Chinese wafer manufacturer LDK Solar (NYSE:LDK) finally has some good news to report.
LDK, which has seen its stock drop more than 60 percent in the past three months, said it was able to reduce the amount of electricity needed to produce 1 kilogram of silicon from 300 kilowatt hours to 100 kWh.
The reductions were achieved at the company's polysilicon plant in Xinyu, Jiangxi province, which began operating its first production line in December. The plant is expected to produce 1,000 tons in 2009, eventually ramping to 6,000 tons.
The good news comes as LDK continues to battle negative reports from analysts, including ThinkEquity's Jonathan Hoopes, who downgraded the stock to 'sell' with a target price of $4.50 late last week. Previously he rated the target as $45.
The stock has a 52-week high of $52.40 but closed today at $5.12, down more than 10 percent.
Last week, the company announced it was delaying plans to complete a a polysilicon factory with an annual capacity of 15,000 metric tons until 2010. The company also said it plans to take an inventory write-down of $210 million to $220 million because of the decline in wafer prices (see Suntech optimistic despite stock downgrade).
LDK expects total polysilicon capacity to hit 12,000 metric tons by the end of 2009, down from a previous target of 16,000 metric tons (see LDK Solar might revise ’08 silicon output).
LDK is among a number of solar firms struggling in China (see Is this the end of China's solar boom?). China has around 140 solar-grade crystalline silicon wafer makers. Estimates are that the wafer industry is now operating at half its capacity because of factory shutdowns that have taken place in the past two weeks.
Polysilicon hit a peak of $400 per kilogram in July 2008, falling to less than $100 at the end of the year. Polysilicon is now trading for $30 to $40 per kilogram and is likely to continue dropping (see Top Chinese firms propose solar electricity for 14¢ per kWh).
Posts
No comments:
Post a Comment