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For all the hoopla of the falling ASP and some stating companies are selling at cash cost, this appears not to be the case for Tonwei. The analaysis of the Full year guidance indicaes they are profitable but at thelow end of guidance.

 

https://www.pv-tech.org/news/tongweis-financial-performance-in-2018-capped-by-asp-declines

 

The company had previously reported a net profit for the first nine months of 2018 of RMB 1.659 billion, indicating fourth quarter net profit could be around RMB 454 million at the low point of guidance. Net profit in the fourth quarter of 2017 was RMB 483.5 million.
 

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37 minutes ago, Klothilde said:

Thanks for pointing that out.  I dug in the 20F and frankly it blows my mind how such a shareholder rape is possible in this day and age.  They ran away with the projects and offloaded the complete risk on JKS shareholders.  Never saw something like that.

"...In connection with the Company’s disposal of JinkoSolar Power downstream business in 2016, the Group entered into a master service agreement with Jiangxi Jinko Engineering under which the Group agreed to provide a guarantee for Jiangxi Jinko Engineering’s financing obligations under its separate loan agreements. In the event that Jiangxi Jinko Engineering fails to perform its obligations under the loan agreements or otherwise defaults thereunder, the Company will become liable for Jiangxi Jinko Engineering’s obligations under the loan agreements, which amounted to RMB5.84 billion (US$897.9 million) as of December 31, 2017. The Company will charge Jiangxi Jinko Engineering service fees for the debt payment guarantee service according the master service agreement..."
http://ir.jinkosolar.com/static-files/7541fdc2-0cda-4676-8daa-5f2e351b24d3

I believe at the time of the spinoff they had only something like 125MW of their 1GW plus in the catalog. The next catalog that came out I believe after the spinoff should have added about 300-400MW more leaving some 800MW not in the catalog. Then of course there is the GW or so a year they were adding after the spinoff that would not be in the catalog. Those post spinoff projects were funded by modules being sold by Jinko with little or no payment down. Those modules are now AR's and notess receivables. Some of the "revenues and profits" from Jinko are from those sales to Jinko New Energy which are at risk of default as well. The CEO is using JKS to float his spinoff.  I do not trust Jinko Chairman to have the shareholders interest at heart.

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23 minutes ago, SCSolar said:

I believe at the time of the spinoff they had only something like 125MW of their 1GW plus in the catalog. The next catalog that came out I believe after the spinoff should have added about 300-400MW more leaving some 800MW not in the catalog. Then of course there is the GW or so a year they were adding after the spinoff that would not be in the catalog. Those post spinoff projects were funded by modules being sold by Jinko with little or no payment down. Those modules are now AR's and notess receivables. Some of the "revenues and profits" from Jinko are from those sales to Jinko New Energy which are at risk of default as well. The CEO is using JKS to float his spinoff.  I do not trust Jinko Chairman to have the shareholders interest at heart.

Coincidentally today guangfu is reporting that Jinko Power's IPO in China was suspended (however not 100% sure if I got that right due to translation).  Looks like they were counting on those funds to pay off some debt.  The prospectus points to tight liquidity with interest payments surpassing net income.  Maybe the JKS people can shed further light on what's going on here.
http://guangfu.bjx.com.cn/news/20190124/959002.shtml
https://www.caixinglobal.com/2019-01-08/jinko-powers-listing-highlights-solars-shift-from-panels-to-plants-101367753.html

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And DQ is recovering as well, up day after day on higher than average volume.  I haven't seen any news, but it sure looks like someone is building a position.

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6 minutes ago, solarpete said:

And DQ is recovering as well, up day after day on higher than average volume.  I haven't seen any news, but it sure looks like someone is building a position.

Here is a news: China ready to set 3 GW quota for residential solar in 2019

https://www.pv-magazine.com/2019/01/24/china-ready-to-set-3-gw-quota-for-residential-solar-in-2019/

Edited by MVA
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7 hours ago, Klothilde said:

Coincidentally today guangfu is reporting that Jinko Power's IPO in China was suspended (however not 100% sure if I got that right due to translation).  Looks like they were counting on those funds to pay off some debt.  The prospectus points to tight liquidity with interest payments surpassing net income.  Maybe the JKS people can shed further light on what's going on here.
http://guangfu.bjx.com.cn/news/20190124/959002.shtml
https://www.caixinglobal.com/2019-01-08/jinko-powers-listing-highlights-solars-shift-from-panels-to-plants-101367753.html

The way I read the article is they are canceling a Bond offering for 2 Billion RMB they initiated last year. They are starting an IPO listtng and hoping to raise 2.5Billion RMB. They do indicate cash flow issues due to high debt loads and interest.

