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Guest eysteinh

The guidance they'll give should reflect this recent breakthrough though and I'm trying to get ahead of that curve.

Bingo. This is what happens when they radically increase the average of the bell curve spread for wafer effiencies. It takes a while before the financial statment will show this. So you will get "ahead of the curve" in the stock market if you realise the technological benifit they have recived before it is shown in the financial results.

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Hi Klothilde,

Hi explo, I'm still trying to understand the SOL tech migration. Do you know how much of the 1.8 GW multi wafer lines they have already upgraded to A++ and by when they want to complete the whole upgrade?

End of 2011 they upgraded all their 1.8 GW multi furnaces to support Virtus I growth (monocasting). They could be configured to either quasi or multi growth after that. After this their multi module performance started to see performance increases too. I think the result of that furnace upgrade has led to that the furnaces now also can be configured to the new Virtus A++ growth method. All furnaces are enabled, so no upgrade or capex are required at this point. It's just a matter of switching the configuration of each line to use this method instead. I think that that is process-wise and technically quickly done and if their contracts for Q4 and Q1 shipments have old multi specs I think they can change that with a win-win discounted taste for customers as it doesn't cost much more for SOL to make a A++ wafer than a standard multi wafer (per Watt it costs 1-2 cents less) - it's just much higher quality and the customer can use it the same way as a standard multi wafer.

Also I noticed that they don't show data sheets for the regular multi-modules 230-250 Wp on their homepage, however these modules are still being sold in Germany at dumping prices: http://ap-solar.de/ Is this just a sell-off of old stock? Or are they still manufacturing regular multis but not advertising them?

Yes I think this is part of the confusion with SOL. As recent as a year ago SOL wasn't a strong module player at all. Their multi modules averaged 230w and they only had 10 persons in the module sales (it's said that they hired 1000 in 2012 as they saw the new opportunity). The module division was built in 2009-2010 and was only intended to sell with little efforts during shortages. Then in 2011 they made the Virtus I breakthrough with Quasi-mono panel reaching 245w average, triggering start of increased focus on the module business from this differentiation (partially driven by the wafers powering this being less standard and thus not having a mature cell maker market for this type of wafers). In 2012 they discovered that they don't need to do the seeded monocast to reach same conversion efficiency level, reducing cost and increasing market for SOL's HP wafers. So to answer your question, I think a lot of the sales in 2012 has been about getting rid of as much as possible of inventories of weaker products ahead of worst price declines, to have a good start for 2013 with their new low cost high quality product portfolio and no legacy product inventories. The ASP we've seen so far (only selling to low ASP markets Europe and Australia) is probably a result of a mix of dumping old multi "junk" and getting a premium for Virtus I. Note that this is not just SOL at the factory gate. It's also remaining channel inventory at distributors of SOL modules that needs to empty before losing value as new shinier 2013 SOL collection arrives. The channel inventory might have a production date dating back quite long. After the Virtus II breakthrough they've so far continued on the module path, but I'm curious on what their next step will be. I think they'll expand (even if that sounds mad in these days) to exploit the opportunity gained and I'm quite sure it won't be on cell and poly (although they have a cost breakthrough on poly in 2012 as well), but not fully sure if they will grow module or wafer business. Module is cheap and they have a big opportunity here to become one of the big ones and it diversifies and stabilizes their business structure. Wafer on the other hand is where they bring most value to the industry and their core business and they have a good opportunity to increase their claim on this market too.

In Q3 SOL had the lowest ASP among the solar 9 at 0,67 $ per watt. Would you expect SOL to move up to an average level in Q4 relative to peers?

SOL has guided that the ASP gap to Chinese tier1 module brands will narrow or invert in Q4. That's on an apples to apples comparison, i.e. within individual markets. On the fruit basket comparison they'll also narrow the gap, by selling more into the high ASP geographies in Q4 vs the opposite so far. I expect peers will see bigger QoQ ASP drops than SOL in Q4.

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Guest Uncle Chang

So far the top 3 performers year-to-date are LDK, HSOL and SOL; it makes sense to me since all 3 are Polisilicon Producers. Taiwan Green, Delsolar are also topping the Cells producers, both make Wafers. Don't know if it's all conincident, but it does make sense to me. The 3rd and 4th places are CSIQ and TSL, honestly I've been treating them as twin brothers, I think they basically do the same things with silimar capacities, except CSIQ is doing more overseas? YGE was the one on headline news when it was reported with more than 2.2Gw shipment last year, it doesn't seem to help it much. JASO should've done better once people figure out they can still sell their cells domestically? That's a question, not an answer for now. JKS, CSUN, STP, DQ are falling behind, can't figure out why for now, especially DQ which even makes Polycilicon. Will keep monitoring..

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Guest abcdefgjoho

i see one thing happening here again which I know from yahoo board. alot on technicals of modules not much on branding and standing of companies. sol is still a clear tier2 module supplier as far as brand name is concerned. they will have todo quite alot of marketing, sales to get to a tier1 status which then allows higher asps. if you do a search on solar installer forums you get ten thousand hits for stp, yge e.g. - not much for renesola modules. sol has to close that gap and that wont happen overnight i fear. it is not only about module output and technicals - in the end solar modules are a 20-50K$ product on a standard rooftop install and people only install what they know.

