TraderMark - Bookkeeping: Closing LDK Solar (LDK)

Thursday, May 15, 2008

After the earnings report (solid) and guidance (not so much) from LDK Solar (LDK) earlier this week, I cut back my stake. I've decided to sell out completely today for a few reasons. First, the sophistication level in solar seems to not be so high so these stocks all trade in tandem... if company A reports a bad number they all sell off, or if company B reports a good number they all go up. So in some ways a basket approach is a bit useless. Second, I think LDK Solar is more of a late 2008 to mid 2009 story so I'll revisit it then. While it can jump in the meantime (up), I believe it will just be due to the sector and not anything specific to the company, so I can get that same 'sector' exposure through other names (with less headwinds). I want to keep my solar exposure (allocation) consistent - and I've piled a lot into Trina Solar (TSL) due to its valuation and prospects the next few quarters. I'd rather own more Trina, than put that same money into LDK Solar.

Now we do have some risks owning Trina as well, as (1) the market is well overdue for a correction (2) the solar sector has exploded and is due for its own correction and (3) Chinese leader Suntech Power (STP) might have a bad quarter due to some company specific situations and it reports next week (Trina is not out with their date but they report next week as well)- and as I said above, when 1 name has a bad quarter people trash the whole sector, regardless of individual fundamentals.

So while I've moved Trina Solar up to the top stake in the fund, I've cut back elsewhere to keep my allocation flat. At this point Trina Solar could gain 100% from here, and only trade at par with valuations of its peers such as Suntech Power (STP) or Yingli Green Energy (YGE) - this is why I am willing to hold it even though the above 3 conditions could lead to a sell off in the name. It's valuation is just that compelling, and it is being missed by the market. So as a warning ahead of time, we might take some losses in the near term (weeks) from this position but I think by end of year 2008 this will be a huge winner, and when I think of applying new money to the sector I'd rather go there instead of LDK Solar. With earnings from Trina coming in a few weeks I'll know shortly if this thesis is correct; but I'm going to a more narrow focus in the sector (less names). Once again let me stress this sector has come a long way in a short time and all the names are at risk of substantial pullbacks - and when this group pulls back it does not mess around - 25-30%+ pullbacks are the "norm".

I'm selling the last 150 shares of LDK Solar around $36.00; this has been one of the fund's biggest losers [Top Fund Winners and Losers] and I've owned it since Aug 30, 2007. I do believe it will have a nice 2009, but the chart below shows how it has done since September 07, and how difficult it has been to make money in this name.

Long Trina Solar, Yingli Green Energy in fund; long Trina Solar in personal account



Source: www.fundmymutualfund.com

Trina Solar Signs Long-Term Polysilicon Supply Agreement with DTK Industries (Qingdao) Co., Ltd.

Thursday May 15, 8:53 am ET CHANGZHOU, China, May 15 /Xinhua-PRNewswire-FirstCall/ --

Trina Solar Limited (NYSE: TSL; '"Trina Solar" or the "Company"), a leading integrated manufacturer of solar photovoltaic products from the production of ingots, wafers and cells to the assembly of PV modules, founded in 1997, today announced that the Company has signed a long-term polysilicon supply agreement with Jupiter Corporation Ltd., an affiliate of DTK Industries (Qingdao) Co., Ltd. (collectively, "Qingdao DTK").
Under this agreement, Qingdao DTK will supply Trina Solar with virgin polysilicon sufficient to produce approximately 650 MW of solar modules in aggregate over six years. Delivery of polysilicon at predetermined prices is expected to start in the third quarter of 2009.

"This agreement marks another milestone in Trina Solar's silicon procurement strategy. Through this new agreement with one of the leading emerging polysilicon producers, Trina has taken steps to further secure its long-term procurement needs while reducing the long-term cost of solar energy," said Jifan Gao, Trina Solar's Chairman and Chief Executive Officer. "This agreement will provide a significant portion of our production needs at favorable terms. Qingdao DTK's forward thinking management and advantageous positioning will ensure the success of this agreement."

