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To: Eric who wrote (167)	8/2/2008 5:23:19 PM
From: Sailtrader	Read Replies (1) \| Respond to of 230

Not sure the following applies directly to FSLR, but I found it very interesting. 'Major discovery' from MIT primed to unleash solar revolution; scientists mimic essence of plants' energy storage system. web.mit.edu

To: Eric who wrote (167)	8/3/2008 6:09:38 PM
From: Eric	Read Replies (1) \| Respond to of 230

First Solar upgraded yesterday Aug 2nd at S & P from Neutral to Buy. Highlights "We expect sales to rise 140% in 2008, followed by an 83% gain in 2009.We see most of these increases coming from a further rise in the volume of solar modules sold by FSLR, driven largely by the company's ongoing expansion of capacity. FSLR's German plants were to be at full capacity for the full 2008 period, with its first Malaysian plant starting production as of April 2008, and slated to reach full capacity in the third quarter; it expected to have all four of the Malaysian plants it was putting up at full capacity by the end of 2009. To a lesser extent, we anticipate production being lifted by improved module production throughput and higher conversion efficiencies. We see net margins widening in both 2008 and 2009, on expected further declines in per-watt production costs.We also expect margins to be aided by ongoing improvement in production efficiencies and economies of scale, as the company's production base expands.We see these factors being partly offset by our outlook for higher plant start-up expenses. After deriving all but 9% of its sales in Germany in 2007, FSLR expected a much larger proportion from other nations in subsequent years. Investment Rationale/Risk We expect FSLR to record substantial profit growth over the next few years, as we believe that demand will remain strong for alternative energy sources.We also think it will be a leader in the area of solar modules made from thin film technology, which uses far less silicon in its production process than other solar technologies. Based on these factors and our valuation model, we view the shares as undervalued. Risks to our recommendation and target price include potential inefficient execution of FSLR's aggressive capacity expansion plan, and a high degree of competition. The stock recently traded at about 41X our 2009 EPS forecast.We believe First Solar merits a premium valuation, based on our outlook for very strong EPS growth in coming years and our view of the company as a leader in bringing out a solar energy product with lower production costs.We also view FSLR as an extremely risky investment in the event of any disappointments. Yet, with FSLR's forward P/E multiple only 0.5X our current three-year compound annual EPS growth forecast, we think a higher valuation is merited. Our 12-month target price is $375, or about 54X our 2009 EPS projection."