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Klothilde

Solar Investor
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Everything posted by Klothilde

  1. I think it is new because everybody was counting on subsidies for new bidding projects in 2020 and apparently those are not included anymore. As to the 40GW suggested by Jinko I understand from their comments that those refer to the new projects in 2020 and exclude the delayed projects from 2019: Maheep Mandloi Got it. I had a quick follow-up on the 40 gigawatt China demand on 2020. Does that include the 2019 projects being delayed into the first half of next year, or …? Charlie Cao It's brand new -- its brand new in the 2020 projects.
  2. GCL's sale of its power plant unit falling through: https://www.pv-magazine.com/2019/11/20/china-walks-away-from-state-bail-out-of-gcl-solar-project-business/ My oh my time to light a candle for CSIQ I would say.
  3. Oh my nobody noticed this one yet. Thanks god the market is shrugging it off: China to cut subsidies for renewable power by 30 per cent to US$807 million in 2020 https://www.scmp.com/news/china/society/article/3038591/china-cut-subsidies-renewable-power-30-cent-us807-million-2020 The way I read it there won't be any subsidies any more for power plants, i.e. the bidding projects are history. Only distributed generation and poverty alleviation will be maintained. That should be in the order of 15-25GW and not the 40GW suggested by JKS imho. But we'll find out plenty more tomorrow on guanfu and solarzoom for sure.
  4. Bye pal, I'm not dealing with trolls anymore. Good luck with your trades.
  5. Good calcs. I personally don't think that they will be able to reap 20-25% GM internally and reduce in-house costs 15% yoy so my results wouldn't be as rosy. You've been referring to the 20 cts in-house cost of CSIQ repeatedly. What's your source? Cuz the indication in the 20F is clearly 3rd party purchase cost: "...Our solar module manufacturing costs in China, including purchased polysilicon, wafers and cells, decreased from $0.33 per watt in December 2016, to $0.32 per watt in December 2017 and to $0.20 per watt in December 2018...."
  6. JKS should see declining margins in 2020 just like CSIQ. That's just the result of the latest price drop for mono-PERC modules from around 26-27 cts in Q3 to 23-24 cts in Q4 with upstream components staying mostly flat. In Q3 they were running OPEX&INT to the tune of 14.0% of revenue. That's with an ASP of around 30 cts. As soon as that ASP drops to 24 cts their OPEX&INT threshold jumps to 17.5% or just slightly below what their ex CVD/AD GM is right now. Put declining GM in H1 together with a rising OPEX/INT threshold and you get a significant drop in earnings. Jmho.
  7. Again, you are misrepresenting my statements, I said clearly that I expected margins to improve in Q3-Q4 and then decrease into the new year. With JKS I was right up til now as margins improve in Q4 and we don't know about 2020 yet. With CSIQ I was right about margins decreasing in 2020, however they did not see a margin increase in Q4 as their margins started deteriorating earlier than I anticipated. So please stop trashing people here with falsehoods.
  8. Please stop trashing me with falsehoods. You know perfectly well that I forecasted higher margins in Q4. https://solarpvinvestor.com/topic/8-solar-news/page/708/?tab=comments#comment-100327
  9. So they say module revenue in Q3 is 96-97% of total, that would be $1009M. For 3326MW of module shipments that gives an ASP of $0.303. Applying the ex-CVD/AD GM of 18.5% that gives a cpw of $0.247/W. Are we all ok with these numbers?
  10. Lowering shipment guidance to 14.0-14.2GW.
  11. Good Gracious I see we still have some work ahead to find common ground. In fact when I threw in the 5 cts for cell processing and 9 cts for module processing I was rather thinking of likely current costs. If you want to see a cost progression I can go back to June 2018 and add a penny for a combined 15 cts processing cost, that would decrease the margin from 28.4% to 25.6%. So what. The point I wanted to make is that profit has been sucked out of the value chain big time since then and that is still the case even with your numbers. I'd warn about taking Qu's 15% yearly cost drop indication at face value. I think this is something nearer to wishful thinking. For example as per 20-F their CN cost decreased from 33 cts in 2016 to 32 cts in 2017, that would be a 3% drop and not a 15% one. By the way, what is your honest estimate for CSIQ's current mono-PERC processing costs? I would be surprised if you really saw a combined 12 cts for cell&module. Anyhows, let's see if we can at least agree on following formulation for the communiqué: "CSIQ's module prices are falling faster than their cost. That's why the company is guiding shrinking margins in Q4 and also in 2020."
