Citigroup and Piper Jaffray Comment on Solars

3/13 - "LDK Solar Co., Ltd. (NYSE: LDK) came out with projections showing thats backlog for its solar wafer capacity is fully booked for 2008 and more than 90% booked for 2009."

"This almost trades as a value stock, assuming there are no problems that haven't yet come out. This one has been under fire and has more than one critic, so those "values" might have an asterisk behind them. Analysts have an average target north of $50.00. If estimates are accurate, First Call has 2008 EPS targets at $1.74 EPS and 2009 targets at $3.80."

Via Notable Calls - 3/12:

"Cowen is out with a good call on Suntech (NYSE:STP) saying that trading around 12x 2009E EPS, they believe STP shares offer 50%+ upside vs. the market in 12 months. Investors may be puzzled by the timing of the convert offering, given current market conditions and the low share price. However, this is driven by the lead time to add polysilicon capacity, and it should give STP access to long-term, low-cost supply. While the deal is slightly dilutive this year, it could be offset by higher revenue in 2009. And, details of poly supply deals should provide triggers for the shares...Reits Outperform."

Via AP - 3/11:

"Shares of solar-power company SunPower Corp. rose Tuesday as an RBC Capital Markets analyst said the company should be able to weather the expiration of government incentives and potentially weaker panel margins over the long term...Analyst Stuart Bush noted that if expiring government incentives for solar power are not renewed, it will put pressure on demand in the U.S. and Spain. In addition, potential oversupply of solar products could put profit margins under pressure next year."

"Despite those concerns, Bush is still betting that SunPower's size and scope will keep it above the fray. He maintained an "Outperform" rating on the stock.

Though SunPower has business in Spain and the U.S., it has diversified its revenue base. In addition, its supply-chain integration should allow it to boost margins elsewhere if panel profits come under pressure, Bush said."

3/12 - "Emcore's industry leading multi-junction solar cells enable a new class of high power communications satellite for direct to home broadcasts and advanced satellite services. These advanced solar cells have also been adapted for use in terrestrial concentrator applications and have attained conversion efficiencies in excess of 37%. These products will make possible cost competitive concentrating photovoltaic systems for use in utility scale solar power stations and other distributed energy applications...What sets the company ahead of the silicon-based competitors is its use of compound semiconductor materials that enable it to develop highly efficient cells."

"Concentrated solar power is undergoing a renaissance, not only in the U.S. but globally, throughout Europe and the Middle-East...According to a recent study from Emerging Energy Research [EER], a leading research and advisory firm analyzing clean and renewable energy, Solar CSP is the fastest growing utility-scale renewable energy alternative after wind power, with up to $20 billion expected to be invested by 2013."

"Oppenheimer is also positive on this company, especially the fiber optics division, and sees a spinoff of the solar division...The stock is now bouncing off of its 200-ma, the oscillators are oversold and the time to buy this stock is now. Emcore should double in a year."

3/13 - "We believe JASO is attractive for the following reasons: 1) it has solid supply agreements for silicon wafers that covers 100% of our 2008 and 2009 sales estimate; 2) It has a solid customer base that is increasingly more diverse geographically. 100% of the output is sold out at fixed pricing; 3) JASO has a cost advantage as the lowest processing cost producer in the industry at $0.19/W."

"4Q07 results came in at EPS $0.09 on sales $144 MM. Consensus was at EPS $0.09 on sales $118MM. Pro-forma EPS was $0.19 (this excludes $0.05 options expense and $0.05 foreign currency exchange losses). Shipments increased 15% Q/Q to 50.2MW."

"Guidance for 2008 was increased to 340MW production output up from 325MW. Capacity by the end of 08 was also increased to 500MW (up from 425MW)...JASO has secured silicon at fixed pricing for 100% of their expected output in 2008. In addition they have secured silicon for 600MW output in 2009. Management is looking to increase their supply for 2008."

"We are upgrading to Strong Buy from BUY while maintaining our price target of $28 based on a multiple of 16x our 2009 EPS estimate."

3/5 - "There are a great deal of contradictions in the solar marketplace based on these scenarios. The first contradiction is a result of the huge expansion in the industry. Total capacity announced for nearly 100 panel manufacturers (thin film, monocrystalline, and polycrystalline), comes to 10.7 GW for 2008, while solar production is forecast to reach only 5.6 GW. That equates to a capacity utilization of only 52%. By way of comparison, capacity utilization in the semiconductor industry was 90% at the end of 2007."

"The second contradiction is that if thin film solar continues at its same growth rate, in 2009 thin film will make up 17.8% of all solar power generation. That would leave a capacity of polysilicon exceeding demand by 17,000 metric tons, based on capacity expansions announced by the polysilicon manufacturers. With all that polysilicon capacity on hand, and thin film solar panels having such low efficiencies, why should thin film continue to increase?...the third contradiction: why such an increase in capacity by polysilicon manufacturers when it’s not needed?"

"The fourth contradiction is why is there a thin film market in the first place? If efficiencies are so low, particularly in the amorphous thin film sector, why do we need them in the future? They served a purpose in the past few years because there wasn’t enough polysilicon around. But why in 2008 and beyond?...The fifth contradiction is the high equipment costs to make an amorphous silicon thin film panel."

"The overcapacity should impact equipment and materials sales in the amorphous silicon thin film area...With the industry having twice the capacity as it needs, expect some rethinking on the part of investors."