- Chinese solar product maker Trina Solar Ltd expects its revenue to double in 2009, reaching $1.7 billion to $1.8 billion as it ramps up capacity to meet strong demand for clean energy, its chief executive said on Thursday. (analysts at $1.3 billion)
- Solar module shipments next year will surge to 450 megawatts (MW) from this year's 210 MW to 220 MW, as the firm plans to double its capacity to 700 MW by the end of 2009 and boost it further to 1,000 MW in 2010, Gao Jifan said in an interview from the firm's headquarters in Changzhou, near Shanghai.
- To fuel the expansion, Trina Solar's capital expenditure is expected to rise to $250 million in 2009 from $200 million this year and reach $350 million in 2010, with funding coming mostly from internal resources, he said. "Our cash flow is enough to fund our expansion until 2009. I believe our operating cash flow will increase further in 2010, enough to supply our expansion needs," said Gao, who is also the firm's chairman. (this has been a source of constant consternation by analysts) He therefore did not expect the development plans of the New York-listed firm to be significantly constrained over the next two to three years by the U.S. credit crunch. (what credit crunch? problem "solved" as of late night)
- Trina Solar's cash reserve at the end of this year is estimated at $100 million, with operating cash flow generated in 2009 seen between $150 million and $200 million, he added.
- The firm has secured 70 percent of its sales target for 2009 and Gao expected to secure more orders, most likely in Europe, which now generates more than 90 percent of its total revenue.
- Gao said he may consider building plants outside China in the future. (that's new)
- Gao expected the company's profit margin, estimated at 23 to 25 percent this year, to improve in 2009, as it signed more long-term polysilicon supply contracts, with pricing levels significantly lower than in the spot market.
- Gao said he believed his firm's share price was undervalued given the bright prospects of the solar industry, as more governments in developing countries such as China offer policy incentives to promote the development of solar power, following the lead of many European countries. "There is no doubt that our share price is undervalued," he said. "It should be more than double the current level."
I continue to believe the $4.43 estimate for 2009 is a complete mockery. There is a chance for nearly double that in 2009 but this is the sector of boogeymen. Analysts always find something to worry about.
It will be important to scale up quickly in this sector as there are a bevy of competitors and consolidation will rip through the industry over the next 5 years. Too early to tell if Trina will be one of the "eventual" winners but at 8x 2008 estimates it's discounting every worst case scenario known to man.
Long Trina Solar in fund; no personal position
3 comments:
alternate energy demands will also depend on oil prices, wouldn't it ?
What do you think would be the price direction for next month or so.
Sushant, I'm not worried about demand. Not sure if you are American but Americans have a way of thinking only about ourselves or what the media tells us i.e. oil down = alternative energy not needed.
Other countries have been going hard and heavy for alternative energy as they are PROACTIVe - not REACTIVE. Brazil after the oil shocks of the 70s transformed their energy needs and are self sufficient. Some smaller European countries did it as well. Japan and Germany have been pushing on solar for a decade now. France on nuclear.
They don't want to be hostage to oil prices. We do. Because we have short memories. The rest of the world is pushing forward. We only push forward AFTER the emergency. Not in advance. The US has barely even begun any solar nor has CHina. In 3 years China will have passed up by miles on alternative energy. As will the rest of the world.
Meanwhile we can put our corn into cars and call that progress. Along with "drill baby drill"
I heard about this on the radio this morning (link) . It's pretty long term, so who knows what will really happen, but it could be a big shift. Oh, and if you haven't see this yet - it's the funniest thing.
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