[explo 629]

Yes, they would have to be very cheap or wait until utilization goes up. They might not be sold/utilized for a while.

[odyd 1,304]

We have a new writer, a young man from New Zealand, who is going to work on stories from China. https://solarpvinvestor.com/spvi-news/479-ldk-default-sends-alarm-across-the-market

[Paybak66 41]

Exciting development! Welcome to the SPVI family, Ray!

[odyd 1,304]

MOU from the company, it was signed initially in Ocotber 2012, but businessweek is reporting today as it finalized http://www.iii.co.uk/markets/?type=aimnews&articleid=8946393&action=article Sounds like China will finance the venture. Bloomberg note http://www.bloomberg.com/news/2013-04-22/alternative-energy-wins-order-for-china-backed-indonesian-solar.html

[Guest SunSavesUsAll]

Are there still people out there who expect LDK to go under any time soon?

[odyd 1,304]

Are there still people out there who expect LDK to go under any time soon?

The MOU is finalized on the EPC side. Bank may not lend the money, because of LDK's situation. I am sure any other US-listed Chinese company could replace LDK in a hurry.

[Guest Boss]

http://www.pv-magazine.com/news/details/beitrag/sunways--banks-cancel-us-86-million-credit_100011010/#axzz2RIcmym6i

[Guest chrisceeaustin]

Is this an LDK subsidiary?

[explo 629]

Yes

[odyd 1,304]

6.6M Euro line of credit? OMG, now LDK cannot save itself for sure.

But seriously Chinese media is saying they are going bankrupt. Nobody picked on the Indonesian deal and dismissed Thailand as nothing. If bank gives money for Indonesia, LDK lives. If not, well it lives under different shape. LOL

Suntech’s wafer sub Rietech is going on its own, sending emissaries to Taiwan to do wafers for them, orders are booming, according to staff meeting. So taking of wafer capacity could be premature.

[Guest eysteinh]

http://www.recgroup.com/PageFiles/12245/REC%20Q1%202013%20Final.pdf Positive ebitda result. But one offs from silane (still more to come in next quarters as they didnt realize all of it this quarter). Also a government grant gave a positive cash result. New ingot ovens (2000kg) and patented to REC. Looking forward to module effiency in q2 as they are now in production. Overall not happy with the result as I expected much more, but it is positive earnings and Enger guided positive for future. 25% market share in Japan now is not bad either. But at a cost custom built modules reduced total production volume for 2013 to 800 MW (100 MW contract manufactured.)

[Pop2mollys 414]

Dipped at open and is rallying.... http://finance.yahoo.com/q?s=REC.OL&desktop_view_default=true

[Guest Klothilde]

Overall not happy with the result as I expected much more, but it is positive earnings and Enger guided positive for future.

Are you kidding me? They reduced module production cost (incl. freight) to €0.49 = $0.64. If you strip off 3 cents for shipping you have $0.61, and that is basically on par with the $0.60 - $0.61 that YGE will likely report in Q1. REC is rapidly shattering the notion that you need to be in China to be competitive! This, coupled with their successful incursion into Japan (24% sales share, NOT market share!), and their silicon strength makes the company extremely attractive! As of immediately I put them on my short list for c-Si: TSL, JASO, REC. Need to start my DD on REC asap.

[Guest eysteinh]

Klothilde this was allready known by us. Welcome after As you can see in my previous writings this is exactly what I expected. (http://seekingalpha.com/instablog/901705-eysteinh/1752281-updateded-estimates-for-cashflow-rec-q1-2013-until-q2-2014 where i calculate cash cost at 0.61 (deducted the 0.03 $ for depreciation so production cost is 0.64.) That is why for me the result is disapointing as I expected much more, but for the market they seem to understand just recently. Welcome aboard is all I can say.

[Pop2mollys 414]

That's great they are lowering costs but they are lowering module capacity for a reason....

[Guest eysteinh]

They lowered module capacity because they had to custom build the modules for the japanese customer. Not because of lower demand. They are sold out. " Special panel specifications for Japanese market reducing capacity somewhat in the quarter" http://www.recgroup.com/PageFiles/12245/Q1%202013%20presentation%20April%2023%201745.pdf But my plan is to ask them if this was worth it during the next conference call in a few hours. I mean the ASP is down from 0.725$/watt to now 0.68$/watt while pvinsight is reporting higher ASP during the quarter (almost at 0.68 so they have lost the 10% price premium they used to carry.) It seems to be they both reduced volume and aggresivly priced in the japanese market to gain a rapid market share (from 0 to 25% sales to Japan.)

