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I think he's referring to 2018 and their FY GM of 17.5% vs. original guidance of 22-23% in Dec. 2017.  I don't know all the reasons, they had some extra costs in Q4 to finish the projects on time, but that's only one of several reasons probably.

On a positive note revenue came very close to the lower end of guidance, EPS within the guidance range, and net cash above guidance.

However I think pointing out their GM miss is like searching for a hair in the soup, as they say in my country.  Good thing the CNs don't give you GM guidance because then you would find the whole wig in the soup.

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1 hour ago, Mark said:

Secondly, we are lowering our gross margin guidance by 50 basis points to a revised range of 19.5% to 20.5% as a result of higher expected ramp costs. Offsetting the decrease in gross margin is a $15 million reduction to start-up costs within our operating expense guidance. The increase in ramp costs and offsetting decrease in start-up costs are result of the earlier-than planned started production at our second Vietnam factory.

I was talking how they had guided 22.5% margins for 2018 initially. By the end they came in with 17.5. That is a 22% reduction in gross margins from original 2018 Guidance.

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2 hours ago, Klothilde said:

Also if CSIQ guides for a loss in Q1 then its share price could come down a little bit.  That could happen if module ASP drops significantly to 27 cents or so and if they have little revenue from projects.

"Aye, and if my grandmother had wheels, she'd be a wagon!"

You're saying a company's share price is likely to drop if they forecast a loss, which could happen if their sales fall.  Well, of course!  That's true for ANY company.  The point is you're saying "that COULD happen"--without assigning a likelihood to that event.  I can equally confidently prognosticate that their share price will rise if they guide for increased profits in Q1.  But what good is my forecast if I don't assign it a probability?

So, what do you think is the LIKELIHOOD CSIQ guides for a loss in Q1?  I know you were looking for it in the past.  Still think it'll happen?

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The thing is they haven't announced any project sales yet that will be recognized as revenue in Q1.   And we are already 2/3 into the quarter...

Now on the module side I don't see their Q1 ASP above 27 cts because mono-PERC has been selling at 26-27cts for quite a while now in the spot market and their multi-based modules have never quite reached the price level of mono-PERC.  Assuming an ASP of 27 cts, costs at 23 cts (ambitious!) and shipments of 1500MW you get a gross of $60M.  With OPEX & NI running at around $105M you still need a gross contribution of $45M from projects just to break even.  And so far I don't see the project volume that is necessary...

Do you understand my thinking?  We still have one month for things to unfold, but the above is already circling my mind.

But feel free to ask others what they think.  And with others I mean people who DO care about fundamentals.  Jus sayn'...

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1 hour ago, Klothilde said:

The thing is they haven't announced any project sales yet that will be recognized as revenue in Q1.   And we are already 2/3 into the quarter...

Now on the module side I don't see their Q1 ASP above 27 cts because mono-PERC has been selling at 26-27cts for quite a while now in the spot market and their multi-based modules have never quite reached the price level of mono-PERC.  Assuming an ASP of 27 cts, costs at 23 cts (ambitious!) and shipments of 1500MW you get a gross of $60M.  With OPEX & NI running at around $105M you still need a gross contribution of $45M from projects just to break even.  And so far I don't see the project volume that is necessary...

Do you understand my thinking?  We still have one month for things to unfold, but the above is already circling my mind.

But feel free to ask others what they think.  And with others I mean people who DO care about fundamentals.  Jus sayn'...

Q1 sales are generally announced near the end of Q1 or a couple weeks into Q2. They also are relying more and more on EPC contracted  work from projects they did sell in the past before completed.

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China lowering VAT taxes up to 3%. This should benefit solars with lower costs and higher profits

 

http://guangfu.bjx.com.cn/news/20190305/966772.shtml

Implementing a larger scale of tax cuts, inclusive tax cuts and structural tax cuts, focusing on reducing the tax burden on manufacturing and small and micro enterprises, deepening the VAT reform, and reducing the current 16% tax rate in industries such as manufacturing by 13%. The current 10% tax rate for the transportation industry and construction industry will be reduced to 9% to ensure that the tax burden of major industries will be significantly reduced; the tax rate of 6% will remain unchanged, but tax will be increased or decreased by adopting production and living service industries. Deductible and other supporting measures to ensure that the tax burden of all industries is only reduced.

In recent years, thanks to the support of policies, renewable energy represented by photovoltaics has been rapidly developed and its role in energy structure adjustment has become more and more important. However, for a long time, the photovoltaic industry has always belonged to the heavy asset industry, and the capital requirements of the enterprise itself are high. The heavy burden of taxes and fees, as well as the difficulty of financing and financing, have become the main reasons that hinder the industry from subsidies and real-time market access under real market conditions.

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8 hours ago, Klothilde said:

Now this is interesting:

GCL-Poly developing peroskite solar cells
https://www.digitimes.com/news/a20190305PD213.html

I wonder what the lifespan and degradation of the module will be. That has been an issue with Peroskite technology. If it pushes 20- years.

