoring-fear-into-canadian-solar-valuation
  18. 3 points
    Plan One Introduce the concept of large scale DG plants, to take up 30%+ of the total DG target. These plants will be about 10-20MW each and mainly be located in the four provinces of Jiangsu, Zhejiang, Shandong, and Guangdong. The plants will enjoy the benchmark electricity FiT of 1 YMB per KWH. Plan Two FiT will remain at 0.42 YMB for self use but bump to the 1 YMB benchmark FiT when sent to the grid. There could be a limit of 30% or so of total production which can be sent to the grid to prevent possible abandoning of self-use to take advantage of the higher grid FiT. Aside from the state FiT, provinces and local districts have supplemental FiT incentives as well. The finalization of the plan will still take some time but it looks like something very positive will come out of this. It's being reported that companies are busy hiring necessary talents to be prepared to get into action quickly once the new policy is set. http://guangfu.bjx.com.cn/news/20140403/501382.shtml
  19. 3 points
    I thought the table summarizing the year-to-date actions could be a bit useful: Stock 12/31/2013 High Low 3/26/2014 Year to date Since low Since high CSIQ 29.82 44.5 29.82 31.09 4.26% 4.26% -30.13% JKS 29.3 37.98 25.45 26.74 -8.74% 5.07% -29.59% TSL 13.67 18.77 13.1 13.1 -4.17% 0.00% -30.21% JASO 9.17 13.14 8.35 9.62 4.91% 15.21% -26.79% HSOL 2.77 4.24 2.41 2.92 5.42% 21.16% -31.13% SOL 3.45 4.46 3.04 3.37 -2.32% 10.86% -24.44% YGE 5.05 7.45 4.25 4.25 -15.84% 0.00% -42.95% DQ 36.3 56.98 33.71 40.69 12.09% 20.71% -28.59% From the highs, they all have lost about 30%, with YGE a bit worse. For the year so far, YGE is the worst performer. Among the CN5, HSOL and JASO, the two laggards have the largest year-to-date gains, whatever are left that is. From the lows, the two laggards are the best performing. On the other hand, JKS and TSL have given back all gains this year and then some. From the valuation and fundamental perspectives, these two might be the names one could consider to add to their holdings.
  20. 3 points
    What is appealing to me that capacity, which is easy to obtain for most, now becomes strictly a revenue and EPS maker. Assuming that gross margin is quite equalized, with the notion that CSIQ has leadership in solar plant sales, and JKS has GM leadership, capacity is intensely critical for couple of players. Many associate capacity as a point of past failures, this time around it should be embraced as it is critical in many ways. Scale and especially a scale for JKS, HSOL and JASO, is an opportunity to make more money with almost unchecked potential, when capacity is added. I think for JKS, in addition to size, global market expansion makes a lot sense. JKS moving to levels of TSL-like ASP makes her the greatest money maker among Chinese. HSOL expansion is no longer a question of demand; it becomes a matter of balancing its costs with objective of profitability. If there were no expansion, HSOL would have a slim to none chances for profit. Here, you need to know if the volume of sales is increasing. If it is not, then expansion plans are not in full swing to give you profit and market acceptance. JA benefits not only from scale of capacity expansion but also from the move to greater module to cell ratio. Here again, one needs to take a catalyst of growth and capacity kicking in on module sales. Without it, the company can be stressed by the markets. TSL and CSIQ are expanding, but CSIQ has no obligation to grow to generate profitability. CSIQ simply transitioning its module' park into solar plants for sale makes it work. This will offer little risk of being caught in any type of downturn, and they are the wisest in their plans already. Global focus is also a declaration of prudence and immense benefit to them. CSIQ is a vault with the timer, and the timer is being adjusted now and then for a vault to open, but money is protected in. On the other hand, TSL is still in the exploration level of solar plants, the expansion seem to cost a lot compared to others. Sounds like JA growth is the cheapest there is. I think that TSL wants to up the efficiency game and going into IBC cell structure. Today, TSL carries the highest probability of being fairly valued in terms what is the company doing and planning to pull out of it. Out of all mentioned, TSL has the highest module sales, it is clear that moving into selling solar plants is priority consideration to improve net income generation mechanism. Higher ASP (which seem difficult as a premium), due to efficiency can be obtained, but we need to see mass produce IBC modules to hit the market first. Naturally SOL and YGE are circumstances where expansion has negative cost factor. YGE sales most modules as is and cannot break even. SOL does not have money to expand, so outsourcing is best second choice. Both, as explo pointed out, struggle to hold to the edge and continue to inch down every quarter. Between two, SOL has the surprise factor, including expansion to other business sectors. If you have to leave solar strategy behind and explore other design, perhaps it is a crisis of identity or failure of delivery internally, but for me as an investor, excitement of new, is married to “unknown” outcome. This is why I avoid both. I will watch with keen interest into SOL, more out of curiosity, than with investing ideas in mind.