  12. I think we can understand why CSIQ margins are heading down if we look at how prices and spreads have changed since June 2018. Here is the PVIL table for beginning of June 2018: http://guangfu.bjx.com.cn/news/20180607/903981.shtml Mono wafers back then were selling for $0.570/piece. That's $0.570*60/300W = $0.114/W based on a 300W mono-PERC module A 300W mono-PERC module back then was selling for $0.355/W Thus if CSIQ bought a wafer for $0.114/W, processed it into a cell for $0.05 and then into a module for $0.09 the total cost of the mono-PERC module was $0.254 Selling the module for $0.355/W thus yielded a margin of 28.4%. Fast forward to today with the following PVIL table: http://guangfu.bjx.com.cn/news/20191114/1020696.shtml Now mono wafers are selling for $0.391/piece. That's $0.391*60/315W = $0.074/W based on a 315W mono-PERC module A 315W mono-PERC module now is selling for $0.239/W Thus if CSIQ buys a wafer for $0.074/W, processes it into a cell for $0.05 and then into a module for $0.09 the total cost of the mono-PERC module is $0.214 Selling the module for $0.239/W thus yields a margin of 10.5%. I hope the above paints a clearer picture of how profit margins have been squeezed out of the PV value chain since June of last year. First mono wafers fell in price (2018) followed by mono-PERC cells (Q3 2019) and now mono-PERC modules (Q4 2019). Since the price drop of mono-PERC modules is fairly recent we will still need a few months until we see the new spot economics make their way into the quarterly figures of CSIQ. I know you will respond by attacking FSLR but I hope nevertheless the above is clear enough to spark some kind of thinking on your side. P.D. Here's one iconic article from September on the emergence of PERC oversupply. Concludes that the era of high profitability for PERC cells has come to an end: https://www.pv-magazine.com/2019/09/24/perc-cells-from-shortage-to-surplus/
  13. Jinko reporting tomorrow you guys. I will try and come up with a Q3 estimate later today when I'm done with the kids. Was wondering if anyone of you has a hunch regarding their shipment guidance and outlook. I stumbled across a few data points that make the current shipment guidance appear quite ambitious to me. Let me explain. If you add Q1 and Q2 shipments to the midpoint of Q3 shipment guidance you get 9773MW. That leaves 4.2GW-5.2GW of shipments for Q4 based on their FY shipment guidance of 14-15GW. Now according to a recent guangfu article Jinko had 700MW of exports in October: http://guangfu.bjx.com.cn/news/20191114/1020689.shtml This is slightly down from the 770MW of August and also down from the H1 monthly average of approx 855MW (34.2GW*15%/6): https://en.pvinfolink.com/post-view.php?ID=239 The above is one early datapoint suggesting JKS' Q4 module exports may not be above the Q1-Q3 export rate. In parallel we have China installations figures showing only 1.5GW of installations for October: http://guangfu.bjx.com.cn/news/20191115/1021256.shtml Now if you go back to the implied shipment guidance for Q4 of 4.2-5.2GW you'll notice that it is roughly 1-2 GW above the average quarterly shipment figures of Q1-Q3. If we assume that international shipments in Q4 will stay flat relative to Q1-Q3 then the shipment surge has to come from China shipments (in fact they guided strong China shipments in H2). However if we project the October China installations of 1.5GW for the whole quarter we end up with only 4.5GW of total installations in Q4 and the guided surge in JKS shipments of 1-2GW in Q4 would represent 22-44% of the market which imho is too much of a market share to be realistic. I know the above is based on data from only one month out of three but it surely is enough to give me an initial vibe that they may struggle to hit their shipment guidance. Any other vibes out there you guys?
  14. I think fundamentals for CSIQ now are significantly worse than they were in June 2018. Module prices have come down faster than costs, that's why they are guiding lower margins for Q4 and even lower going into 2020.
