RENESOLA - Moderated Discussion & Debate

Escalating expectations for mono-crystalline production from Q2 2007 ??



mbadfvn05 - 28 Dec'06 - 05:57 - 18245 of 18333

cootuk,

Re your post:

"- 27 Dec'06 - 18:42 - 18230 of 18244


We know that SOLA have openly published their detailed expansion program for 2007. IF they don't keep to target (there is a bit of slack built in anyway for August and multiwire saws going in two motnhs ahead of multifurnaces) then I can see a slight slippage...but if any delays are just temporary then that is merely an opportunity to top up."


In the hypothetical event that in Q2 or Q3 2007 SOLA were not to keep fully to their rapid expansion plans, any slight slippage in share price which might then occur would be from a VERY SUBSTANTIALLY HIGHER SHARE PRICE than where we are NOW!

By Q2/Q3 07, SOLA will have substantially EXCEEDED MARKET EXPECTATIONS and we will have had a series of BROKER UPGRADES and increases of TARGET SHARE PRICE, well above 800 pence.

Also, I agree with JTCod and others, that by Q2/Q3 07, SOLA will have started announcing more additional production capacity for 2008 and 2009 which again will DRIVE UP THE SHARE PRICE.


This link shows SOLA's Chart of their present production capacity expansion plans:


If you look at the Chart you will see that SOLA's present expansion plans for 2008 and 2009 are for Multicrystaline furnaces and slicers (coloured green on the chart).

There are presently no expansion plans in 2008 and 2009 for Monocrystaline furnaces and slicers (coloured orange on the chart)

However, my research into the PV solar market indicates that the greatest demand in the future will be for Mono wafers, because PV cells made from these, have the highest energy conversion efficiency. Although Mono wafers are more expensive than Multi wafers (they are sold at a premium price and are probably more profitable for SOLA) this greater energy efficiency of Mono wafers is crucial in marketing terms for PV cell makers - see my earlier post about the crucial role of higher energy conversion of entire systems and Sunpower's competitive advantage of its higher efficiency PV cells based on Mono wafers, which has enabled Sunpower to take massive market share from its competitors


Because of the shortage of polysilicon out to 2010 and beyond, SOLA will be able to sell very profitably in a SELLERS MARKET everything they can produce, whether Mono or Multi wafers - see


Therefore my expectation is that in Q2/Q3 2007 SOLA will announce new additional expansion plans for Mono wafers. This will entail a new factory, construction of which will probably start in H2 2007, so the new additional Mono production can come on stream in H1 2008.

SOLA can easily afford to finance this additional production capacity out of a combination of bank finance for the buildings and, for equipment Capex and working capital for stocks of scrap, from cash flow and forward contract payments and/or tolling arrangements with its customers to provide scrap polysilicon - as they have done with their 30 Nov 2006 expansion plans - see SOLA NR

Conclusion
In 2007 the news from SOLA will just get BETTER & BETTER with a stream of NRs about RESULTS BEATING MARKET EXPECTATIONS, about ANALYST UPGRADES, about NEW EXPANSION PLANS for 2008 and 2009, leading to EVEN MORE ANALYST UPGRADES.