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Abc, You're right, Renesola has not invested anything into brand building. They've rather claimed that the amounts spent on sponerships and similar by other names are not prudent capital management in this low ASP environment. Before 2012 they were basically tier3. I think in 2012 they rose looking a market-share in Q4 to a tier2 name. What they are investing a lot in now is sales. They'll also attend several shows every month from looking at their event schedule. I don't expect pricing of SOL modules to be based on other things than power output quality, warranty and insurance quality. They produce most kWh (ranking highest in tests like Photon does, having among lowest PID, LID, temparature coefficient and low light condition loss), best warranty conditions (linear+, 25 years for included microinverter) and warranty insurance by independent third-party insurance company. These properties increase projected returns from the modules and reduce the risk and will thus render a price premium on that basis. But they will not get a brand awareness price premium like Yingli can (could?) get. After awhile (years) that could be earned from big market-share and good reviews and word of mouth instead of advertising. Advertising is often a quicker route to a price premium, but in PV which is an economic investment not a product to use for better life quality, I think advertising ROI is more uncertain. It will be interesting to see if this view remains after SOL's increased market-share in Q4 and as I expect in 2013. The higher market-share you have the less the relative cost to protect it with advertising and the more to lose. I'm not sure, which is best at that point, but SOL hasn't chosen the brand avenue yet (perhaps it's an easier decision to enter than exit that path). Abc I also think that the reason that branding between STP, YGE, TSL, CSIQ and HSOL has mattered as much as it has was that there were very little other difference between their modules. They all produced something like 90% Skoda and 10% high cost BMW. Now Renesola produces 100% BMW quality at Skoda cost. Quality in this case is different though, since it doesn't decide how fun, convenient or safe it is to drive, it decides how rich you'll get on your investment in PV, and that's easier to put a price on. It might still be fun to have a well recognized brand on your roof, but it's not the same thing as with other products. With strong insurance coverage of the expected economic return now, the brand also means little from the economic perspective, while before these insurance were introduced in 2011 the brand could play a big role here, even among the bankable names. In my view the industry has changed significantly the past 2 years and the valuable strengths of the past might not be the most valuable strengths today. I actually think there is quite a big risk with investing in a name like YGE or TSL over names like JKS, HSOL or CSIQ, since the big weapons the former have (brand name as a soft insurance of the panel ROI) have be rendered virtually useless by the new hard insurance innovations in the industry. Tier2 has managed to neutralize the tier1 advantage. Note that CSIQ was one of the first to do this and just look (in their presentations) how quickly they climbed to join TSL in market-share after introducing their insurance solution. With risk I mean that the first two still have market caps in the 400-500m while the latter have market caps in the 100-200m and those market cap diffs are still reflecting a significant brand component, since market-share difference is not as big (best comparison here is CSIQ and TSL), while my view is that the actual business impact of the brand component has lost a lot of its former significance in today's PV market. IMHO (I know that this view can be perceived as quite upsetting - and it's just my view, it might not be very accurate or even correct).

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Guest spiritcraft

Not that it matters, and I don't know the validity of his numbers in the slightest, Boss from the yahoo board predicts a $.02 profit from SOL in Q2. I certainly don't take a yahoo members post with anything but a grain of salt, I did find it interesting since he has been so negative for so long. Also the Chinese story that was posted in another thread has TSL apparently claiming a profit later this year was a bit unexpected. I suppose the gist of all this again is that when these companies start going into the black in this low cost, demand drive by price environment global market we may see some real price appreciation for our various holdings. Profit rumblings, even without details are a welcome relief after two years of bleak doom. One thing is certain, not all will ever be tied to what Germany installs again. And I must again thank the country of Germany for basically giving the world Solar PV in a meaningful way through their bold fit and dedication to renewables. As to the point above, I think brand matters, especially concerning bankability and the perception that a company will be around for the guarantee is more important than ever.

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Guest Boss

My SOL numbers for Q2 2013. 300MW wafer sales ASP $0.25 300MW module sales ASP $0.65 wafer cost $0.21 module cost $0.52 opex 36 mio interest 12.5 mio EPS $0.02 (Of course if ASP are lower then SOL will post a loss.)

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Guest spiritcraft

HI Boss... Welcome. Please don't take any offense with the above... I didn't know you were here and can't of course take your numbers as gospel. I am sure we all appreciate your taking time to analyze and post numbers.

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Guest singular

No problem spiritcraft. I just signed up here on this board,because yahoo board sucks big time now.

Yes, welcome Boss, Nice to see you. I agree about Yahoo. I have never seen message boards go to the crapper as fast as Yahoo did.

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Guest Boss

thanks singular. Hope we get more good news when they report Q4 numbers (which will still be bad) that the bottom is in and Q2 2013 will be the turn around.

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Hi Boss, nice to see you here. Old timers are coming in, this is good. I hope you will enjoy the board.

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Guest Boss

Thanks odyd. I hope snake comes here too. I try to tell him on TSL yahoo board but my post disappeared within 2 min.

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Yes, moreover I think that movement of shorting has relationship to ability of meeting guidance. I am not seeing numbers for December yet, but my concerns about guidance for certain companies are reflected with increased short and reductions are seem to align with the ones who show promise.

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After a lot of review, this is my planned portfolio allocation of PV companies going in to 2013: 50% SOL 15% CSIQ 10% YGE 10% HSOL _5% JKS _5% REC _5% JASO One non-Chinese pick, which is more than usual for me. This is still preliminary as it is based on speculation of what guidance for 2013 can be expected based on strength exiting 2012. When actual guidance is given, things can shift around. So this should reflect my view of who, at least initially, are best positioned coming out of this trough.

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I like that part too. I also liked the part about consolidation and holding to prepayments.

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Woongjin results from H1 2012, anyone writes and speaks Korean? Could be a neat source of info?

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Oci:

"The most popular commodity these days is high efficiency multi-wafers."

Cheapest power.

Interesting that Oci makes this observation.

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