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Guest Klothilde

First Solar (FSLR)

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eps guide for 2018 is 1.25 to 1.75

Is this more or less than what analysts were guessing?

https://www.sec.gov/Archives/edgar/data/1274494/000127449417000048/ex9912018guidancepressrele.htm

 

Stock is dropping off it's high that was hit before that information was released.  I guess investors have just realized the multiple they have been paying?

Edited by sunnypease

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37 minutes ago, Mark said:

Previous 2018 estimates were $1.25 on 2.38B

Thanks!  

Anyone have a guess what EPS might be with 4GW 2019 S6 production?

It seems there were a couple positive surprises: upward revised 2018 EPS, extra capacity in Vietnam, S6 working prototype and talk of future capacity expansion.

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Had a chance to look at the presentations, awesome. Great company, great plan, great vision.

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9 hours ago, dydo said:

Had a chance to look at the presentations, awesome. Great company, great plan, great vision.

Nothing new really, right? The only change from before  is that share price is much higher. And the outlook for the US policy environment to operate in.

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1 hour ago, explo said:

Nothing new really, right? The only change from before  is that share price is much higher. And the outlook for the US policy environment to operate in.

The plan to open more factories is not new?  

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Holy upgrades Batman!  

 

Needham  65->70  Buy

Cowen 66->77 Outperform

Baird 53->69  Neutral

Guggenheim 63->74  Buy

DB 65->75 Buy

JP Morg 58->59

 

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2 hours ago, explo said:

Nothing new really, right? The only change from before  is that share price is much higher. And the outlook for the US policy environment to operate in.

The presentation is great. The definition of the plan is awesome and delivery is in their hands, free of any external conditions. When one wants the clarity of expectations, FSLR delivered on all fronts. I am not surprised analysts have moved the dial for the price up.

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6 hours ago, Klothilde said:

OMG. Can't believe my eyes. Pinch me please.

You can't believe it because all you are capable is hate.

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15 minutes ago, dydo said:

You can't believe it because all you are capable is hate.

Not so much hate as surprise.  Your praise of the company sounds like a U-turn when compared to the (very) negative view you held only 12 months ago:
https://seekingalpha.com/article/4026774-crisis-american-solar-manufacturing-fall-first-solar

And I don't think the company and its vision has changed much since then, has it?

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1 hour ago, sunnypease said:

The plan to open more factories is not new?  

Did not crunch in detail but i think start the utilization of Vietnamese facilities had been communicated. Doubling capacity when rolling out S6 is what i have expected and has to my memory been suggested. They've long waited for something worth expanding. 

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36 minutes ago, dydo said:

The presentation is great. The definition of the plan is awesome and delivery is in their hands, free of any external conditions. When one wants the clarity of expectations, FSLR delivered on all fronts. I am not surprised analysts have moved the dial for the price up.

I'll have to look deeper. Too me the slides seemed more illustrative or colorful than usual, but not more detailed or fundamentally changed compared to previous strategy updates. Their first investor day when first announcing the strategic shift around a year ago was the big revelation to me. Now they are just doing what they said they would do. 

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21 minutes ago, Klothilde said:

Not so much hate as surprise.  Your praise of the company sounds like a U-turn when compared to the (very) negative view you held only 12 months ago:
https://seekingalpha.com/article/4026774-crisis-american-solar-manufacturing-fall-first-solar

And I don't think the company and its vision has changed much since then, has it?

My view was reflective what happened 12 months ago or even more. failure of series 5, the cost associated with it, still series 6 mass manufacturing and the cost. To idiots, I evaluate solar company's conditions. One who evaluates describes conditions at the time and plots the future. I do not have relations to love one and hate others, those lack objectivity.  I also wrote a critical article about CSIQ and praised JKS, to change this when the situation changed. You did not get surprised here? maybe I am a CSIQ hater, hiding behind the artifical love for it? LOL

https://seekingalpha.com/article/4083522-solar-manufacturing-landscape-post-q1-2017-results

Plenty has changed, tariffs, the popularity of S4 due to it, selling contractual volume which otherwise would not exist. Nothing gets by you, but take a note I praised the presentation, agenda and the company. The execution is left. FSLR is fully priced for it. It is not an investment I would make. They are paying the price of 2020 stock, and the unknowns about executions are ahead.

