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dydo

Hanwha Q CELLS (HQCL)

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dydo    1,391

Thanks for the feedback. For now I updated with ASP and a note about the cost spread.

ASP for Trina and Yingli is not accurate. TSL 0.67 and Yingli 0.62

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Guest Klothilde   
Guest Klothilde

ult to adjust selling expenses for increased freight and commissions and I'm already estimating depreciation. Maybe if we use guided 2H utilization (derived from Q1 and FY shipment guidance) instead of full utilization we don't need to assume any ASP sacrifiction and it will reflect actual state of 2013 business for the company?

Don't forget 1.5 - 2.0 Cent Warranty

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explo    669
Don't forget 1.5 - 2.0 Cent Warranty
Warranty is 1% of module revenue and put into cogs. I'm less certain about insurance cost. Any ideas?

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Guest Klothilde   
Guest Klothilde

Warranty is 1% of module revenue and put into cogs. I'm less certain about insurance cost. Any ideas?

They actually put it in selling expenses (page F-20 from 2011 AR Yingli): "Warranty expense is recorded as selling expense." http://ir.yinglisolar.com/phoenix.zhtml?c=213018&p=irol-reportsannual At least Yingli and Trina do, and I think so do most if not all of the others as well. In 2011 Yingli incurred $24,M in warranty expense on a volume of 1604 MW (i.e. 1.5 ct/W). But you are right, it is 1% of revenue.

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dydo    1,391

thanks Klothilde, Cost of goods sold has no warranty expense. But Taiwanese company's costs of shipping cells to SOL are part of SOL's cogs.

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explo    669

They actually put it in selling expenses

You're right. SOL does this too (how did they make only 2.5 cents module selling expenses in Q4?). Canadian put it in cogs.

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dydo    1,391

SOL does this too (how did they make only 2.5 cents module selling expenses in Q4?).

warranty is capitalized as liability, look what SOL has and look what others have. Very little to show for SOL. This is why cash flow from this expense goes back to operating cash flow a lot more for YGE and TSL.

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explo    669

warranty is capitalized as liability, look what SOL has and look what others have. Very little to show for SOL. This is why cash flow from this expense goes back to operating cash flow a lot more for YGE and TSL.

How does YGE and TSL get more cash flow than SOL from the warranty provision? It's the same 1 cent non-cash cost per module revenue dollar for everyone that follow the 1% industry praxis provision. YGE and TSL having bigger warranty liabilities is because there are more YGE and TSL modules than SOL modules installed in the world.

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