Tuesday, January 6, 2009

LDK Solar Lowers Sales Outlook, Delays Factory Plan

January 5, 2009

LDK Solar on Monday slashed its sales and shipment estimates for the fourth quarter of 2008 and is now expecting a lackluster 2009, news that caused its stock to plunge by 15 percent.

The Chinese maker of silicon wafers, which are turned into solar cells for making solar panels, said preliminary data showed that it likely generated $425 million to $435 million for the quarter that ended in December, instead of the previously anticipated $555 million to $565 million.

LDK (NYSE: LDK) said it also shipped an estimated 245 megawatts to 255 megawatts worth of wafers during the quarter, down from the 260 megawatts to 270 megawatts.

Recession and customers who wanted to delay delivery prompted the lower sales, the company said. LDK plans to announce full fourth-quarter and 2008 financial results in late February or early March.

The revised estimates underscore how declining prices are whacking the solar industry. The company reduced revenue estimates by around 23 percent but lowered shipment by only 5 percent. Thus, prices are dropping far faster than any decline in actual demand for products.

The situation could get worse in 2009 as it completes manufacturing projects while facing declining demand.

LDK launched ambitious plans to build two factories in China for producing polysilicon, the main ingredient for making wafers, over the past year and half. The two polysilicon factories are LDK's first efforts to make polysilicon instead of relying on outside suppliers.

But LDK is having trouble bringing its first factory into full production mode, the company said Monday. The 1,000-metric ton factory was supposed to be completed and running at capacity by the end of 2008. The factory is producing polysilicon, but it isn't likely to reach full production until mid 2009.

LDK blames problems with the "optimization process" for the delay but didn't provide more details. Calls and emails to the company weren't immediately returned.

The company said the construction of its second polysilicon plant is on track. LDK expects the 15,000-metric ton factory to begin production in the second quarter of 2009.

The outlook for 2009 isn't rosy. LDK expects lower average selling prices for its products and lower wafer shipment this year.

For 2009, it expects to generate between $2.3 billion and $2.5 billion in sales. Shipment could reach between 1.57 gigawatts and 1.67 gigawatts.

The company previously thought it would bring in between $2.9 billion and $3.1 billion in sales and ship between 1.8 gigawatts and 1.85 gigawatts worth of wafers in 2009. Its customers include Q-Cells, Suntech Power Holdings and Canadian Solar.

LDK now expects to produce between 3,000 metric tons and 5,000 metric tons of polysilicon instead of 5,000 metric tons to 7,000 metric tons.

The company's annual wafer capacity would reach 2.3 gigawatts in 2009, an estimate that hasn't changed from the prior forecast.

LDK's shares dropped more than 15 percent to reach $12.61 per share in after-market trading. The company announced the lower sales and forecast after the market closed.

JA Solar Signed 60MW Solar Cell Supply Contract with Solar Power

Roseville-based Solar Power Inc. says it has signed a contract with JA Solar Holding Co. Ltd. for up to 60 Megawatts of polycrystalline photovoltaic cells.

Solar Power says it needs the cells to meet increased customer demand in Europe, Asia, and for turnkey systems in the United States. The cells will go into SPI's solar modules.

Based in Hebei, China, JA Solar is one of the world's largest producers of high-performance solar cells.

"We are excited about our agreement with JA Solar. Their products are known for quality and performance and we are very fortunate to be able to integrate them into our own," says Steve Kircher, CEO of Solar Power. "This is a true strategic relationship with strong mutual benefit. It will allow us to leverage our vertical integration business model through a significant amount of supply."

He says the contract should put the company and its franchise holders in a strong position to compete on price.

Yingli Green Energy Signs 15 MW Sales Contract with GOLDBECK Solar

BAODING, China, Jan. 5 /PRNewswire-Asia-FirstCall/ -- Yingli Green Energy Holding Company Limited ("Yingli Green Energy" or the "Company"), one of the world's leading vertically integrated photovoltaic ("PV") product manufacturers, today announced that it has entered into a sales contract with GOLDBECK Solar GmbH ("GOLDBECK Solar"), a leading German PV system specialist company for PV applications on industrial buildings. Under the terms of the contract, Yingli Green Energy is expected to supply a minimum of 15 MW of PV modules to GOLDBECK Solar in 2009. In addition, the contract provides a framework for GOLDBECK Solar to purchase up to an additional 58 MW of PV modules from Yingli Green Energy in 2009.

"We are pleased to have Yingli as one of our key suppliers," said Joachim Goldbeck, General Manager of GOLDBECK Solar. "We aim to provide our customers maximum value with our products and services. Cooperating with top tier suppliers like Yingli is one of our principal strategies for achieving these goals in order to secure customers on a long-term basis."

"We look forward to working closely with GOLDBECK Solar in 2009," commented Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy. "Given the cost advantage and quality control capability of our vertically integrated business model, we can provide reliable and high quality products at a reasonable and competitive price, in line with our strategy to continually enhance the value that we provide to our customers. We believe this will lead to a broader and deeper penetration of our products and brand awareness worldwide."

About Yingli Green Energy

Yingli Green Energy Holding Company Limited is one of the world's leading vertically integrated PV product manufacturers. Through the Company's principal operating subsidiary in China, Baoding Tianwei Yingli New Energy Resources Co., Ltd., Yingli Green Energy designs, manufactures and sells PV modules and designs, assembles, sells and installs PV systems that are connected to an electricity transmission grid or operate on a stand-alone basis. With 400 MW of total annual production capacity in each of polysilicon ingots and wafers, PV cells and PV modules, Yingli Green Energy is currently one of the largest manufacturers of PV products in the world as measured by annual production capacity. Additionally, Yingli Green Energy is one of a limited number of large-scale PV companies in the world to have adopted a vertically integrated business model. Through its wholly owned subsidiary, Yingli Energy (China) Co., Ltd., Yingli Green Energy currently plans to expand annual production capacity of polysilicon ingots and wafers, PV cells and PV modules to 600 MW in the third quarter of 2009. Yingli Green Energy sells PV modules under its own brand name, Yingli Solar, to PV system integrators and distributors located in various markets around the world, including Germany, Spain, Italy, South Korea, Belgium, France, China and the United States. For more information, please visit http://www.yinglisolar.com .