Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Alternative energy -- Ignore unavailable to you. Want to Upgrade?

To: Jacob Snyder who wrote (7793)	4/13/2010 8:39:20 PM
From: Jacob Snyder	Read Replies (2) \| Respond to of 16955

3 issues for solar: First issue: There has been a lot of news recently, and an emerging consensus, that the Chinese currency is going to be revalued. Since a lot of solar companies have costs in Chinese money, and revenues mostly in Euros, a higher-valued currency will mean less profits. These companies are partly, but not fully, hedged against such changes in currency values. I'm not sure how this would effect manufacturers in Malaysia (FSLR) or Philippines (SPWRA). Second: there is a rising tide of economic nationalism. Every big new alt-energy project in the U.S. gets criticized if the equipment is manufactured in a foreign country (as it mostly is). I've read several articles saying: why should we exchange dependence on Saudi oil, for dependence on Chinese-made wind turbines and solar panels? Third: JASO recently said MW sold in 1Q10 will be higher than previous guidance. Good news, and the stock went up. But they said nothing about: 1. whether there will be a fall-off in demand in 2H10, which is what the market is worried about. 2. whether increased MW sold will translate into increased revenue. Many solar companies in 2009 saw increased MW sold, but the fall in ASP was so big, they ended up with lower revenues. 3. whether increased revenues means increased profits. Margins fell throughout 2009, due to overcapacity in the industry. A lot of capacity is being added in 2010 as well. 4. whether increased profits means increased EPS. Serial secondary share offerings can dilute increasing profits.