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ReneSola (SOL)

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Guest redsolar

I would ask, Given the poly spot price, how would they plan to leverage existing poly plant investment? What are the future prospects in expanding cell R&D and capacity? Renesola is researching on carbon fibers to help reduce the cost and panel weight. Any insight into this would help. Updates on Replus micro inverters...future direction on this. Are they planning to increase module capacity to absorb more wafers in house?

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hi red, I got the questions list just closed and sent to edit, sorry. There is poly question in there but mostly modules and wafers talk. I see if I can get it in the second draft.

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Modules up to and including 2012H1 have been rougly around 70% Europe 30% Australia. The Europe part includes focus on some of the newer eastern part markets. From 2012H2 and forward a big push in US will be made. Higher ASP there than in Europe and China and SOL modules are duty free in big volume. Wafers sales are quite diversified and annual geographical breakdown details are available in their 20-F filings, but Asia is a big market their.

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Guest redsolar

I am trying to asses the Module ASP for Q3. 70% Europe and 30% Australia means ...no Chinese market ? All these markets ASP suck for now. If this is true...the avg ASP may be around 65c/w. I am hoping USA markets will chip in for about 20% ...so the ASP can be brought to 67c/w. Wafer business...is safe...got good clients like JASO,CSI etc...less margins tho.. Do you know ...why these guys are aggressively opening new sales channels...when the capacity is already sold? Are they planning to increase the capacity (1.2GW) ...may be to 1.5GW in china? and 150MW from India (already started)

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The 70/30 was from the top of my head and probably not very accurate. They did not give much Q2 shipment breakdown info on Q2 CC, but guided the Q2 breakdown during Q1 CC. According to that guidance the sequential growth in Q2 was mainly in Europe. Here's the guided Q2 breakdown, as I understood it: Australia 20 MW Germany 56 MW Rest of Europe (Italy and eastern Europe dominated) 84 MW In Q2 CC they guided that Q4 we would see US and Japan module sales and possibly some China module sales. From an ASP perspective I think its good if they can supply us much as possible to other markets than Germany and China. From an AR risk perspective it is good to supply us much as possible to other markets than Italy. My understanding is that, of the big markets, Japan has best ASP followed by the US.

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Data for SOL in September shipments shows 50MW to Europe, 11 to the US and 10 to Australia. I have only export data, but as stated in the article they have shipped it more than quoted. Trina shipped 30MW to India in September. Yingli largest shipment to US at 26MW and 9 to Chile. Japan in September , Trina 4MW, Suntech 11, CSI 1o, 3 from Hanwha and under 1MW from JA. Hanwha sold 22MW to the US.

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Thanks. That 11 MW US sales in September looks like a good starting point, for them to deliver significant US sales in Q4 as promised.

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Guest redsolar

Odyd, Really appreciate for sharing the valuable export numbers. SOL looks very bullish on module shipments...71MW exported in September alone? If we factor July, August months + domestic (China) shipments.....Q3 must be looking well above 180MW (170MW is the high guidance)...which sounds pretty good to me. What do you think Explo? Pending duties...Looks like Q4 shipments to Europe is going to be very high for everybody. Given Renesola module capacity and the increase geographic sales (US+India)...how they going to meet the demand?

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I agree red, the 71 mw in a single Q3 month is bullish when we see Trina cutting Q3 guidance heavily. Odyd's export data for whole Q3 for SOL was 184 mw, way above high end guidance on just exports. On module capacity they doubled to 1200 mw in Q2 to meet H2 demand, so that should be ok for now. And there's a lot of external cell tolling capacity available now.

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Guest redsolar

Looks like Renesola gets the last laugh... With ...60c/w selling cost...even if they do 65c/w ASP....they are looking at above 7%GM....with positive cash flows due to 100% utilization. Wafer sales may bring the avg GM to 5%. CSI states...US market is one of the lowest margin market. They have better margins in Australia than USA. I guess the cell tolling and the tariffs taking a toll on all the Tier1 Chinese.

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Yes, compared to wafer makers like LDK and GCL with low utilization and ASP SOL is much more comfortable with its full upstream capacity utilization. Their growing module business will drive their margin short-term. While spot market spread between wafer and module is 45 cents, SOL's cost to convert wafer to module is only 33 cents.

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Guest redsolar

Explo, Are you serious? only 33 cents from wafer to module? I guess..The cell tolling itself eats 20c.

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http://ir.renesola.com/phoenix.zhtml?c=210622&p=irol-newsArticle&ID=1730277&highlight= "The Company expects solar module processing cost to decrease to below US$0.33/W and total solar module selling cost to decrease to below US$0.63/W in Q3 2012." I'm not sure if this includes the cell outsourcing cost. Probably excluded in the 33 cents and included in the 63 cents. They've said that the outsourcing penalty is very low now, 1-2 cents.

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Guest nanofrogfish_spf

CSI states...US market is one of the lowest margin market. They have better margins in Australia than USA. I guess the cell tolling and the tariffs taking a toll on all the Tier1 Chinese.

Hey red, I'm not sure they were implying it was one of the lowest margin markets. The US was grouped in the higher margin category, while China, India and Thailand were the lowest margin. The other unclear part, is the discussion topic when this comment was made was about system "kit" profitability in Japan. So I'm not sure if that was specific to kits, or a general observation including modules (probably both). I wasn't really surprised about Australia, but I had thought the US would be a little better than the EU...but as you noted I guess the tariffs are the big difference. The quote from the CC: "And as a matter of fact, if I read the profit margin all key markets, Canada and Japan will rank it first and then the European market and maybe Australia market and then the U.S. market and the lowest margin market will be China, India and Thailand."

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Guest redsolar

Not bad...For SOL, selling cost in China will be much less than 63c/w guidance for Q3..out of China. If you consider 60c/w selling cost...we are looking at 6.25% GM. 12+15+33 = 60c/w

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