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Guest Uncle Chang

Based on months of observation, HSOL, CSIQ, CSUN have been positive year to date, SOL has been flip-flopping around the positive'negative line with loss of 4.58% ytd. JKS has shown strength but still lost 22.2% ytd. It seems to me that STP and DQ are trying hard to maintain $1 listing requirement, STP can surely do reverse split, don't DQ can do that. JASO is trading at 86c, it might get de-listing notice if it doesn't move over $1 shortly, we'll see if the funds will support it.

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Hi Chang, I moved your post to this forum. I also moved my own to show recent news, including market in China. Let's try to keep the posts to companies or start threading under this forum.

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Guest Uncle Chang

<<when the turnover got gloomier, some silicon material traders chose to expand shipments to improve their liquidity and avoid the adjustment of the price after the holiday...More and more enterprises shut down this week, and some of them withdrew from the market and even went bankrupt...>> Other than what have been mentioned, cells makers also dumped Wafers, modules makers dumped Cells, I think they don't want extra "raw materials" sitting there if they can buy more cheaper later... One thing that's for sure. They can't keep producing what they can not sell, and they can not keep losing money without getting into more financial troubles. This gotta come to the end at some point, we're not really watching Ocean-7 or 11, Chinese Solars can end up with just 5? How do they come from 11 to 5 is probably everyone's guess, even the top tiers look shakier than the little ones!

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It's time to forget too big to fail. Instead it's easy to make a "too expensive to bailout" list. No one of solar 11 has a market cap much above 300m anymore, so the price tag for most of them are their net debts. Here are the net debts to bail out to give the different solar 11 and GCL capacity parks a sustainable financial structure: GCL 3.16b LDK 2.61b YGE 1.86b STP 1.63b JASO 0.55b SOL 0.55b TSL 0.52b HSOL 0.42b JKS 0.40b CSIQ 0.35b DQ 0.29b CSUN 0.21b Who has technology/capacity that stands out? I'd say GCL on poly and wafer SOL on wafer JASO on cell YGE on wafer and cell LDK is a mess and to expensive to bailout. Sell Mahong and some of the other decent capacity to someone that can make efficient use of it. JASO committed to build 3GW integrated in Hefei. Let them take over LDK's Hefei capacity on the cheap. JKS could use a poly plant at home, in Jiangxi province, maybe they can make LDK's Mahong as efficient as their other plants. STP is too expensive to bail-out. What do they have? A poster boy, a brand name and unfeasible cost structure? I don't see much point in saving those two, just extract some of the useful parts for others. YGE might hold the future tech, but is really expensive to bail-out. Hard to call, since short-term SOL and JASO can provide same quality panels at lower cost. LDK and STP can fail because it is expensive to let them not and there's no real tech and knowhow there. Fail them to relieve Chinese PV industry of the debt burden their reckless management has brought upon it and then make better use of the capacity, overtaken at foreclosure prices. DQ and CSUN? Too small to succeed?

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Guest redsolar

Good perspective Explo. As per your net debt theory...don't you think CSI looks more interesting than others? I am asking this based on their project revenue prospects going into 2013 and their lean business model.

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According to Reuters, Chinese companies must find global locations to avoid tariffs. Very obvious for global status and manufacturing concept. We had few articles with this simple truth. The statements made were that cost of producing in Taiwan is about 15% higher and Europe is 40% higher. I am not sure about Europe being that high if you looked for it. However I would say that if they picked Malaysia, Philippines, Thailand the costs of labor should be a lot less than in China. In Europe Czech Republic, Poland offers costs drop on labor. Finally automation should be taking over the content of labor in module building, I think the last area of the manual labor.

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I think that, some of those line of credits will be used for the asset purchases. Chinese banks can assist in helping to buy facilities, companies in the brand-name of large companies in global locations. It is natural to pick the best operational units not on the basis of their debt levels but quality, brand and operational efficiency. I would not put too much emphasis into a size of a debt, but more into an ability to pay interest rates and manage operations. LDK is unable to manage own operations, I am afraid. TSL, YGE, STP, JASO are the four I would imagine things will concentrate around those names. HSOL is Korean, they are going that path. CSIQ is separated from the group, their path is of separation from Mainland. Renesola will make to the core I think but I am not convinced they are there today. The pressure could be from GCL to let ReneSola stand alone.

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Guest redsolar

With reasonable automation, I think labor cost can be traded off with shipping costs...if they co-locate to the markets or close to it. Also, some of the materials that goes into the final assembly...may be a lot cheaper in China than in any other parts of the world. My worst fear is ...cost is not the issue here... the whole thing is orchestrated by the Chinese Govt policy to keep running the employment up.

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Guest redsolar

I would list the specialists as follows.. GCL - poly SOL - wafer JASO - cell TSL - modules CSIQ - projects JASO, TSL, CSI has the best probability to sustain long term. CSI may very well turn around in the next 6-12 months. SOL - operationally...they seem okay...but the poly plant could be a liability at least in the near term.