"We are looking forward to our cooperation with Trina Solar that will help build a cleaner environment for future generations," said Indi Sohal, CEO of Qingdao DTK. "We share Trina's vision to expand the solar industry and make it the premier renewable energy choice. Qingdao DTK is excited to support and be a part of Trina Solar's vision to help build the Solar Industry."

This long-term polysilicon supply agreement will enhance the Company's raw material supplies to strengthen its position as a leading global PV module manufacturer. The addition of Qingdao DTK as a polysilicon supplier shall further diversify Trina Solar's overall polysilicon sourcing as well as increase its flexibility to respond to changing market conditions.

About Trina Solar Limited

Trina Solar Limited (NYSE: TSL - News), through its wholly-owned subsidiary Changzhou Trina Solar Energy Co. Ltd., is a well recognized manufacturer of high quality modules and has a long history as a solar PV pioneer since it was founded in 1997 as a system installation company. Trina Solar is currently one of the few PV manufacturers that has developed a vertically integrated business model from the production of monocrystalline and multicrystalline ingots, wafers and cells to the assembly of high quality modules. This integrated value chain helps to ensure that high quality products can be delivered to its end customers around the globe, including a number of European countries, such as Germany, Spain and Italy. Trina Solar's solar modules provide reliable and environmentally-friendly electric power for residential, commercial, industrial and other applications worldwide. For further information, please visit Trina Solar's website at http://www.trinasolar.com .

About Jupiter Corporation Ltd. and DTK Industries (Qingdao) Co., Ltd.

Jupiter Corporation Ltd. and DTK Industries (Qingdao) Co., Ltd. are wholly European owned and operated companies belonging to the Sohal Family. Affiliate companies include Chinese manufacturing plants and European construction companies, uniform supply to the service industries and managed services for multinationals in Europe. For more information contact: www.dtk-global.com or email indi@dtk-global.com.

Safe Harbor Statement

This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, Trina Solar's ability to raise additional capital to finance its activities; the effectiveness, profitability, and marketability of its products; the future trading of the securities of the Company; the ability of the Company to operate as a public company; the period of time for which its current liquidity will enable the Company to fund its operations; the Company's ability to protect its proprietary information; general economic and business conditions; the volatility of the Company's operating results and financial condition; the Company's ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the Company's filings with the Securities and Exchange Commission. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.

    For more information, please contact:

   Trina Solar Limited
    Sean Shao, CFO
    Tel:   +86-519-8548-2008 (Changzhou)

    Thomas Young, Director of Investor Relations
    Tel:   +86-519-8548-2008 (Changzhou)
    Email: ir@trinasolar.com

   CCG Elite Investor Relations
    Crocker Coulson, President
    Tel:   +1646-213-1915
    Email: crocker.coulson@ccgir.com

    Ed Job, CFA
    Tel:   +1-646-213-1914
    Email: ed.job@ccgir.com 

Update TSL

Trina Solar (TSL), our favourite solar play, is once again close to that 200 day moving average which seems to hold it back for some time. Below you can see the chart. We think that with every failed attempt, the chances of success the next time will increase.

Why? Because the fundamental news from the industry remains very good.

For instance, today Canadian Solar had very strong figures out and guided above analyst forecast for the coming quarter, and it’s up a whopping 30% today!

Also, there is optimism about the US energy bill, which is now likely to extend tax breaks for solar installations for several years instead of the one year extension originally planned. It’s not a done deal though, according to Citibank.

We think after some consolidation, either upside or downside break-out is likely, we see little reason for downside break-out. The only candidate (bar some disaster) would be an earnings disappointment, but since they were pretty cautious last time, the chances of that happening are not terribly high.