  21. 3 points
    Just finished listening to the CC and here are the some notes I took (correct me if there's any mistakes in the notes): 1. 2.6GW module capacity now and will be 3GW module capacity by 2014 Q2. Module capacity expansion will be in China. They are planning to expand cell capacity as well (probably Funing) with 60MW first line and 300MW for the whole phase. 2. For projects they want to hold will be mainly in China. So they will have close to 300MW holding projects in China by the end of this year. 3. If you add top range of module shipment (2.7GW) and holding projects (250MW) together, that's about their 3GW capacity output which is a very good number. 4. Module GM is about 15% which is up from 13% in Q3. I would say in pure module manufacturing field, JKS is clearly tier 1 and the only player there (20%+). CSIQ, TSL and YGE are the tier 1.5 with margin ranging from 15% to 17%. Considering how much lighter asset CSIQ has, it is amazing they can still compete with TSL and YGE on module margins. Their in house cost is about 50c (just behind JKS) and Taiwan cell adds cost on top of it. 5. For Japan's project, they are expecting at least GM similar as canadian projects and they are saying this is conservative. EPC cost is about $2 to $2.5 which is lower than my original estimates. They are also talking to some potential buyers for the projects they are going to complete this year. 6. Project financing wise, 25% own capital and 75% loan is usual financing structure here. 7. They are also looking at downstream opportunity in Europe and other markets. Overall I would say good guidance but stock performance gets hurt by the timing of the projects. I am going to hold my core positions for at least another 2-3 earnings since the ER shows they are on the right track doing what they are supposed to do.
  22. 3 points
    Mildly related to news and a lighter note -- just completed first five days with the 50 new panels, 250w CSIQ with Enphase microinveters. Monday, made 27 kWh (turned on at noon), Tuesday 40, Wed 39, Thurs 39, and Friday 29 (a cloudy day). Enphase has a pretty nifty app and site with real time tracking of system and info on carbon savings -- number of houses powered for a day, trees offset, etc. Should make more and more going forward as days get longer and forecast her in AZ is sunny. Currently running no heat or AC. My older panels -- 44 Kyocera 215's are monitored separately on a string inverter - no app, need to look at the box itself. Latest pushback on proposed office system is from fire marshall-- concerned about roof access with the steel beam suspended panels spanning the roof. They asked me to install a sprinkler system, which I already have. I've been surprised at all the hurdles on the office system by City of Scottsdale. It is a small building and the system is 21 305w SOL panels, so I really want to get it approved as it may cover the power needs completely. * I know these updates from the field are not technically news, but hope the info from one solar owner's experiences, esp here in AZ, can be pertinent on some level. I have seen some interesting things that related to my investing: - The net metering debate played out here in a big way. - The opinion of the mainstream solar co's who would not even consider Chinese equipment 18 months ago has gradually changed, little by little, to the point of actually recommending them. - Watching the balance shift as heavy incentives have dried up -- my initial system was 50% pre-paid, the current ones far less, but the panels are much cheaper and more efficient so it is basically a wash. - Watching the bills go lower as the rates go higher and having a real example of total system payoff vs system degradation. - In the case of the office, the approval process, and how I hope to see that change to become more flexible -- ie, I'd like to see them say, "Hey, you want to pay for a solar power plant, then let's work together to make that happen." Instead, it is, "Well, gosh, we don't like this or this or this..." Anyway, let me know if this blather is boring and I'll leave it out or find a better thread for it.
  23. 3 points
    http://finance.sina.com.cn/roll/20140118/002417995351.shtml There are some interviews or comments by several CN11 management in this article. Some key takeaways: 1. Domestic banks were hesitating lending solar companies money back in Q2 2013 but the situation has been improved since then. 2. CSIQ is targeting to remain at least 1GW late stage pipeline through 2014. So they would add similar or more late stage pipeline than they would install (consume) in 2014. 3. YGE is targeting to return to profitability in 2014. 4. GCL will increase wafer capacity to 10GW in 2014. Happy weekend everyone! Hope we will see some Q4 earnings pre-release from big players very soon.
  24. 3 points
    Looking back at the year gone by I’ve much to be thankful for That includes my money I have much more than before I put my faith in Qu and Potter and their differential Business Plan Ignored the STEO noise When fighting with the Clan It was tough, I will admit To hold down thru the lows But the “spreadsheet” kept me long and strong As I watched it grow I sent an email to Ed Jobs During my hour of need He reassured me, it will come And he was right indeed From SuperSOL to just plain SOL And Poly to the Moon Tariff Wars and many Closed Doors It seemed all Doom and Gloom I heard it all, every day Why CSI would fail Now I tip my glass, (thanks sc) Patience did prevail Thank you all, who saw it too And stuck thru Thick and Thin It really helped me to stay strong When it looked like we’d never win I’m happy for your new found wealth And the security it does bring Sometimes investing does pay off Instead of the STEO trading thing For all the rest, I wish you well Sincere Thanks to many here All the knowledge selflessly shared A site the bashers feared From the Fantasy Analyst who doubted Qu To Pitchel’s half-truth lies And Gordo’s pleas on national TV It was fun to watch them cry…. More to come in 2014 and beyond. This is just the beginning of a multi-year run imho for the leading solars as global demand continues to rapidly grow due to; grid parity being breached, environmental awareness for renewables as the earth continues to warm with devastating storms and weather patterns, as clouds of smog close down cities, as billions with no access to power will now have access anywhere to clean power, and as the lies of special interest groups are being replaced by fact resulting in huge public support. The upside for the next decade or so is huge…. Happy New Year All! nano
  25. 3 points