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1 hour ago, Klothilde said:

Happy new year to y'all 😊

From this article I'm getting a vibe that U.S. utility demand will be humongous over the next years.  That bodes well for FSLR:
https://pv-magazine-usa.com/2019/01/01/solar-tsunami/

It bodes well for all solar manufacturers.  Slowly but surely, the drop in prices is building the groundswell across the globe.

Of course, it's best for high-margin manufacturers.

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GCL forecasting a loss of RMB534M ($77.6) for the first 10 months:
https://www.pv-magazine.com/2019/01/02/gcl-poly-plans-to-sell-wafer-unit-expects-77-6-million-loss-for-first-10-months-of-2018/

Given they had a net profit of RMB382M in H1 this points to tectonic or monumental losses in Q3, with negative GMs for wafers according to my crystal ball.  I expect some of these losses to be passed on downwards to module makers over the next quarters as spreads narrow in the downstream.  But that's just me.
http://gcl-poly.todayir.com/attachment/201809131006111736194589_en.pdf

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New year, same old Klothilde (chuckle).  As usual, you have to take her headlines with a grain of salt.

The article says they're shifting manufacturing from high-cost to low-cost locations.  So while they're selling one unit, they're actually building another one, because they intend to "maintain production capacity".  Not the attitude of a company expecting to go belly-up any time soon.  Also, this shift is expected to "greatly improve" their profitability next year.  Finally, last year's losses were partly due to increased finance costs and exchange losses, as well as lower wafer ASPs.  While lower ASPs are industry-wide, the other two factors are company-specific.

So yes, last year was challenging.  But they see brighter days ahead.

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Actually the PR states that "...The Company intends to use the net proceeds from the Disposal for working capital purposes..."  Working Capital is the money you need to keep the day-to-day business running, a.o. to keep inventory and extend customer credit.  Chances are they are burning cash and they have liquidity issues.  But that's just me thinking out loud here.
http://www3.hkexnews.hk/listedco/listconews/SEHK/2018/1228/LTN201812281325.pdf

However this comes at no surprise imo.  Does anybody remember Daqo disposing of their loss-making wafering unit?  Just connect the dots then.  And this will come back to haunt JKS and CSIQ as well, trust me, because they invested in significant poly wafer capacity.  Bummer.

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53 minutes ago, Klothilde said:

Actually the PR states that "...The Company intends to use the net proceeds from the Disposal for working capital purposes..."  Working Capital is the money you need to keep the day-to-day business running, a.o. to keep inventory and extend customer credit.  Chances are they are burning cash and they have liquidity issues.  But that's just me thinking out loud here.
http://www3.hkexnews.hk/listedco/listconews/SEHK/2018/1228/LTN201812281325.pdf

However this comes at no surprise imo.  Does anybody remember Daqo disposing of their loss-making wafering unit?  Just connect the dots then.  And this will come back to haunt JKS and CSIQ as well, trust me, because they invested in significant poly wafer capacity.  Bummer.

 It should be no surprise that the company is shifting manufacturing and technology to low cost manufacturing (i.e. low electricity)  areas. This aids in wafering as well as poly costs. Both are heavy on electricity costs. They will be taking write downs on the non performing asset sales. They will be using the proceeds of said sales to re-invest in operations. What looks more discerning is the failed asset sales of the polysilicon plant. That suggests nobody wants to buy non cost competitive plants knowing their is no viable way to make it cost competitive. This will lead to significant future write downs by GCL for non performing assets. This will not impact Daqo as significantly as the massive GCL capacity.

 

What is of note is that they are now moving into "mono like" wafering technology. This is not an abandonment from wafering which is what Daqo did. This is a shift in technology. What it is, is basically mono casting. They are trying to squeeze lifespan out of their large investments in the DSS furnaces. This is while they are moving into Mono wafers using CCz/RCz technology.

 

As for JKS, they have not been adding multi wafering capacity for several years. Instead they had been outsourcing the wafering to others. JKS has been ramping mono significantly the past year plus while only optimizing their legacy multi capacity. CSIQ is a different story as they have decided to ramp significantly their multi half cell wafering technology. That technology may have a short  lifespan window as the market shifts to mono over the next several years. I would note that multi is not going to disappear any time soon(next 5 years). The market however is likely to shrink from the 50+GW demand to 10-20GW in the next few years. Depending on costs CSIQ should have reasonable markets for this current generation of products.