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3 hours ago, SolarRoof said:

SWEET!!!!  So prices are expected to rise, while everyone keeps cutting costs.  Means margins will inflate.  And with over 100 GW being installed worldwide year after year, volume is no problem.  Good volume + increasing margins = good profit growth!  Could we finally be on the verge of turning the corner--permanently?!

The optimism in this article certainly explains the rise in share prices we've seen across the board recently.  Think I'll keep my still-underwater positions in CSIQ, JKS, and DQ a bit longer.

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12 hours ago, solarpete said:

SWEET!!!!  So prices are expected to rise, while everyone keeps cutting costs.  Means margins will inflate.  And with over 100 GW being installed worldwide year after year, volume is no problem.  Good volume + increasing margins = good profit growth!  Could we finally be on the verge of turning the corner--permanently?!

The optimism in this article certainly explains the rise in share prices we've seen across the board recently.  Think I'll keep my still-underwater positions in CSIQ, JKS, and DQ a bit longer.

I am not certain how this will impact JKS CSIQ and DQ. JKS ASP has been higher than the spot prices by 15-20%. That is in part due to ramping mono Perc and shipping overseas(U.S) as well as the legacy contracts signed for last years shipments a year earlier. Those contracts are being removed so their overall ASP has the potential of falling more than reported. At the current elevated ASP they are basically not profitable to start without adjustments and subsidies.  

If DQ is getting a 10% markup, then this is bad for JKS and CSIQ as it means their input costs go up for Silicon to Cells that they buy. JKS also buys massive amount of finished modules from 3rd parties. This means that JKS costs are going to rise while they still have  exposure to further module ASP decline QonQ due to expiring old contracts from 2018.

 

 CSIQ has been high margins in part due to lower input costs and a higher ASP driven from their projects and Japan business. Their input costs are going to rise as well along with the ASP. I would expect them to be neutrally impacted from the rise of ASP.

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On 1/24/2019 at 8:44 AM, SolarRoof said:

I sold JKS today on the bump after getting in in the 8's.  Prob luck more than anything. 

Guess I sold a day too early...

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Congrats to CN Solar holders! JKS up 115% and CSIQ up 70% since their 52 week lows.

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3 hours ago, explo said:

Congrats to CN Solar holders! JKS up 115% and CSIQ up 70% since their 52 week lows.

Yes congrats to those that hold CSIQ and JKS.

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On 1/24/2019 at 1:27 PM, SCSolar said:

For all the hoopla of the falling ASP and some stating companies are selling at cash cost, this appears not to be the case for Tonwei. The analaysis of the Full year guidance indicaes they are profitable but at thelow end of guidance.

 

https://www.pv-tech.org/news/tongweis-financial-performance-in-2018-capped-by-asp-declines

 

The company had previously reported a net profit for the first nine months of 2018 of RMB 1.659 billion, indicating fourth quarter net profit could be around RMB 454 million at the low point of guidance. Net profit in the fourth quarter of 2017 was RMB 483.5 million.
 

Those numbers refer to the Tongwei comglomerate, i.e. more to fish feed than to PV.
https://www.morningstar.com/stocks/XSHG/600438/quote.html

If you want less fishy numbers for PV in Q4 I suggest looking at GCL poly's performance or waiting until JKS's or CSIQ's (modules) numbers come out.

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On 1/25/2019 at 1:17 PM, Mark said:

"...The amount will slump 81.6% from subsidies totaling CNY16.3 billion in 2018, the reports from China said, adding if the cut materializes, total PV installations completed in 2019 and entitled to FIT-based subsidization are estimated at 15-25GWp in total..."

Quite a disconnect from some of the bullish forecasts of 120GW+ of global  installations that we've seen recently.  I guess the picture is not clear yet for anybody...

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20 hours ago, SolarRoof said:

Don't forget ENPH, up 350% and just getting started.

Yes that’s been a wild one.

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3 hours ago, Klothilde said:

"...The amount will slump 81.6% from subsidies totaling CNY16.3 billion in 2018, the reports from China said, adding if the cut materializes, total PV installations completed in 2019 and entitled to FIT-based subsidization are estimated at 15-25GWp in total..."