You can also accumulate on weakness (which is not today) and wait for the confirmation of the break-out to go in with more. If you get impatient, you could even buy into the rally today a little, but you run the risk there won’t be a break-out anytime soon.

Source: shareholdersunite.com

Trina Solar Signs Long Term Supply Agreement with SILFAB S.p.A.

Thursday April 24, 8:49 am ET

CHANGZHOU, China, April 24 /Xinhua-PRNewswire-FirstCall/ -- Trina Solar Limited (NYSE: TSL; "Trina Solar" or the "Company"), a leading integrated manufacturer of solar photovoltaic products from the production of ingots, wafers and cells to the assembly of PV modules, founded in 1997, today announced that the Company has signed a long-term polysilicon supply agreement with SILFAB S.p.A.
Under this agreement, SILFAB S.p.A. will supply Trina Solar with virgin polysilicon sufficient to produce approximately 225 MW of solar modules in aggregate over six years. Delivery of polysilicon at predetermined prices will start in the first quarter of 2010.

"This long-term supply agreement with SILFAB S.p.A. will enhance our ability to expand our operations and meet our objective of becoming a leading global PV manufacturer. In addition, we believe that this contract, which offers attractive payment terms, together with our other long-term contracts, will enhance our ability to expand our margins in the long term as the cost of solar energy approaches grid parity," said Jifan Gao, Trina Solar's Chairman and Chief Executive Officer.

"We look forward to developing a close relationship with Trina," said Franco Traverso, SILFAB S.p.A.'s Chairman and CEO. "We are pleased to become one of Trina Solar's key suppliers and to help them with the supply of polysilicon."

About Trina Solar Limited

Trina Solar Limited (NYSE: TSL - News), through its wholly-owned subsidiary Changzhou Trina Solar Energy Co. Ltd, is a well recognized manufacturer of high quality modules and has a long history as a solar PV pioneer since it was founded in 1997 as a system installation company. Trina Solar is currently one of the few PV manufacturers that has developed a vertically integrated business model from the production of monocrystalline and multicrystalline ingots, wafers and cells to the assembly of high quality modules. This integrated value chain helps to ensure that high quality products can be delivered to its end customers around the globe, including a number of European countries, such as Germany, Spain and Italy. Trina Solar's solar modules provide reliable and environmentally-friendly electric power for residential, commercial, industrial and other applications worldwide. For further information, please visit Trina Solar's website at http://www.trinasolar.com .

About SILFAB S.p.A.

SILFAB S.p.A. is the first Italian company whose mission is the production of high quality solar grade polysilicon for the photovoltaic (PV) market. SILFAB offers superior quality of polysilicon, at Grade: 9N-, suitable for the solar cell manufacturers. SILFAB was founded in Piemonte by an expert in the renewable energy business, Franco Traverso, who has 25 years of experience in the PV sector. SILFAB's partners are leading PV product providers in Europe with a strong interest in the procurement of solar grade polysilicon.

Safe Harbor Statement

This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, Trina Solar's ability to raise additional capital to finance its activities; the effectiveness, profitability, and marketability of its products; the future trading of the securities of the Company; the ability of the Company to operate as a public company; the period of time for which its current liquidity will enable the Company to fund its operations; the Company's ability to protect its proprietary information; general economic and business conditions; the volatility of the Company's operating results and financial condition; the Company's ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the Company's filings with the Securities and Exchange Commission. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.

    For more information, please contact:

   Trina Solar Limited
    Sean Shao, CFO
    Tel:   +86-519-8548-2008 (Changzhou)

    Thomas Young, Director of Investor Relations
    Tel:   +86-519-8548-2008 (Changzhou)
    Email: ir@trinasolar.com

   CCG Elite Investor Relations
    Crocker Coulson, President
    Tel:   +1-646-213-1915
    Email: crocker.coulson@ccgir.com

    Ed Job, CFA
    Tel:   +1-646-213-1914
    Email: ed.job@ccgir.com