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Perhaps, but those high numbers of people employed are not that high when you think of size of the population. Also consider layoffs recently, it can be avoided. The free-market cannot sustain businesses with higher costs than the price of the goods. Shipping costs are very high, ultimately are they going to abandon the markets or pay the tariff? They will find the best alternatives. India is not only a huge market but well educated, cheap labor pool. Perfect fit for Asia.

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Guest redsolar

India has huge infrastructure development needs...which require a lot of power...and obviously solar make sense as a peak power generator. For companies, it make sense to co-locate, develop and sell within India. But building in India and exporting may not make sense. Labor cost in India is not cheap any more. Now a days, many companies in India are out sourcing jobs to Sri Lanka, China and other SE Asian countries.

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Red, yes i think csi is in a quite good position short-term, but long-term i think they are too downstream focused for my taste. The healthy balance sheet in their case is related to that they have not invested much in upstream capacity.

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Odyd, i think the high debt level will be problematic for China PV. They have to let the banks take the punch here if they want to maintain and secure no 1 PV position.

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Guest redsolar

Explo, CSI has Hetero Junction cell tech (21% eff) ready to go. But this requires a lot of cash commitment. The CEO is weighing the benefit of building new cell lines now or wait for the project revenue to roll in. Otherwise, I would agree...their best standard modules right now are going around 230-250w...which is way low compared to Renesola or JASO.

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Red, I think it would be only natural if they picked India for a location. Labor is rather cheap outside of metropolitan areas. The cost could be a lot less than China as certain social programs are simply not available to Indian workers versus Chinese workers.

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Explo, I think companies able to expand their capacity globally will be named to stay around. The ability will come from loans and full, 100% support by banks. Let's put it this way. I do not think that company with low debt is first on the list for survival. I do not think that company with big debt is out of the list. The size will matter, and the brand name as well. Operational capability also. Relationships favor STP, YGE and TSL for the first for consideration. I am not getting the same feeling from CSIQ, JA or ReneSola. Hanwha is Korean, LDK is done, Sunergy has not impact, Jinko in the same boat. DQ does nto exist as far as I am concerned. Add GCL, Hareon and that is the leadership if banking is concerned.

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Guest redsolar

They can use it or they can sell it to the flat panel display markets...which ever way they see fit. Good margins on Silane gas exist right now.

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Guest redsolar

Odyd, I think you are wrong. Remember, LDK was a glorious company in its good times. And it had great relation ship with banks and politicians. LDK was down...simply because of their capacity incompetence. Same fate is in store for other companies as well. YGE may very well join the incompetence club soon. Their debt is their curse. I don't think banks will throw their money at these zombies...knowing they are not going to get it back. At this moment SOL and CSI looks like the best managed companies so far. If you consider 1.5B$ revenue per year is decent for a tier 1 solar company. CSI already secured half their revenue for the next two years. You can't beat that in this market. SOL, as long as these guy run at more than 70% utilization with positive operating cash flow...should be fine. Just picture yourself...by taking 70% of Europe off the map and calculate the demand vs supply. This does look scary at least in the next 12 months. As other technologies like CIGS start adding capacity...the capacity is only going to increase.

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Trying to make an attachment for excel file. Two companies reported Solartech 41% drop in revnue in Q3 versus Q2. Danen 39% Added DelSolar Added Gintech and NSP It looks like revenues are down for Q3 in range of 28 to 40%.

Taiwan2012.xlsx

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Quite interesting article here about how the banks won't, for the sake of Chinese PV industry, take the punch and bury the corpses they backed: http://finance.yahoo.com/news/glut-solar-panels-poses-threat-094403814.html According to the article Chinese companies are reluctant to admit failure and worse the banks that backed the failed companies are also reluctant to admit failure and thus supports continued failing. Result is that both more share holder capital and bank credit losses than necessary occurs when something is failing in China. A bit surprising is that the big banks cannot admit failure and reduce credit losses by taking them early. This might increase the survival chance for the biggest losers (LDK, STP, YGE), like odyd is suspecting, instead of redirecting the production capacity (and possibly brand) to the smaller but more competent management teams.

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A expected solar is under attack from all corners Forbes, Barrons, Seeking Alpha, Reuters, Bloomberg. There is no a single source from the popular publicists to oppose the public line view. What is not expected, in investing there is an opportunity view, normally opposing the general concept, contrarian approach another words. Not this time. Not a chance for a surprise 2 days before final result for the US duties.