 

This article from November gives  a good market overview. The end covers a nice discussion on GCL wafering dilemma. It also indicates that GCL Sun Edison FBR acquisitions has many benefits  towards improvements in CCz technology that allows for lower temperature melting and doping.

 

https://www.pv-magazine.com/2018/11/24/the-weekend-read-secrets-of-monocrystalline-silicon/

"But this may only be the beginning. GCL has a massive stock of directional solidification system (DSS) furnaces to make multicrystalline ingots, and if multi loses too much market share, they could become stranded assets. One solution for GCL has been to grow single-crystal ingots in its existing DSS furnaces to create “mono-like” wafers. However researchers note that it is challenging to keep the monocrystalline structure as the ingot grows, resulting in more waste and less efficiency. GCL states that it is pursuing a “dual-track” strategy of both mono and multi, the former in collaboration with Zhonghuan Semiconductor, which has been the second-largest mono ingot and wafer maker and which, like Longi, has grown rapidly over the past few years."

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5 hours ago, Klothilde said:

Actually the PR states that "...The Company intends to use the net proceeds from the Disposal for working capital purposes..." 

The article states:

"The company said the transaction [the sale] is part of its plan to maintain production capacity with fewer wafer manufacturing facilities....  The plan is intended to support construction of a 60,000 tonne polysilicon production plant in Qitai county, in China's remote Xinjiang region which, according to the company, has now started trial production."

There's enough disinformation in our public discourse these days.  Let's keep it out of this board.

 

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6 hours ago, SCSolar said:

As for JKS, they have not been adding multi wafering capacity for several years. Instead they had been outsourcing the wafering to others. JKS has been ramping mono significantly the past year plus while only optimizing their legacy multi capacity. CSIQ is a different story as they have decided to ramp significantly their multi half cell wafering technology. That technology may have a short  lifespan window as the market shifts to mono over the next several years. I would note that multi is not going to disappear any time soon(next 5 years). The market however is likely to shrink from the 50+GW demand to 10-20GW in the next few years. Depending on costs CSIQ should have reasonable markets for this current generation of products.

The way I see it Longi has made all other Si technologies other than mono obsolete and nonviable.  The more a company is into technologies other than mono the more shagged the company is.  I believe CSIQ is in deeper trouble than JKS with 100% multi wafer capa vs. 40%.  All their fancy HuKuDoopu "innovations" won't help them from succumbing to mono in the end.

The reason is super simple: at the system level mono provides more than 2 cts/W higher value than multi.  Means that multi wafers need to be sold at a discount of roughly 2 cts/W compared to mono.  Problem is Longi can sell mono wafers profitably for 7.5 cts/W but the multi makers cannot go down to 5.5 cts/W without incurring humongous losses.

It will be extremely interesting to see how CSIQ will deal with this.  I firmly believe their module business will go down the crapper sooner than later because they won't be able to compete with mono.

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On 1/3/2019 at 6:31 PM, Klothilde said:

The way I see it Longi has made all other Si technologies other than mono obsolete and nonviable.  The more a company is into technologies other than mono the more shagged the company is.  I believe CSIQ is in deeper trouble than JKS with 100% multi wafer capa vs. 40%.  All their fancy HuKuDoopu "innovations" won't help them from succumbing to mono in the end.

The reason is super simple: at the system level mono provides more than 2 cts/W higher value than multi.  Means that multi wafers need to be sold at a discount of roughly 2 cts/W compared to mono.  Problem is Longi can sell mono wafers profitably for 7.5 cts/W but the multi makers cannot go down to 5.5 cts/W without incurring humongous losses.

 It will be extremely interesting to see how CSIQ will deal with this.  I firmly believe their module business will go down the crapper sooner than later because they won't be able to compete with mono.

Are mono / poly technologies all that different?  Isn't it just a matter of wiring together wafers?  Or is a bunch of CSIQ's biz making poly wafers?

