Tag Archives: LDK

Solar Buzz at German Show on New Tech, M&A

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My headline for this item may be a little misleading, as I’m sitting here having my morning coffee in Shanghai writing it while speculating on what will happen at one of the world’s top solar energy shows that kicks off today in Germany. All the big Chinese names, including Suntech (NYSE: STP), Trina (NYSE: TSL), Yingli (NYSE: YGE) and many others, are attending the show this week in Hamburg, in a rare event that will bring together many of the sector’s top executives in a single place at a single time. (event homepage) Event materials and the flood of company press releases coming out this week are filled with upbeat talk of improving technology, which is helping the sector gain momentum, especially in markets with strong government incentives. What’s receiving little or no mention, however, is the industry’s current state of malaise, as it suffers through its worst-ever downturn amid slumping demand and overcapacity that has seen many weaker industry players, such as LDK (NYSE: LDK), sink into the red. While technology is indeed improving and will be widely discussed in public forums at the Hamburg event, I have no doubt that M&A will also be a regular topic of discussion between top company executives in more private venues and over drinks and other meetings out of public view. Renesola (NYSE: SOL), a mid-sized player in reasonably good health, already alerted the markets that it’s open to being acquired when it adopted a so-called “poison pill” plan last month to prevent a hostile takeover. (previous post) Other mid-sized players, such as JA Solar (Nasdaq: JASO), could also look like good acquisition targets, as the entire sector suffers from a stock market sell-off that has pushed share prices to very attractive levels. With so many executives in one place at one time, this event is the perfect starting place for talks on much-needed consolidation, and I wouldn’t be surprised to see announcements of the first round of M&A coming by the end of this year.

Bottom line: M&A is likely to be a common theme at a major solar event this week in Germany, with the first round of resulting deals likely to be announced by year-end.

Related postings 相关文章:

◙ Suntech: Separating Good Solar from Bad

◙ LDK: An Exploding Star for a Sector in Turmoil

◙ Renesola Rights Plan: Consolidation Coming

 

News Digest: August 30, 2011

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The following press releases and media reports about Chinese companies were carried on August 30. To view a full article or story, click on the link next to the headline.

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◙ SAIC (Shanghai: 600104) Profit Beats Estimates After GM, VW China Sales Climb (English article)

◙ Bank of America to Sell 13.1 Bln China Construction Bank (HKEx: 939) Shares (Businesswire)

◙ Youku (NYSE: YOKU), DreamWorks Animation In “Kungfu Panda” China Distribution Deal (PRNewswire)

◙ LDK Solar (NYSE: LDK) Reports Q2 Financial Results (PRNewswire)

◙ Tencent (HKEx: 700) Video Invests Over RMB 100 Mln on Infrastructure (English article)

Suntech: Separating Good Solar from Bad

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Solar industry leader Suntech (NYSE: STP) has just released its latest quarterly results, which prove that times of crisis are a natural selector to separate the strong from the weak. (company announcement) While other companies have been sharply revising down their annual forecasts amid the industry’s worst ever downturn, Suntech’s revisions were far less severe, and it even forecast a sharp rebound in its gross margins in the third quarter as its situation stabilizes. The company slightly lowered its full-year revenue forecast to about $3 3 billion from a previous $3.4 billion, and actually maintained its full-year shipment target at 2.2 gigawatts worth of modules. Last month it showed it was aggressively moving to manage costs by terminating an expensive 10-year supply agreement with MEMC, negotiated five years ago when solar material prices were rising. (previous post) The company forecast more turbulence for the next few quarters, but clearly it has turned the corner by containing costs and using its market-leading position to steal sales from other weaker performers. Its strong performance contrasts sharply with LDK Solar (NYSE: LDK), one of the industry’s weakest players, which last week shocked few with a massive downward revision in many of its second-quarter forecasts, including a 63 percent downgrade in its forecast for module shipments. (previous post) Suntech shares ended Monday down slightly, possibly due to a net loss in the second quarter on some one-time charges. But with its shares now trading near a 52-week low, like most of the industry, Suntech looks like a good bet to lead the sector out of its current downturn, set to not only survive but also emerge as a possible consolidator for some of its weaker peers with attractively low valuations.

Bottom line: Suntech’s latest results show that stronger companies are starting to emerge from the solar sector’s downturn, and could lead consolidation by buying up weaker players.