  15. Looks like I was right on FSLR heading down bankruptcy lane. They started with the first round of layoffs. Hate to say "I told you so" but you guys just wouldn't listen to me. https://www.bizjournals.com/phoenix/news/2019/11/13/first-solar-lays-off-valley-employees-after.html
  16. They have big qoq cash swings because of the project nature of the business, specifically in Q3 they spent a lot of cash on the build out of the SCE projects which they plan to get paid for in Q4. End of year net cash guidance is 1.7-1.9BN: https://s2.q4cdn.com/646275317/files/doc_financials/2019/q3/Q3-2019-Earnings-Call-Presentation-FINAL.pdf But I figure you know all that already 😉 1800M + 350M (2020 earnings) + 250M depreciation = 2400M = $23/share A fair valuation at the end of 2020 imho would require adding the above net cash to whatever valuation you assume from earnings. You may deduct some to account for capex but you would have to raise your valuation of operations by at least the same amount assuming they only expand capacity at positive NPV. Also whatever is left of project assets end of 2020 needs to be added assuming this monetizes 1:1 as cash at 0 margin. As you can see it's not as simple as coming up with an EPS figure and slapping a PE of X on it. This is also the reason why FSLR has been trading at relatively high valuations relative to peers, the market values the net cash on balance sheet.
  17. They will have around $23/share in net cash at the end of 2020 with your numbers. How do we account for that. Or is the company worth only its net cash balance and the rest (technology/ops) is worthless?
  18. OK so for CSIQ you see $2-$4 in EPS next year. What do you see for FSLR with and without bifacial tariff? Greatly appreciated.
  19. My script doesn't apply here because in our CSIQ discussion I was estimating likely numbers for 2020 based on my experience of the industry and what I know of the company and current market condition. Based on that I see margins of 15% or below for their module business in 2020. Your script on the other hand is a purely fictional "what if" exercise to show where GP would fall if FSLR's ASP was 24 cts next year. Fun but fictional. Don't really know what you want to accomplish with that. FSLR would be in serious trouble in this fictional scenario. That's a no brainer and an old hat. It may scare people who know nothing about FSLR and who are not able to realize that an ASP of 24 cts in 2020 is fictional. FSLR will have to compete without tariffs at global market prices one day, but that will be at a different efficiency and cost point relative to where they are right now. I value your opinion a lot, but if you want to pick my brain and influence my opinion you have to go beyond fuzzy fiction and get quantitative. A key question you could help address would be the likely impact of reinstating the bifacial exception on the 2020 / 21 EPS of the company taking into account all moving parts, i.e. a.o. how fast the necessary cell lines in southeast asia will be ramped, how fast shipments to the U.S. will ramp, by when a critical volume of XGW of shipments will be reached to impact pricing significantly, what fraction of customers are likely to renegotiate, what fraction of contracts will be rescinded with penalty payments, how fast production cost will fall to counteract some of the possible ASP decline, etc. etc. I personally think it will take many quarters for the string of prerequisites to materialize to have a significant impact on EPS. For starters current cell capacities in SE asia are very limited and players will be hesitant to invest their scarce money to add new lines and adjust the current lines given the volatility of the tariff decisions.
  20. You guys just don't like it when I smell a rat in some of the companies you invest in. So you post cheap and trashy articles hoping to attack First. Do you think it's working?
  21. They are selling at least two of those plants pre-NTP at low prices tied with an EPC contract. Thus they will earn only a small part of the revenue now and most of it during and after construction. Take the revenue guidance for Q4 and factor out modules, kits, EPC, the U.S. project, and you'll see there's little space left for this deal, my take is less than $75M in revenue in Q4.
  22. Yes but I'm saying you need $390M in additional gross profit (not revenue) to hit $3 in EPS.
  23. 12GW at $0.21 and 17.5% GM will give you $441 in GP. In order to pay for say $600M in OPEX&INT and deliver $3 in EPS you'd need to come up with $390M of additional GP from systems. Looks challenging to me. Please show me the illuminated path to $3.
  24. Cost reductions don't matter unless your ASPs are tied up in the long run. Since we're in the midst of an epic glut any cost savings are passed on to the final customer (module buyer) almost instantly and don't go into margin increases. They had great margins because over the last quarters upstream components collapsed in price while their module ASP didn't fall so fast because they were partly insulated through legacy contract prices (3-6 months old prices). Now with components nearing a price bottom and module ASPs aligning with the spot prices over the next quarters margins are set to shrink. They've guided shrinking margins in Q4 and then shrinking again in 2020 so that's becoming a fact. Question is where we will land.
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