LDK Solar (LDK) "No Need to Raise Capital for 2 Years"

This story is a sign of the times...

• Chinese solar wafer maker LDK Solar Co Ltd (LDK) has no plans to raise funds from the capital markets for the next two years as it has enough cashflow to fund an expansion which would more double its capacity by 2010, its chief executive said on Friday.
• "We are one of the most profitable firms in the sector and our profit exceeds $100 million each month. The proceeds and our cash flow are far more than enough to fund the expansion," he said.
• In September, New York-listed LDK raised $192.4 million from a secondary offering of 4.8 million American Depositary Shares.
• ....would also consider making acquisitions especially in the upstream polysilicon business
• Peng, also chairman of LDK, also said that he did not expect any negative impact from the global economic turmoil, as its order book was filled until 2018. "I am not worried at all, as we are booked for the next 10 years. Some have already paid roughly 10 percent of their orders as a sort of down-payment," he added.

Solar stocks have absolutely been beaten to a pulp as it is a capital intensive business and large projects by utilities and the like also require capital markets to be functioning in an orderly fashion. There seems to be a perfect storm against the sector right now.

LDK Solar is another 5 PE stock, with a 40-70% growth rate. As I'm doing with everything right now, if I assume next year is the biggest disaster in economic history and growth is cut by 50% (instead of growing by 40-50% as currently estimated), then in a year we have a 10 PE stock a in what should be a trough in the global business cycle. LDK Solar has raised guidance multiple times this year, but to no avail. [Oct 8: LDK Solar Raises Guidance - Again]

Almost every Chinese solar stock is now below its IPO price.

[Aug 11: LDK Solar Crunches Estimates]

Long LDK Solar in fund; no personal position