http://biz.yahoo.com/bw/080215/20080215005370.html?.v=1I'm a new investor to this little China gem. Any comments would be appreciated.thanks, sm
Hi, Sm!The company looks like it's chugging along nicely. One thing kind of popped out at me from the press release though (excerpt here):Business Outlook for Full Year 2008Based on the current market and operating conditions, estimated production capacity expansion and forecasted customer demand, the Company’s PV module shipment and net revenue targets for the full year 2008 are as follows: * PV module shipments in the estimated range of approximately 255 MW and 265 MW, which represents a 78.9% to 86.0% increase compared to 2007. * Net revenues in the estimated range of approximately US$969 million and US$1,020 million, which represents a 74.1% to 83.3% increase compared to 2007.The odd thing here is that YGE is implicitly forecasting a very low drop in the revenue per watt. This does not seem consistent with past market behavior, nor does it seem consistent with the oversupply of PV that is predicted to materialize late this year. Now I don't know if the oversupply will indeed come to pass, but I'm just looking askance at the revenue per watt projection.Now.....with this in mind, what is a reasonable price to pay for the company? That's a tougher one. Personally, I'm just sticking with my current STP. Stronger company, more reasonable valuation IMO.But, who can say? If YGE outperforms STP this year, I've seen stranger things happen over time. :)Rob
Thanks so much Rob. I recently bought in at about $19. I really don't understand the business and since STP is more secure and followed here in Fooldom, perhaps I should switch over.best, sm
sm, there is much here that I don't understand either.I see huge growth in PV ahead, but I'm not sure how well it will translate for shareholders.Customers are buying watts and evaluating it on installed cost. At some point, this will be a commodity business. Some projections point to a PV oversupply in a year or so with all the capacity coming onstream. That's a scenario that will benefit the low cost producers, but it will probably mean margin compression and uncertain earnings growth rates.I'm holding STP for now because I expect good earnings growth this year, but the future is pretty cloudy for PV in general. I think investments in this industry need to be watched closely and folks need to have a plan if they don't like what they see....Maybe I'm just concerned over nothing......or maybe something. I've learned to not ignore concerns though.Rob
Thanks Rob. I sold YGE at $22 and bought STP at $35.best, sm
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