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2012 China PV Market: Slow Start but a Strong Ending to Come

Shanghai, 9 October 2012. China’s domestic photovoltaic (PV) market made a slow
start to the year, with just 720 megawatts (MW) installed in the first half,
according to the latest research from IMS Research (recently acquired by IHS
Inc. (NYSE: IHS)). However, installations are forecast to surge in the
second half, with more than four gigawatts (GW) of PV installations to be
completed, taking full year installations to five GW, according to the Q3’12
edition of the
China PV Market – Supply and Demand Quarterly
report, released in September.

In September, China announced its latest PV
Development Five-Year-Plan which targets 20 GW of PV systems and one GW of
solar thermal power to be completed by 2015. However, this plan did not bring
the levels of financial stimulus that were expected. “While old issues like
grid-connection and power transmission have still not been solved, new issues
emerged in the second quarter of 2012, such as worsening bankability, poor
credit conditions and a general slowdown of the Chinese economy,” remarked
Frank Xie, IMS Research’s senior PV analyst based in Shanghai. “Many projects
are said to have completed the bidding process; however, they are not yet under
construction. Integrators are prioritizing projects to be completed by year
end, and there will be a huge surge in installations in the final quarter of
the year.”

2012 has so far also bought difficult times for
China’s huge supplier base and utilization rates remained low as a result of a
strong focus on cost control and caution over the ongoing EU trade
investigation into Chinese PV products. Average utilization levels for PV
polysilicon, wafers, cells and module manufacturers all declined in the third
quarter; all were lower than 60 percent. Despite wafer production capacity in
China declining in the third quarter, average utilization fell to just 58
percent; as an increasing number of cell manufacturers favored sourcing
competitively priced wafers from third parties at a lower cost than
manufacturing them in house. Utilization rates are forecast to recover slightly
in the fourth quarter in response to the predicted boom in domestic
installations.
Both inverter shipments and revenues declined in the
second quarter of 2012 compared with the previous quarter as a result of weak
demand. According to the report, the first half of 2012 saw inverter shipments
of just 700 MW, less than half of the amount shipped in the second half of
2011. However, Xie holds a positive view for future inverter shipments in the
second half of the year, adding: “The situation is set to improve, and China’s
rapidly expanding inverter supplier base is forecast to ship more than four GW
of inverters in the second half of 2012.”
Researched by IMS Research’s Chinese analysts, the ‘China
PV Market – Supply and Demand Q3’12
’ was published on 27 September and contains quarterly
analysis and forecasts of the supply and demand dynamics of China’s PV
industry.
For more information please
contact:
IMS Research: Frank Xie,
Senior Research Analyst, T: +86 21 6270 1823 # 806, frank.xie@imsresearch.com
Twitter: IMSResearch_PV
Contact details:
IHS Media Relations
press@ihs.com Tel: +1 303 305 8021
Alternative Contacts:
Europe
Ann Ruff
Ann.ruff@ihs.com Tel: +44 1933 402 255
US
Stacy Hackenberg
Stacy.hackenberg@ihs.com Tel: +1 512 302 1977
Asia Pacific
Yvonne Zhang
yvonne.zhang@ihs.com Tel: +86 21 6720 1823
Follow us on twitter:
IMSResearch_PV
About The China PV Market –
Supply and Demand Quarterly report
The China PV Market – Supply and Demand Quarterly is
IMS Research’s first consolidated industry report about China’s PV industry. It
tracks the true supply and demand dynamics of China’s PV industry. Key
information contained in this report includes:
PV Modules, Cells, Wafers,
Polysilicon & Inverters
Shipments and Revenues
Production
Capacity
Prices and Costs
Supplier and Channel Inventory Levels
Quarterly & Annual PV Installations
Details of major PV projects
Profiles of leading suppliers and system integrators
About IHS Inc. (www.ihs.com)
IHS (NYSE: IHS) is the leading
source of information, insight and analytics in critical areas that shape
today's business landscape. Businesses and governments in more than 165
countries around the globe rely on the comprehensive content, expert
independent analysis and flexible delivery methods of IHS to make high-impact
decisions and develop strategies with speed and confidence. IHS has been
in business since 1959 and became a publicly traded company on the New York
Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS
employs more than 6,000 people in more than 30 countries around the world.
About IMS Research (www.imsresearch.com)
IMS Research, recently acquired by IHS (NYSE: IHS), is a leading
supplier of market research and consultancy to over 2500 clients worldwide,
including most of the world’s largest technology companies. Established in the
UK in 1989, IMS Research now has dedicated analyst teams focused on the factory
automation, automotive, communications, computer, consumer, display, financial
& ID, LED & lighting, medical, power & energy, solar PV, smart grid
and security markets. Currently publishing over 350 different syndicated
report titles each year, these in-depth publications are used by major
electronics and industrial companies to assess market trends, solve marketing
problems, and improve the efficiency of their businesses.

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Guest greensolar

Completely agree with you, Hatred by US press is unbelievable. I'm wondering if US oil fear mongers get there way on tariffs are they going to send all US listed Solars to single digits...

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