Related postings 相关文章:

◙ LDK: An Exploding Star for a Sector in Turmoil

◙ Renesola Rights Plan: Consolidation Coming

◙ Trina, Ming Yang Kick Off New Wave of Energy Deals 天合光能、明阳风电掀起新一轮能源“订单潮

LDK: An Exploding Star for a Sector in Turmoil

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The bloodbath also known as China’s alternate energy sector is nearing the end of its worst reporting season on record, and newly updated guidance from problem-plagued LDK Solar (NYSE: LDK) should provide a spectacular finale to the show. (company announcement) The company won’t release final figures until the end of this month, but it has revised down all of its previous forecasts for the second quarter by 20 percent or more, including a staggering 63 percent downward revision in shipments of modules, the final product in the solar energy production chain. At the same time, its gross margins tumbled to about 2 percent from a previous forecast of about 24 percent, and it wrote off $60 million in inventory, which is the company’s way of preparing the market for a massive net loss when it releases its actual results. The company made its announcement after New York markets closed on Thursday, and not surprisingly its shares were down 21 percent in after hours trading. LDK’s dismal report follows downbeat results from nearly everyone, including the most recent forecast-missing figures from Canadian Solar (Nasdaq: CSIQ) (company announcement). Despite signs that the downturn has bottomed, severely depressed valuations this week prompted mid-sized player Renesola (NYSE: SOL) to approve a shareholder rights plan, often called a poison pill designed to prevent hostile takeovers, in a sign that we’re likely to see some consolidation in the months ahead for this bloated sector. Such consolidation would mean smaller companies like Renesola could become acquisition targets. But major money losers like LDK are likely to find little interest from potential buyers, forcing them to sell off assets or even to file for bankruptcy if they run out of funds.

Bottom line: LDK Solar’s sharply lowered Q2 guidance reveals a company on the brink of crisis, boding poorly for its future as the broader solar sector struggles to emerge from its current downturn.

Related postings 相关文章:

◙ Renesola Rights Plan: Consolidation Coming

◙ LDK: Cash Crunch Looming? 赛维LDK即将囊中羞涩？

◙ Trina, Ming Yang Kick Off New Wave of Energy Deals 天合光能、明阳风电掀起新一轮能源“订单潮

Sharks Come Out in China Stock Crisis 信任危机冲击在美上市中资股

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The accounting confidence crisis continues to take its toll on New York-listed China firms, with some mixed signs coming from the struggling solar sector and a very “shark-like” announcement from a US law firm looking to take advantage of the situation. The China Daily reports the crisis has already claimed Longtop Financial, ShengdaTech and China MediaExpress as victims, all of which have been delisted (English article), and last week two larger firms, AutoChina International (Nasdaq: AUTC) and CDC Software (Nasdaq: CDCS), said they were out of compliance with listing  rules for failing to file annual reports on time — a first step toward potential de-listing. Now a US law firm named Blank Rome has stepped in by generously offering to provide services to some of the more troubled firms, many of which are likely to face shareholder lawsuits due to plunging share prices on investor concerns about shady accounting. (company announcement) Of course, many of the upcoming lawsuits will probably go nowhere, as the firms will quietly de-list and retreat to China where they will be out of reach of the US legal system. Meantiime, there’s another potentially troubling sign from the struggling solar sector, which may be set for its own accounting crisis due to questionable sales, with Canadian Solar’s (Nasdaq: CSIQ) announcement that it’s replacing its CFO. (company announcement) That announcement follows recent resignations of audit committee chairs at LDK Solar (NYSE: LDK) and Trina Solar (NYSE: TSL), (previous post) though one of my sources tells me Canadian Solar’s resignation may be unrelated to accounting issues. Lastly, there’s a small piece of good news in the alternate energy sector from Ming Yang, which says it’s joined a group developing a relatively sizable 48-megawatt wind power project in south China’s Guangdong province. (company announcement) While announcements like this are encouraging and show China is stepping up to help its struggling alternate energy equipment makers, it could end up being too little too late if the sector’s rapid downward spiral doesn’t end soon.

Bottom line: The accounting confidence crisis for US-listed Chinese stocks is still playing out, and will claim more victims, potentially including some alternate energy firms, before the clean-up ends.

