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Klothilde

Solar Investor
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Klothilde last won the day on October 10

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About Klothilde

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    FSLR 100%

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  1. Klothilde

    Daqo (DQ)

    I agree that polysilicon and 3rd party components have dropped massively in price but I doubt their in-house non-poly cost has dropped much. Most of the materials employed (silver, eva, aluminum, glass) are global commodities with prices that are not affected by the PV market. The way I see it the 531 disruption made module prices drop below their current in-house cost (e.g. negative GM). For the OEM side the disruption initially was favorable since cells dropped earlier than modules, thereby widening the price spread and allowing for a larger OEM margin. Since then the spread has narrowed again to unattractive levels (and is still contracting further) as you must have noticed. In summary no meat left on the bone for JKS, neither in-house nor on OEM. They are rapidly approaching 0 GM which is horrible when you have to pay over $100M in OPEX and NI per quarter.
  2. Klothilde

    Daqo (DQ)

    As long as there's more meat on the bone for FSLR than for the CNs FSLR is in good shape in the long run imho. Take Junkosolar's cost structure as benchmark. How much meat on the bone is there for JKS right now and in two years? Take Q2 total blended cost of $0.323 as starting point mmmmmwwwwahahahahahahaha (halloween laugh).
  3. Klothilde

    Daqo (DQ)

    The way I see it PVinsights and the other two index sites use different splits to report poly prices. Energytrend and PVInfolink both report prices for each multi-grade and mono-grade polysilicon. PVInsights, on the other hand, splits their reporting into 9N/9N+ and a 6N-8N purity categories. My understanding is that these different splits are not equivalent and comparable. As denoted in the footnotes of PVInsights 6N-8N purity polysilicon is not pure enough for PV purposes and needs to be blended with more pure silicon in order to be used. So I assume the 9N/9N+ category describes a combined pricing range for both mono- and multi-grade polysilicon with the high end ($12.5) reflecting the highest mono-grade poly quotes and the low-end ($9) reflecting the lowest multi-grade quotes. I think the current price level is lethal (i.e. deadly) for every single CN PV manufacturer out there (including Longi) and that we're going to start seeing a lot of blood and casualties in the CN industry over the next quarters as the companies run out of cash and there's nobody to bail them out this time. FSLR is in an enviable position during this massacre as it has 1) big cash reserves and 2) can sell at much higher prices than their CN peers thanks to the trumponian tariffs. Think of FSLR and their CN peers being abandoned on a remote Siberian island with FSLR wearing a huge fur coat and the CNs all wearing bikinis. Who will survive the longest?
  4. Klothilde

    Daqo (DQ)

    Mono-grade polysilicon dropping to 85 RMB/kg this week both on energytrend and on PVInfolink you guys. That's $10.6/kg after taking out the VAT. Something is odd with the market you guys. Q4 was supposed to bring some strength but the market seems broken somehow.
  5. Klothilde

    Daqo (DQ)

    You are right, they will probably exceed nameplate capacity. My calcs were just "back of the envelop" to highlight the high sensitivity to different ASPs. As a word of caution I used $10/kg just as an example and not as a forecast. I see tremendous risk of the ASP eroding below $10. The new capacities coming online in low-cost locations in China coupled with the fast reduction in poly consumption per watt (due to DWS adoption and mono migration) will result in an oversupply of biblical proportions imho. DQ being a low-cost producer is attractive to look at, however I would really hang on and see where the re-adjustment of the industry is taking us before considering an entry. jmho.
  6. Klothilde

    Daqo (DQ)

    At 7500 MT per quarter, $7.5/kg cost and $10/kg ASP they get a quarterly EPS of $0.5 at the most. At $15/kg ASP the quarterly EPS goes up to nearly $3. As you can see it all depends on the ASP.
  7. Klothilde

    Daqo (DQ)

    China polysilicon makers start production at new plants https://www.digitimes.com/news/a20181012PD212.html "...Some China-based polysilicon makers have started production at new plants established in regions offering lower production costs, which is expected to send product pricing further declining amid weak demand, according to industry sources..." This is what I've been talking about. Hope everyone is out by now.
  8. Klothilde

    Daqo (DQ)

    Thank you for your more optimistic view. I did notice the high-end of poly prices holding up well on PVInsights and this piece of data bodes well for DQ and its ASP. However I cannot ignore the price trends for mono-grade polysilicon on the other two index sites (energytrend and PVInfolink) that have shown a clear erosion from around 95 RMB to currently 87-89 RMB/kg over the last two months, roughly since DQ's last con call. It was on that call that Daqo said that they expected mono-grade poly to go up from 95-96 RMB at the time of the con call to 105 RMB/kg by year end. Anyhows, there is still some market action left from here until years end. GCL and Tongwei polysilicon is expected to hit the market starting this month but on the other hand demand was forecasted to increase in China big time as well. Let's see what happens.
  9. Klothilde

    Daqo (DQ)

    Hardly any discussion on Daqo here, which is sad. Here's another good article on the industry re-adjustment (me likes the term) that is going on. By year-end 60% of China's production capacity will come from the low-cost locations Xinjiang and Inner Mongolia, which is a humongous structural shift in the industry. The article says this is good news for downstream manufacturers since poly will only get cheaper: http://guangfu.bjx.com.cn/news/20181010/932944.shtml To me it looks like Daqo was myopic or deceitful when they suggested a scarcity of low-cost poly going forward. They also said poly was going to increase in price until year-end and it looks like the opposite is true, poly keeps dropping week by week (check out the carnage this week). Could we now please have a bullish voice on DQ to balance the picture?
  10. Klothilde

    Solar News

    Horrible market picture by energytrend. 86GW demand in 2018 but 150GW of supply. https://www.pv-magazine.com/2018/10/09/module-prices-have-decreased-by-up-to-25-so-far-this-year-trendforce-says/
  11. Klothilde

    Solar News

    A cheesy article on current GCL-poly operations. Everybody happy working hard for their motherland. No word on current losses. They do confirm 120000 tons of poly capacity by year-end however. http://m.solarzoom.com/index.php/article/115259
  12. Klothilde

    Solar News

    Taiwanese PV Industry collapsing: https://www.digitimes.com/news/a20181005PD201.html Is it right to feel happy about this? Less competition for the CN4 and FSLR. But still there is lotsa people and families affected.
  13. Klothilde

    Canadian Solar (CSIQ)

    Japan considering canceling FITs on unrealized projects: http://www.asahi.com/ajw/articles/AJ201810040048.html "...The Ministry of Economy, Trade and Industry will consider revoking certification given to solar power generation facilities that received it soon after the FIT system started but have yet to begin operations..." This could hit CSIQ hard since a large chunk of the company's value stems from the Japanese pipeline.
  14. Klothilde

    Solar News

    China strict control takes heavy toll on PV firms, says Tongwei chairman https://www.digitimes.com/news/a20181001PD211.html
  15. Klothilde

    Daqo (DQ)

    What earnings if I may ask? Q3 will obviously be a loss and Q4 will already feel the heat of the new Tongwei and GCL capacities being dumped on the market. From there on there's a long and painful period of industry re-adjustment to quote SC solar. Hope everybody here managed to get out in time.
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