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

To: Jacob Snyder who wrote (12396)	12/15/2011 5:01:37 AM
From: Dennis Roth	Read Replies (2) \| Respond to of 16955

First Solar, Inc. (FSLR) 2012 Guidance Below Street; A Takeout Looks More Likely 14 December 2011 ¦ 12 pages citigroupgeo.com What happened — ’12 EPS guided to ~$4.00 (mid-pt), below our $5.32 and far below Street ~$7.00. Note EPS doesn’t include ~$1.00/share net cash receipts from Desert Sunlight where GAAP revenue recognition is deferred – thus, “apples to apples” guide was ~$5.00 (mid-pt), or about in-line w/our model. It also neg-pre’d CQ4:11 EPS due to ~125-150MW slippage in the utility pipeline. Adjusting for this, allocation to the utility pipeline in ‘12 seems okay if not a bit better than prior comments. Our take — To us, EPS seems a bit couched given the volume assumptions as it appears to embed merchant module pricing of $0.60-0.70/W and systems ASP of ~$3.20-3.30/W – reasonable, but relatively conservative. It will remain very challenging to make much money pricing at $0.60/W – a level required to keep moving product against c-Si at $0.80/W as realized poly prices head to $25/kg. This is true even if you believe new cost targets of ~$0.52/W by 2015. Thus, it all depends on its ability to capture incremental revenue/margin by adding to the utility pipeline. We have modeled ~500MW/yr in gross pipeline adds but this will be challenging near-term as many US utilities are over-provisioned and plants are operating above planned capacity factors. The end game — We see two likely outcomes: 1) FSLR is taken private (given the massive lumpiness, up front capital requirements), or 2) it finds a rich parent (i.e, GE? Samsung? for technology differentiation). Barring this, it is apt to remain challenging. Module biz assigned zero value at this price — We are slightly raising our C2011 EPS from $5.32 to $5.61 (this including net receipts from Sunlight) but 2013 cut from $6.75 to $3.62 as less systems remains for '13. W/stock $34 currently, this is about what we think the NPV of the pipeline is worth meaning mkt now finally assigning zero valuation for the "core" module business. This is the case in the next year or two, but poly can not remain at $25/kg forever. Also, upside in the stock could come from a potential takeout as highlighted above. Our $60 target remains unchanged but we now see the pipeline worth more ($35/share) and the module business worth less ($25/share).

To: Jacob Snyder who wrote (12396)	6/12/2012 2:34:10 PM
From: Jacob Snyder	Read Replies (2) \| Respond to of 16955

Bought more YGE at $2.55, TSL at $6, $5.5 on the latest dip; sold nothing, but haven't bought any more FSLR or JKS. I'll probably buy more TSL at $5, YGE at $2.10. TSL and YGE look like sure survivors; I'm less sure about FSLR being a survivor, than I was 6 months ago. STP still looks like the bondholders will eventually own the entire company. Ditto LDK. TSL had charges for "retroactive import tariffs from the recent Commerce department ruling." Retroactive? That's as if I went to the grocery store, and they added $1 to my bill, saying, "we've retroactively increased the price for the gallon of milk you bought last week, from $4 to $5." I didn't think that was legal. This latest idiocy by our government won't do anything long-term to improve the competitiveness of U.S. industry. Maybe if we graduated more engineers than China from our universities, we could stop losing markets to them. While campaigning for President the first time, and for a while after being elected, Obama aggressively promoted alt-energy. However, it no longer seems to be much of a priority for his administration, and he never got much accomplished. Disappointing. The U.S. remains way behind Europe, Japan, China, Brazil in commitment to alt-energy and energy independence. Not holding or buying any wind stocks, and don't intend to. Solar is steadily gaining on wind, dropping prices and manufacturing costs at a much greater rate. The other alt technologies continue to be niche or blue-sky. Ethanol from corn or sugarcane is a technological/ecological/economic dead end. Thanks again, Eric, for your excellent info regularly posted here.