We would like to highlight LDK Solar Co., Ltd. (NYSE: LDK). The company is a manufacturer of multicrystalline solar wafers. Solar wafers are the principal raw material used to produce solar cells, which are devices capable of converting sunlight into electricity. The Company sells multicrystalline wafers globally to manufacturers of photovoltaic products, including solar cells and solar modules. It produces and sells multicrystalline solar wafers between 180 and 220 microns in thickness.
In the company’s recent news,
LDK Solar Co., Ltd. reported second quarter financial results this afternoon that blew away estimates. Net sales were $441.7 million, a sequential increase of 89.2% from $233.4 million in the first quarter, and a whopping 345.9% increase from $99.1 million for the second quarter of fiscal 2007. Net income tripled sequentially to $149.5 million, or $1.29 per ADS, from $49.8 million, or $0.45 per ADS in the first quarter. During last year’s second quarter the company earned $0.29 per ADS. These results took analysts by surprise; the consensus earnings estimate was $.42 per ADS on $282.0 million in revenues.
“We experienced substantial revenue growth during the second quarter as our wafer capacity expansion exceeded our expectations,” stated Xiaofeng Peng, Chairman and CEO of LDK Solar. “We were also pleased to introduce our first Nova wafers using Upgraded Metallurgical Silicon (UMG), which began shipping to certain customers, ahead of schedule during the quarter. Customer demand remains strong and we have signed nine long-term wafer supply agreements year-to-date, further diversifying our customer base. In response to our sales backlog, we are again raising our target annualized capacity to 1.2 GW by the end of 2008, 2.2 GW by the end of 2009 and 3.2 GW by the end of 2010.”
LDK offered revenue guidance based on anticipated wafer shipments. For the third quarter, the company expects to recognize $486 -$496 million in revenues, vs. current analysts’ consensus of $307 million. For the full year of fiscal 2008, LDK expects to achieve $1.65 -$1.75 billion in net sales. Analysts were predicting $1.16 billion in revenues for the full year.
LDK closed at $33.58 yesterday and has traded in a 52-week range of $19.64 - $76.75. There are many Chinese solar plays, and they typically trade as a group. The sector has been hit hard recently, due to uncertainty surrounding the continuation of Spanish and American subsidies, and to the sizable slide in oil prices. Yingli Green Energy (YGE) reported results last Wednesday that beat the Street, but the stock has sold off 15% since then, despite the company also raising guidance.
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