However, as I said one can wish for clarity like that from them all. Investors can very quickly understand FSLR business, do calculations and weigh in pros and cons. Canadian Solar does not have such a detail. I love how FSLR presents itself, and itself against the market conditions and so on. Finally, I see how you got surprised by objectivity, I doubt this will ever change. 

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In my view, the major difference between 12mo ago and today was the tariffs (the suniva case). That changed sentiment on the stock, and the continuation of the rally has since been based on execution. There’s nothing really different or big in the fundamentals of their strategy, just minor tweaks as they go along. As Robert said, this is now definitely fully priced on the stock and we are paying 2020 prices. There’s little upside left and more downside risk. The risk-reward ratio is now the opposite of what it was back when FSLR was trading at $28 (when I bought big but sold too early). I have to learn my lesson of letting things run no matter how excessive they seem in the short run, until something changed that sentiment in a major way. That hasn’t happened with FSLR so this uptrend will continue, albeit limited. This is based on all current available and public information as of today. Let’s see what we get with Tax reform passed and the current BEAT as it is.

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Finally we got a cost data point from Mark, though not completely unambigous.  Mark said during the day that FSLR's S4 module was the cheapest on the planet.  When asked by an analyst if his claim also held ground against the 27-28 cts/W claimed by Longi Mark said that when including freight and warranty (which CN competitors traditionally don't include in COGS but in OPEX) the comparable cost would become 28-30 cents and that FSLR would even be cost advantaged compared to that cost level.

Listen to him at 2:55:00
http://markeys.net/firstsolar.html

So what do you guys and gals think is a conservative assumption for FSLR's current cost listening to Mark's remarks?  Please chime in, I'm interested to hear everybody's opinion.  I'm personally taking 29 cts fully loaded incl. freight and warranty to be on the safe side (27 cts w/out freight and warranty).

 

Edited by Klothilde

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1 hour ago, Klothilde said:

Finally we got a cost data point from Mark, though not completely unambigous.  Mark said during the day that FSLR's S4 module was the cheapest on the planet.  When asked by an analyst if his claim also held ground against the 27-28 cts/W claimed by Longi Mark said that when including freight and warranty (which CN competitors traditionally don't include in COGS but in OPEX) the comparable cost would become 28-30 cents and that FSLR would even be cost advantaged compared to that cost level.

Listen to him at 2:55:00
http://markeys.net/firstsolar.html

So what do you guys and gals think is a conservative assumption for FSLR's current cost listening to Mark's remarks?  Please chime in, I'm interested to hear everybody's opinion.  I'm personally taking 29 cts fully loaded incl. freight and warranty to be on the safe side (27 cts w/out freight and warranty).

 

From a pure manufacturing cost perspective, they may have a slight cost advantage of a penny or 2. JKS by example has sales at $0.022/W and that includes shipping and insurance. That includes shipments to the U.S. and Europe to get blended costs. The shipments to Asia Pac regions are a far lower and at the lower end of the $0.28 range.

 

Where FSLR loses much of the advantage is in the Operational expenses. They are running at over $0.06 per watt compared to the low $0.03 for a JKS.  Granted FSLR business model is more in line with CSIQ  with the Project business built in to the Opex.

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5 minutes ago, SCSolar said:

From a pure manufacturing cost perspective, they may have a slight cost advantage of a penny or 2. JKS by example has sales at $0.022/W and that includes shipping and insurance. That includes shipments to the U.S. and Europe to get blended costs. The shipments to Asia Pac regions are a far lower and at the lower end of the $0.28 range.

 

Where FSLR loses much of the advantage is in the Operational expenses. They are running at over $0.06 per watt compared to the low $0.03 for a JKS.  Granted FSLR business model is more in line with CSIQ  with the Project business built in to the Opex.

Help me out.  If we compare blended COGS excluding freight and insurance for FSLR and JKS we get 27 cts for FSLR vs. 34 cts for JKS.  That's 7 cts difference.  What are you comparing to get 1-2 cts difference only?  CSIQ was at 36 cts blended on my books, that difference would be even higher.

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