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On 1/4/2019 at 12:40 PM, sunnypease said:

Are mono / poly technologies all that different?  Isn't it just a matter of wiring together wafers?  Or is a bunch of CSIQ's biz making poly wafers?

That all depends on your level of integration and where you have invested your money in the technology and  manufacturing food chain. 

 There was a poster a long time ago that said CSIQ business model of simply buying cells and slapping them into modules was not good. He indicated that they were missing the boat on all the profits. He pointed to Trina as a model of success due to their  technology and vertical integration of making their own wafers and cells. 

 

 A company that invested in early technology for Multi, has had to write off the furnaces as they became larger and larger to handle bigger and bigger crucibles. They had to invest millions upon millions in RnD research as LDK once did. I also remember Renesola divested itself of the 150MW of Mono capacity to focus on Multi wafering because that was the cost effective technology. The old technology of mono was not cost competitive.

 

So it really all depends, if you are module maker that only buys cells, there is little cost and little to change from mono or multi. If you are a wafer to module manufacturer that is another story as the technology will without a doubt change every few years. CSIQ was strictly module at one point, then they bought into some cell capacity, now with their new multi half cells they are dumping in 5GW of wafering capability.

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On ‎1‎/‎5‎/‎2019 at 6:02 AM, Klothilde said:

Is energytrend suggesting flattish global demand over the next years or does this gal need new glasses?

Whatever happened to grid parody and demand explosion?

https://www.energytrend.com/research/20190103-12956.html

What growth numbers would make you happy?

The article says 2018 was not as bad as expected--newly added PV capacity GREW by 4.9% YoY, when in spring (when the new China policy was first announced) everyone was predicting declines. 

For 2019, the article predicts FURTHER GROWTH of 7.7% YoY.

It's not double-digit growth, but it's in the face of the continued US-China trade war, and continued US efforts to slow renewables deployment, at least at the federal level.

I'll take that forecast over last spring's any day....

Grid parity is a gradual process, happening at different times in different places.  It's not a sudden global transition.  It's already happened in my part of the US (the southwest).  Utilities that used to refuse to even discuss the possibility of building solar and wind facilities are now shutting down coal plants early and replacing them with solar and wind.

It looks like we're on a slow and steady uptrend at this point.  That brings predictability, which markets usually like.  I prefer that over the boom-and-bust cycles of the past.

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1 hour ago, solarpete said:

What growth numbers would make you happy?

The ones Daqo put out in August:
"...According to industrial forecasts, global solar installations are expected to reach 95 to 105 gigawatts for 2018. With lower and more competitive PV prices, the global solar installation could reach 120 to 140 gigawatts in 2019 and 140 to 160 gigawatts in 2020. At Daqo New Energy, we are confident in the long-term sustainable growth of the polysilicon industry..."
https://seekingalpha.com/article/4195800-daqo-new-energys-dq-ceo-longgen-zhang-q2-2018-results-earnings-call-transcript?part=single

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16 minutes ago, Klothilde said:

The ones Daqo put out in August:
"...According to industrial forecasts, global solar installations are expected to reach 95 to 105 gigawatts for 2018. With lower and more competitive PV prices, the global solar installation could reach 120 to 140 gigawatts in 2019 and 140 to 160 gigawatts in 2020. At Daqo New Energy, we are confident in the long-term sustainable growth of the polysilicon industry..."
https://seekingalpha.com/article/4195800-daqo-new-energys-dq-ceo-longgen-zhang-q2-2018-results-earnings-call-transcript?part=single

Fair enough.  DQ's numbers ARE rosy compared to the energytrend ones (the energytrend article predicts 111 GW in 2019).

But as has previously been noted on this forum, past forecasts have been overly negative.  It's not that large a spread from 111 to 120 (the lower end of the DQ range).  I would not be at all surprised to see 2019 turn in a performance around 120 GW.  (140--now that's a stretch.)

Finally, the overall outlook painted by the energytrend article is quite positive.  I especially liked this bit (from Trend #3 in the article):

"Although the whole PV supply chain suffered from low margin and oversupply in 2018, the Tier 1 companies still reported strong operating results driven by their advanced technology, competitive cost structure, and wide coverage.  Most of their capacity expansion plans can still be put into practice."

