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

To: Jacob Snyder who wrote (9238)	11/1/2010 11:01:48 PM
From: Sam	Read Replies (2) \| Respond to of 16955

Jinko Solar Blows Out Views, Outlook On Monday November 1, 2010, 7:06 pm EDT finance.yahoo.com China hotshot Jinko Solar (NYSE:JKS - News) catapulted 17% to a new high Monday, after releasing blowout Q3 results and guidance before the market open. Revenue soared 261% from a year ago to $215 million, trouncing Wall Street's view for $153.3 million. Gross profit jumped from $9.3 million to $72 million, working out to earnings of $1.75 per American depositary receipt. Gross margin more than doubled to 33.5%. Jinko makes silicon-based solar wafers, cells and modules. Demand for solar energy products has zoomed lately, but Jinko's growth is exceptional. The Brightest Star While already a low-cost player, Jinko has been driving down expenses further. It is also doing brisk business selling finished solar modules — not just parts for other companies to use. Jinko has also nailed down deals for 2011, when industry demand is seen waning. "We continued our transition from a wafer manufacturer to an integrated module producer," CEO Kangping Chen said during Jinko's conference call with analysts Monday morning. "In the third quarter we have significantly lowered our average nonsilicon costs throughout the value chain ahead of schedule." Jinko said demand was particularly strong for solar modules, which sold for higher average prices. For Q4, Jinko expects revenue of $210 million to $220 million, above analyst views of $162 million . Jinko Solar shares leapt 17% to 35.14, even as rival solar stocks sold off. The Shanghai firm's stock has soared 225% since its early-May IPO, vs. the S&P 500's 3% gain. IBD's solar energy group is up just 6.8%. One-time sector leader First Solar (NMS:FSLR) has sold off 11% since reporting a fifth straight quarter of declining margins late Thursday. Kaufman Bros. analyst Jeff Bencik wrote in recent months of how strong demand in the solar industry is supporting pricing. And because pricing for solar modules has held up well, says Gleacher & Co. analyst John Hardy, module makers have been able to capture the benefit of cost cuts in their supply chain. Jinko shipped 92.5 megawatts of modules, 70% more than in the second quarter. Modules rose to 69% of total shipments, up from 54%. Jinko cut nonsilicon costs to 77 cents a watt vs. 83 cents in Q2. Chen attributed that to technology advancements, better operating efficiency and lower average purchasing costs due to higher volume. "What's been helping Jinko and the industry out in general is just tremendous growth in demand," said analyst Gary Hsueh, of Oppenheimer & Co., which was one of the lead managers on Jinko's IPO. Helping to spur demand is that European buyers are pushing to get solar projects established before expected subsidy cuts, Hsueh says. "A lot of projects are trying to skirt underneath the 2010 feed-in tariff schedules as opposed to 2011 feed-in tariffs," he said. "It drove pretty strong demand in the first half in Germany, and we think in the second half in other countries in Europe — Italy and France." The dash to buy in 2010 could lead to reduced demand in 2011, when perks drop in some countries. Demand in Germany has been "lackluster" since austerity measures kicked in midyear, Hsueh says. Jinko Locks In 2011 Contracts "What most people are looking at in 2011 is just pricing accommodation, meaning prices have got to come in a little bit on system pricing in general to accommodate lower subsidies," Hsueh said. That puts pricing pressure on component suppliers. Despite all that, Jinko continues to excel in Germany, Belgium and France, and is making "substantial headway" in the U.S., Australia, and Israel, Jinko Chief Strategy Officer Arturo Herrero said on Monday's conference call. CEO Chen said Jinko has already secured solar module contracts of more than 400 megawatts for 2011. It announced several in October. Last Friday, Jinko said it filed a follow-on public offering of 3.5 million ADRs, each representing four ordinary shares. Two million will come from Jinko, 1.5 million from selling shareholders. The company's proceeds will be used in part to expand production capacity "in response to the robust demand in the global PV market," Chen said.

To: Jacob Snyder who wrote (9238)	11/17/2010 8:11:01 PM
From: Jacob Snyder	1 Recommendation Read Replies (4) \| Respond to of 16955

Started buying back solars today, with FSLR at $125. In general, I will be buying solars when TAN (solar ETF) is below its 200dma (now at about $8, an important support/resistance line), and selling above that line. All buying, selling, covering and shorting will be done in widely spaced increments, given the extreme volatility of this sector, and with only a fraction of my portfolio. If TAN gets far above its 200dma, I might consider shorting the solars with the weakest fundamentals. I still think this industry is going to go through a period of excess supply (resulting in module prices falling to marginal costs of production, falling profits, and falling stock prices). This has been masked so far, because so much production is "non-bankable", so the "bankable" producers can maintain prices even in an environment of oversupply. It can't last. equity, % decline from 2010 high to today's low, month of 2010 high: FSLR 20% October LDK 28% October TSL 31% October JASO 31% October TAN 37% (solar ETF, January) FAN 38% (wind ETF, January) YGE 47% January SPWRA50% January STP 60% January CSIQ 61% January The stronger stocks went above their January highs in October. LDK looks good on this list, only because it was priced for bankruptcy earlier this year (I still think the banks will end up owning it). Investment-grade solars, in this order: FSLR, TSL, YGE, JASO Shorting candidates: LDK, SPWRA, STP, CSIQ TAN: Eric: I don't always respond to your many posts, but I greatly appreciate the effort you make, to post useful info. Thanks.