 

C'est La Vie to FSLR and S6 competitiveness :)

 

"Production cost for such PV modules is estimated at below CNY1 (US$0.15)/W and is likely to decrease to CNY0.7/W, GCL-Poly noted."

 

 

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If you were wondering why JKS has dumped, patent infringement cases filed against Jinko and Longi and the REC Group by QCells for stealing and using their patented quantum technology. They are trying to block them from the US and European Union markets among others.

 

https://pv-magazine-usa.com/2019/03/05/hanwha-q-cells-sues-jinko-longi-and-rec-for-patent-infringement/

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11 hours ago, SCSolar said:

C'est La Vie to FSLR and S6 competitiveness :)

Luckily GCL has a track record of fuc*ing up things (e.g. FBR), so I'm not overly worried at this point.  I don't think this will happen overnight, and besides CdTe is set to put up a good fight as well.

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11 hours ago, Klothilde said:

Luckily GCL has a track record of fuc*ing up things (e.g. FBR), so I'm not overly worried at this point.  I don't think this will happen overnight, and besides CdTe is set to put up a good fight as well.

I say a cost to build a complete module under  $0.11 is interesting. It should tell you were the costs of lamination is headed in the next few years.

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58 minutes ago, Klothilde said:

Interesting read in the wafer and cell comments. It goes to show that the rush to high efficiency higher margins products in production can have issues with price imbalance and supply vs demand.

 

Right now the Ultra high efficiency modules have a price spread per watt of 25% or over 4 cents  on the cells price from legacy mono.

 

The Ultra High efficiency is 45% more expensive than Multi cells.

 

It is hard with these spreads to entice buyers with the suggestion  that there is a cost benefit analysis at these price spreads.

 

It also gives suggestions as to  why Tongwei would lowered the Mono Perc products price at the end of February. Those prices need to fall further based on the price spread differences. 

 

https://www.digitimes.com/news/a20190227PD214.html

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I recall reading that the recent rise in mono-PERC cell prices had to do with deadlines for the top runner program but I don't know what the timing was exactly.  Regardless, it looks like the margins for high efficiency are coming down again.  According to this digitimes article there will be 130GW of PERC cell capacity installed by year end:
https://www.digitimes.com/news/a20190305PD218.html

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Good Lord the weekly commentary at the three price index sites (pvinsights, energytrend, pvinfolink) have all turned bearish.  I can handle one or two, but three is too much.
"...In terms of the subsequent overall market trend, in the next 1-2 months, the market will enter into the first low season of this year..."
https://www.energytrend.com/pricequotes/20190314-13519.html
https://www.pvinfolink.com/post-view.php?ID=208
http://pvinsights.com/

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46 minutes ago, Klothilde said:

Good Lord the weekly commentary at the three price index sites (pvinsights, energytrend, pvinfolink) have all turned bearish.  I can handle one or two, but three is too much.
"...In terms of the subsequent overall market trend, in the next 1-2 months, the market will enter into the first low season of this year..."
https://www.energytrend.com/pricequotes/20190314-13519.html
https://www.pvinfolink.com/post-view.php?ID=208
http://pvinsights.com/

Lets not forget most of those contracts that elevated the prices in 2018 for Jinko and CSIQ in the later half of 2018 are gone. New contracts from July on are at much lower ASPs globally. That would suggest margins will go down through the year.

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47 minutes ago, Mark said:

80% PV subsidy cut from last year?

https://www.digitimes.com/news/a20190320PD207.html

This news is old, from February 19... http://guangfu.bjx.com.cn/news/20190219/963637.shtml

Actual subsidy cut was on May 31/2018... In 2019 - 3 bln help ($448 mln) - is actually increase in subsidies after May 31/2018 disaster... 

Headline is misleading....

Edited by MVA

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Looks like we're just in another of these selling waves that happen every so often.  Nothing to be done but ride it out.

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2 hours ago, MVA said:

It was always a strong signal to buy, when he (hoium) issued his "articles"... Proved by time.

Yes, and here he seems to be confusing margins with profits.  Margins are narrow, and will continue to be so (at least for the straight panel producers--wafers, cells, and panels are now commodities).  That's why everyone wants to increase volume--it's the only way to increase profits.  But with demand expected to pick up by 3Q 19, those increased volumes in the second half of the year should drive increased profits, even if margins remain the same.

Things can change in a hurry, including for the better.  Remember all the doom-and-gloom forecasts when China changed its internal policy last May.  Now we find out last year, in total, wasn't bad at all.

Isn't China supposed to officially announce something about a renewed internal subsidy soon?  THAT should certainly raise expectations, when it happens.

This is just one more installment of the swing between "solar will become ubiquitous and save the world" and "every single solar company is going to go broke tomorrow."  I've already entered some new trading positions at attractive prices over the past few days, and I'm prepared to enter a few more if this downturn continues.  Best of luck to everyone else on their trading as well!

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6 hours ago, solarpete said:

...But with demand expected to pick up by 3Q 19, those increased volumes in the second half of the year should drive increased profits, even if margins remain the same...

So can you specify which company should see increased profits in 2019?  CSIQ?  DQ? JKS? FSLR?

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