ReneSola (SOL)

[odyd 1,293]

ReneSola's CFO resigns

http://finance.yahoo.com/news/renesola-announces-resignation-chief-financial-105500745.html

[odyd 1,293]

ReneSola now profitable, lower revenue for Q4, but higher margin, I guess it wants to stay profitable.

http://ir.renesola.com/phoenix.zhtml?c=210622&p=irol-newsArticle&ID=2113036

[slowtrader 1]

Last time a had shares of a company that went profitable after the CFO resigned, they filed for BK a few months later.. Doesn't has to happen here..

[explo 617]

Almost doubled in 3 months. Their wafer plant should do well. I wonder if the low poly price forces them to take another poly plant impairment charge though? The poly price might approach their cash cost.

 

[jamiecc 7]

They have really been repairing thier balance sheet. I hope they continue to do so. It seems that the recently departed CFO was the one responsible for the good fiscal management. It would be a major lift to thier share price that when they hire a new CFO he or she is someone with some clout in the industry and a good track record.

[explo 617]

I took a quick look. They reported 1522 MT production in 15Q1 and 14.50 $/kg cash cost. They did not mention poly with single word in Q2 and Q3 ERs and CCs. I think the plant is idle now. Global spot price is more than a dollar below their cash cost in Q1. China price might be slightly higher due to import tariffs, but it too has shown consistent decline on pvinsights.

I don't remember how much of their PPE is the poly plant after last impairment, but it is their newest piece of equipment. Another $200m blow to BS or even $150m would take them into negative equity.

 

[explo 617]

12 minutes ago, jamiecc said:

They have really been repairing thier balance sheet. I hope they continue to do so. It seems that the recently departed CFO was the one responsible for the good fiscal management. It would be a major lift to thier share price that when they hire a new CFO he or she is someone with some clout in the industry and a good track record.

I agree that they have repaired it, but it might still contain a big rotten part that if removed will be too much for them.

[explo 617]

1 hour ago, explo said:

I don't remember how much of their PPE is the poly plant after last impairment, but it is their newest piece of equipment. Another $200m blow to BS or even $150m would take them into negative equity.

My guess is that at least 200m of PPE is poly. Possibly 250m or slightly more.

It's had a nice run, but surge in cell prices will hurt them and the crash in poly prices is not one sided good. Panel and wafer prices have not moved a lot, so it is poly and cell prices impact that will hit margins. You want to be a poly buyer, but not a cell buyer, in order to enjoy a margin expansion and not a margin compression right now.

 

[jamiecc 7]

All good points. We will have to see how this plays out. It is the building and selling of the PV plants that is sustaining them and making the stock exciting again and paying off a bunch of past mistakes. Maybe, just maybe they are finally getting it right. And if they are getting it right and the back-log keeps growing who knows where the stock will go. The volume in the stock today is more than any other Chinese solar...Investors are excited!

[Paybak66 41]

All good points. We will have to see how this plays out. It is the building and selling of the PV plants that is sustaining them and making the stock exciting again and paying off a bunch of past mistakes. Maybe, just maybe they are finally getting it right. And if they are getting it right and the back-log keeps growing who knows where the stock will go. The volume in the stock today is more than any other Chinese solar...Investors are excited!

Agreed. SOL may just surprise us.

[explo 617]

I took a deeper look at SOL in my sheets and I agree the turn around case is clear and the doubling in PPS seems warranted, but for those who reaped this I would stay cautious based on poly glut and cell shortage situation and care for profits and avoid exuberant and greedy state of mind based on euphoric turn around ride so far. There will likely come a time when it is better to trade than ride the stock. Maybe not take all profits now and run, but stay ready to exploit potential negative turn off events could be the prudent approach here. Congrats to those who held it from the low.

The business transition to developer and asset operator as well as LED with 30% GM is exciting I agree. To bad the BS is not stronger to accelerate this transition though. I think they'll move away from third party module sales due to high cell prices pressuring their margin there and focus on third party wafer sales instead, which should enjoy high gross margins due to cheap poly now. This means that in Q4 revenue will take a hit and GM will get a boost. Bottom line will likely take a minor hit though, but their EBITDA margin will improve and it will further strengthen their financial situation. Building component inventory during component shortage is very risky, so my bet is that they'll wind down third party modules sales significantly now.

[jamiecc 7]

The third party Module sales in all the different countries that they were in kept their name and reputation as a major player in the limelight but it didn't do anything for the bottom line. I am glad that they are going to significantly reduce this portion of their business. I want them to continue to focus on downstream, LED, and Wafers (since the timing is right for Wafers right now). The one thing that SOL has always done is to go "all in" when they get into a segment. When they decided a few years ago to get into selling Modules they ramped up really quickly. When they decided to go to outsourcing Modules they ramped up third party sites in a number of other Countries very quickly. I hope they ramp up the developer and assets manager portion quickly because it is really paying the bills. The LED segment is really exciting because of the margins and it seems like they are going to ramp quickly now that they have developed a whole catalog of products. And did you catch in the conference call that they are also dipping their toes into Windmill development....Very Interesting!

[explo 617]

Yes the are developing or acquiring wind farms in Poland. Yes, this company is exciting. Kind of miss it now that their financials have improved to borderline investable again.

[explo 617]

Over $1b impairment charge for Tokuyama: http://www.pv-tech.org/news/tokuyama-hit-by-record-low-polysilicon-prices

I think many poly plants are at similar risk since prices are at all time low.

 

[odyd 1,293]

SOL reports profit

http://finance.yahoo.com/news/renesola-announces-fourth-quarter-full-124900507.html

[odyd 1,293]

Buying own shares

http://finance.yahoo.com/news/renesola-share-repurchase-program-buys-103000179.html