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dydo

ReneSola (SOL)

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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.

 

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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.

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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.

 

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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!

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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.

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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.

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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!

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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.

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That is a generous offer.  Up more than 10% now.

What is it? Pay chairman to liquidate?

Sent from my SM-G950W using Tapatalk

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That is a generous offer.  Up more than 10% now.

Please explain more SOL will issue shares to Li for taking 89% of book. He is not buying anything no real money is going to SOL. Anyone buying up shares is mad in my opinion.

Sent from my SM-G950W using Tapatalk

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1 hour ago, odyd said:


Please explain more SOL will issue shares to Li for taking 89% of book. He is not buying anything no real money is going to SOL. Anyone buying up shares is mad in my opinion.

Sent from my SM-G950W using Tapatalk
 

I read it too fast.  Does "the Company would issue additional American depositary shares (each representing 10 shares of the Company, "ADS") to Mr. Li at US$4.50 per ADS." mean that Mr. Li will buy (assume) these additional shares at $4.50?  Does the company, after issue more shares, will have more outstanding shares of which the additional shares are owned by Mr. Li.  This will make its BS look better?  I don't understand the whole scheme here.

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I read he will be given shares at double the price. So for 80M of debt net to eliminate he will get 18m of sol. You have dilution and smaller capability business. This is what I read.

 

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1 hour ago, odyd said:

I read he will be given shares at double the price. So for 80M of debt net to eliminate he will get 18m of sol. You have dilution and smaller capability business. This is what I read.

 

Sent from my SM-G950W using Tapatalk

 

 

 

 

I don't understand how a company just gives (issues) shares to a certain person in the company without him having to pay for it.  The scheme is too complicated and I, therefore, avoid even looking at it.

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5 hours ago, Jetmoney said:

I don't understand how a company just gives (issues) shares to a certain person in the company without him having to pay for it.  The scheme is too complicated and I, therefore, avoid even looking at it.

I believe, they report tomorrow. Explanation will come out. Essentially this is a paper transaction.  SOL gets no liquidity but real physical assets are given away with added shares covering for the balance. I bet he will sell the capacity for a higher dollar and someone else assuming the debt. The transaction has more of a liquidation character to save the company, where all the dirt is swept off the public eye. I did not think SOL can survive, this seems like they surviving for a little while with a small but perhaps cleaner balance sheet. 

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2 hours ago, dydo said:

Good timing. I think their model was to buy non-Chinese cells for overseas panel fabs in order to supply the high ASP US market. Their high US ASP focused model is almost as screwed as SunPower's is. In SunPower's case it is a bit worse since it is their own cells that will become useless in the model.

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Its been a long 2 years for what I call "round 2" of my SOL investment.  I did fantastic after the crash then stayed out for about a year and decided to jump back in a few years ago (and have been accumulating non-stop.. not very pretty but at this point I am probably considered a major shareholder lol).  I haven't logged in here for a while but I know there were many other SOL lovers here in the past which seems to have faded but for some reason I always liked the way the company did business for the most part in this crazy industry.  They haven't always been correct but were always quick to explain their thoughts and usually first to see industry headwinds and accept it (unlike others who have now fallen to the wayside).  I was skeptical when they started shuttering their manufacturing capacity especially after selling the bad investment in the poly plant at a big loss (if poly hadn't sunk they would have been heros with that move) yet  I kept thinking what will they do next by basically shrinking their company which was very odd (in retrospect I was not mad at that because for every build they lost money so best thing is to slow down).  I always felt however that the company was on to something by consistently pushing for the downstream power play business model.  I actually think they may be the first fully integrated solar company to completely divest of its core manufacturing business and convert to a down stream pure player.  And I am not mad at that.  I have accumulated so many shares at this point and await to finally see a clear balance sheet filing and I am hopeful if they can build out the downstream business without debt the inherit costs/risks of doing so is a lot less then they have had to deal with the past.  My gut is they will surprise a lot of us here in the next few quarters as they expand and we get a better idea with the filings and forecasting.. at least I hope so.. 

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Anyone think there's anything to SOL reporting first this quarter?  Are the books just that much easier now that they've spun off, that instead of going in June they're going first, in April?  And front-running FSLR earnings?

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