[Pop2mollys 414]

They lowered module capacity because they had to custom build the modules for the japanese customer. Not because of lower demand. They are sold out. " Special panel specifications for Japanese market reducing capacity somewhat in the quarter" http://www.recgroup.com/PageFiles/12245/Q1%202013%20presentation%20April%2023%201745.pdf But my plan is to ask them if this was worth it during the next conference call in a few hours. I mean the ASP is down from 0.725$/watt to now 0.68$/watt while pvinsight is reporting higher ASP. It seems to be they both reduced volume and aggresivly priced in the japanese market to gain a rapid market share (from 0 to 25% sales to Japan.)

Good info thanks for clarification....

[Guest Klothilde]

From the little that I've read about REC one thing I remembered was their heavy Europe focus, and that the company had a higher challenge relative to peers to move volumes to Asia. This may have motivated them to price aggressively in Japan and elsewhere as you said. One thing that I like particularly about REC is the strong brand that they have throughout Europe. REC has been synonimous with highest quality since the middle ages. Now they are in the sweet spot of offering high quality / strong brand modules at Chi costs to them. For some reason I wasn't aware of the significant progress they've made in their cost reduction, since this happened extremely fast and I still had high figures in the back of my mind...

[Guest eysteinh]

Yes they where heavy in italy and germany. Now shifting more towards Asia. I think also like you this is the reason for lower ASP, they decided to push into this market. They do indeed have a strong brand, you should watch what some installers are saying about them for example australian energymatter forums. I know this sounds like bragging, but it is really not, I allways try to be neutral about my investment so to see if its a good case or not. But anyhow this is some examples: http://forums.whirlpool.net.au/forum-replies.cfm?t=2087838 "REC wins hand down for you." http://forums.whirlpool.net.au/forum-replies.cfm?t=2087048 "REC every time (not even close)" I could go on but thats not the point. There are ofcourse other brands out there with good brand awarness so REC is not unique in that regard. When it comes to the cost reduction I think its very intuitive to think that chinese producers should be more cheap than REC since they have lower wages. But since rec in average use only 1/10th the number of workers due to very high automation levels of the factory they have both a very high quality (since production is same every time due to the robots handeling it) and also driving down costs rapidly. You can clearly see a difference if you look at how rec produce a module:

And how a chinese manufacturer produce a module:

With that said Eging in China is highly automated so there are exemptions to this rule. (

) And I would note Trina is an exellent company, this is purly to demonstrate automation production levels. You clearly see how chinese producers are moving wafers in batch processes while REC using more inline process with the wafers moved by no humans. Trina btw is much better on automation now than in the 2010 video where they did manual soldering so dont see this as a critizism of Trina. The real fun starts when REC shifts toward mono production (first by semi-mono) because the fbr granulars is very effective combination with mono ingot growth and can drive down costs so much that the mono production they do allmost costs nothing more than a c-si production. And when grown as a mono ingot the 6n-8n quality does not matter, while all the price advantage will be amplified due to top off, recharge and less consumables effect of using granulars. This is why I am really interested in the new ingot ovens they just started producing with as they are able to operate with semi mono production.

[Guest Klothilde]

When it comes to the cost reduction I think its very intuitive to think that chinese producers should be more cheap than REC since they have lower wages. But since rec in average use only 1/10th the number of workers due to very high automation levels of the factory they have both a very high quality (since production is same every time due to the robots handeling it) and also driving down costs rapidly.

Plus factor in 9% annual wage growth in China: http://www.chinadaily.com.cn/business/2013-03/25/content_16343614.htm Hmm... Until recently Chi cheap labor was more cost effective than high automation levels (e.g. Q-Cells). Seems like automation can rule after all, if it's centered in Asia. Brings up the question on the competitive advantage of current Chi incumbents. When discussing the threat of Korean players making strong inroads into the industry some people here on the board said that the Chi incumbents were already too advanced in process efficiency optimization for any outsider to catch up quickly. And imo REC provides solid evidence to the contrary.