Quite a disconnect from some of the bullish forecasts of 120GW+ of global  installations that we've seen recently.  I guess the picture is not clear yet for anybody...

15-25 GWp - this is only what entitled to FIT-based subsidization. Add to these numbers GWps installed based on China subsidy-free program, where under new plans, all relevant bodies will be asked to clear obstacles for those projects that can undercut coal (coal-fired benchmark on-grid price). So, overall we can easily reach 45-55 GWp range in 2019...

https://www.pv-tech.org/news/china-reveals-new-subsidy-free-solar-and-wind-policy

... And the phrase: "The amount will slump 81.6% from subsidies totaling CNY16.3 billion in 2018" ... - is ridiculous!!! On May 31/2018 - China canceled ALL subsidies... And now, in 2019, we have both incentives: Bureaucracy-free help and FIT stimulus - which is much, much better!!!!!!!!!!!! than situation in the second half of 2018... 

 

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Wow, I just read an article on what could happen in a PG&E bankruptcy and re-organization to those that have PPA agreements with them. It suggests that PG&E has an average PPA of $140/MWhr and that it could be adjusted to current market rates of $32/KG. That would screw over the owners of the projects.

 

All those Yieldcos from a few years back, may have just gotten a lot more riskier. This would also make difficult to find buyers of current projects in the works as it is now a risk  if the PPA you are trying to sell today, may be reduced in court in the future.

 

https://www.renewableenergyworld.com/articles/2019/01/how-will-pges-bankruptcy-impact-the-cleantech-industry.html

 

What about PG&E’s power purchase agreements (“PPA”) and other contractual obligations?  

Contracts to provide services, such as PG&E’s contracts with Community Choice Aggregators (“CCAs”) to collect and remit money from customers for the power CCA’s supply to customers are one area to watch during the bankruptcy proceeding.  The CCAs are concerned about ensuring that all money PG&E collects on their behalf from customers is regularly remitted to them.  In general, however, this is mostly seen as a pass through that will likely not be affected by the proceeding.  It is thought there will likely be no substantial affect, but collections could slow if staffing is reduced leaving fewer people available to process paperwork.

In regard to solar and wind energy suppliers, the bankruptcy court could allow PG&E to renegotiate any contracts where developers are selling energy for prices higher than today’s renewable energy project prices.  PG&E’s current weighted average solar PV PPA price is approximately $140/MW-HR.  The current solar PV PPA signed today is priced at $32.5/MW-HR.  Renegotiating past contracts at today’s prices would save PG&E approximately $2.2 billion per year.  If this occurs, the impacts would likely include significant losses to investors in renewable energy projects, increased costs of building new renewable energy projects, credit rating downgrades of existing solar and wind projects, and project developers and investors absorbing losses of renegotiated PPAs by raising prices on new projects.  However, whether legacy PPAs can be renegotiated in bankruptcy to fund creditors is uncertain.  For example, it is an open question still being decided on a state-by-state and federal level as to whether a bankrupt utility can breach a money losing PPA or re-negotiate a solar PPA signed at a historically high price and replace it with a current market competitive solar PPA. 

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If the rest of the world tracks Indias goals, the solar will increase 3 fold in the next decade. Estimates of a total of  350GW to be installed in India by 2028. They are looking at 30GW a year average. Imagine this would have global solar installing over 300GW a year by 2028. That is an average 12.5% annual growth rate over the next decade

 

https://www.pv-magazine.com/2019/01/08/india-will-tender-500-gw-renewable-capacity-by-2028/

 

To achieve its goal of generating 40 per cent of electricity from non-fossil fuels by 2030, India would have to install 500 GW of renewable energy generation capacity by 2028, according to Anand Kumar, Secretary of the Ministry of New and Renewable Energy, who was speaking at the India-Norway Business Summit 2019 which opened yesterday in New Delhi.

Of those 500 GW, 350 GW would be solar, 140 GW wind, and the remaining generation capacity would come from small hydro and biomass power.

 

 

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Cost to build getting lower and lower. The winning bids in China solar projects at 4.32Yuan or $0.64/watt to build.

http://guangfu.bjx.com.cn/news/20190116/956941.shtml

 

According to the publicity document, the winner of the bidding candidate is the consortium of China Electric Power Engineering Consulting Group Northwest Electric Power Design Institute Co., Ltd. and China Nuclear Industry Ersan Construction Co., Ltd. The bid price is 2.163307928 billion yuan, and the average bid price is about 4.32 yuan. /watt.

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