Sounds good to me!

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A New York-based legal practice is preparing a class-action lawsuit on behalf of shareholders in the formerly Nasdaq-listed Chinese solar company JA Solar.

https://www.pv-magazine.com/2019/01/07/law-firm-says-ja-solars-nasdaq-stockholders-were-left-out-of-pocket-by-backdoor-listing-in-shenzhen/

Let it be a good lesson for you - Mr. Qu (CSIQ)!!!!!!!!!!!!!!!!!!!!!!

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2 hours ago, MVA said:

A New York-based legal practice is preparing a class-action lawsuit on behalf of shareholders in the formerly Nasdaq-listed Chinese solar company JA Solar.

https://www.pv-magazine.com/2019/01/07/law-firm-says-ja-solars-nasdaq-stockholders-were-left-out-of-pocket-by-backdoor-listing-in-shenzhen/

Let it be a good lesson for you - Mr. Qu (CSIQ)!!!!!!!!!!!!!!!!!!!!!!

While I understand (and, as a former [albeit small] JASO stockholder, share) the sentiment, I wouldn't put too much stock into this announcement (pun intended).  First, since the guilty parties are all in China, I don't know if a US court has any jurisdiction over them.  Second, Pomerantz are ambulance chasers.  I've seen their name in dozens of headlines.  A company will announce bad news one day, and the next half a dozen of these guys all announce lawsuits, including Pomerantz.  I have never once heard of such a suit actually being successful.

So this may be a Pyrrhic victory at best....

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17 hours ago, solarpete said:

While I understand (and, as a former [albeit small] JASO stockholder, share) the sentiment, I wouldn't put too much stock into this announcement (pun intended).  First, since the guilty parties are all in China, I don't know if a US court has any jurisdiction over them.  Second, Pomerantz are ambulance chasers.  I've seen their name in dozens of headlines.  A company will announce bad news one day, and the next half a dozen of these guys all announce lawsuits, including Pomerantz.  I have never once heard of such a suit actually being successful.

So this may be a Pyrrhic victory at best....

Another NY legal firm files class action against JA Solar

https://www.pv-magazine.com/2019/01/08/another-ny-legal-firm-files-class-action-against-ja-solar/

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And you'll probably see still more.  I've seen up to half a dozen in one day.  But never any follow-up that anyone was actually held accountable.

I HAVE received small settlement checks from class action lawsuits in the past, but not from any that were splashed across the headlines like this.  The amounts were tiny (a few cents per share), and the settlements explicitly said the company did not admit any wrongdoing, which meant no company officers faced any retribution.

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1 minute ago, solarpete said:

And you'll probably see still more.  I've seen up to half a dozen in one day.  But never any follow-up that anyone was actually held accountable.

I HAVE received small settlement checks from class action lawsuits in the past, but not from any that were splashed across the headlines like this.  The amounts were tiny (a few cents per share), and the settlements explicitly said the company did not admit any wrongdoing, which meant no company officers faced any retribution.

Yep, the only people that make money on these are the lawyers.

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22 minutes ago, solarpete said:

And you'll probably see still more.  I've seen up to half a dozen in one day.  But never any follow-up that anyone was actually held accountable.

I HAVE received small settlement checks from class action lawsuits in the past, but not from any that were splashed across the headlines like this.  The amounts were tiny (a few cents per share), and the settlements explicitly said the company did not admit any wrongdoing, which meant no company officers faced any retribution.

I was never JA Solar investor, and I don't care about any settlements. I see in this a great signal to Dr.Qu, that image of his company can be damaged, in case of such class actions. And those, like me, who follow CSIQ for 5 years or more knows very well that Qu cherishes very much his personal and his company's reputation...

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It's a question of what Qu values more:  his reputation or his wallet.  I'm sure the JA Solar company officers made a killing with their move.  Now I sincerely hope Qu does NOT try the same thing (I'd lose a chunk of change on the shares I still hold from higher prices), but I'm actually surprised he didn't follow through on his rather weak effort last year.  The temptation is certainly there.  Let's hope Qu's pride continues to overrule his greed.  But I've learned most of the time, in situations like this, greed eventually wins.

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