会计操作信任危机继续冲击在美国上市的中资股，而近期走势挣扎的太阳能板块释放出好坏参半的讯号。《中国日报》报导称，融通金融、盛大科技和中国高速频道，已沦为这场信任危机的牺牲品，均已遭摘牌或停牌。此外就在上周，汽车中国国际<AUTC.O>和中华网软件<CDCS.O>称违反了上市公司规章，未及时申报年度报告，而这或许成为走向摘牌的第一步。现在，有家名为Blank Rome的美国律所提出向一些陷入窘境的中资企业提供服务，这其中许多中资企业因会计操作疑虑导致股价重挫，可能遭股东起诉。当然，许多的官司可能最後无果而终，相关公司将悄然摘牌，退回到中国，美国司法制度可能也就鞭长莫及了。与此同时，太阳能板块传递出一些令人忧心的讯号，该领域或许也迎来一场会计信任危机。Canadian Solar<CSIQ.O>财务长近日辞职，而此前赛维太阳能<LDK.N>、天合光能<TSL.N>审计委员会主席也已辞职。不过有消息人士告诉我，Canadian Solar财务长辞职可能与会计操作无关。不过替代能源行业也有一些好消息，譬如明阳风电加入了广东一48百万瓦风电项目。虽然这类消息令人兴奋，表明中国正加大扶持替代能源设备制造商，但如果该领域快速下行的趋势不赶快结束，政府扶持可能也收效不大。

一句话：美国上市中资股面临的会计操作信任危机仍在继续，可能会有更多的中国企业中招，其中可能包括一些替代能源企业。

Related postings 相关文章:

◙ Wall Street Clean-Up Underway Amid Accounting Crisis 会计危机中华尔街展开清理行动

◙ Latest Solar Audit Resignation Hints at Major Issues Ahead 中国太阳能行业再现审计人员辞职：昭示问题还在前方

◙ China Confidence Crisis Separates Wheat from Chaff 中国企业信任危机 对不同公司各有利弊

Latest Solar Audit Resignation Hints at Major Issues Ahead 中国太阳能行业再现审计人员辞职：昭示问题还在前方

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The latest resignation of a top audit committee member in the solar sector, this time at LDK Solar (NYSE: LDK), hints that major new storm clouds could be on the horizon for an industry already struggling with its worst ever downturn. LDK announced late on Monday in the US that Louis Hsieh, one of its independent directors who also happened to chair its audit committee and was a member of its corporate governance committee, has resigned for unspecified reasons after several years on the board. (company announcement) LDK’s announcement comes less than a week after an eerily similar one from another major player, Trina Solar (previous post), whose audit committee chairman, an independent director as well, also abruptly resigned without any further explanation. (company announcement) These two similar resignations so close together look very ominous, especially in light of the industry’s current woes, which have seen solar panel prices drop steadily for most of this year due to oversupply. One of my industry sources tells me word on the street is that many of these firms may have recorded sales to phantom customers during the industry’s brief boom in 2009 and 2010, hoping to earn a profit by selling that product at higher prices later when panel prices were still rising. If that were true, the current downturn may have left many of these companies with piles of inventory that have already officially been “sold” on their accounting books for much higher prices than current market rates. Whatever the case, I sense even more turbulence ahead for this already-reeling industry, which perhaps now faces the potential for its own set of accounting scandals.

Bottom line: The resignation of LDK Solar’s audit committee chairman, following a similar departure at a rival last week, points to a potential industry-wide accounting scandal in the struggling solar sector.

中国太阳能行业又有审计人员辞职了，这次是江西赛维LDK太阳能公司<LDK.N>。此事暗示整个行业新的乌云可能已不远。LDK周一晚在美国宣布，公司独立董事、公司治理委员会成员、审计委员会主席Louis Hsieh辞职，原因不详。无独有偶，天合光能<TSL.N>几天前刚刚宣布独立董事兼审计委员会主席突然离职，公司对辞职原因亦没有给出解释。两起辞职事件如此相似，时间如此接近，给人一种不祥的预感，尤其考虑到当前整个行业的困局。我的一名业内消息源向我透露坊间传闻，称2009和2010年行业向好时期，很多太阳能企业可能把一些对挂名客户（phantom customers）的销售记录在帐，希望随後价格上升时以更高的价格卖出产品。如果事实确实如此，那麽目前颓势可能让很多企业滞留大量库存，而在帐面显示上已是以很高的价格“卖出”了。无论到底是什麽情况，我认为太阳能行业将会有更多地震，眼下来看有爆发审计丑闻的可能。

一句话：继上周天合光能审计委员会主席辞职後，江西赛维LDK太阳能也宣布其审计委员会主席辞职，两件事双双指向同一种可能：挣扎不一的太阳能行业可能爆发会计丑闻。

Related postings 相关文章:

◙ More Solar Woes at Trina, Renesola 昱辉阳光、天合光能：旧伤未去，新伤又来

◙ Suntech, JA in Latest Solar Rumblings 尚德与晶澳动作频仍

◙ Solar Makers Shine Hopes on New US Commerce Secretary 中国太阳能生产商寄望於新任美国商务部长