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WONG LAM WAI , DAVIDUID:2008085991
Alternative Energy -Is Solar Power a Good
Investment?
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Copenhagen Conference 2009
‘…..cutting our emissions in the range of 17 percent by 2020, and by more than 80 percent by 2050 in line with final legislation.’ A quote from President Obama ‘s speech in Copenhagen Conference 2009
ALTERNATIVE ENERGY!!
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Solar Stocks
GCL-POLY ENERGY 03800.HKSOLARGIGA 00757.HK APOLLO SOLAR EN 00566.HK COMTEC SOLAR 00712.HK SINGYES SOLAR 00750.HK LDK Solar Co-ADR (LDK), SunTech (STP), Yingli Green (YGE), Renesola
(SOL), Solarfun Power Holding (SOLF)
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The Solar Stock
The return of 3800.HK if you invest in March is
Above 400%
The return of Heng Seng Index
200%
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The Solar Stock
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The Solar Stock
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What Happened?
The solar stocks dropped sharply
Some fell over 50% from its peak
It has to do with the production chain of the solar cell
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Value Chain of Photo-cell
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Poly-Silicon Price
US$450
US$60
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Winner’s Curse
The spot price of poly-silicon falls by over 60%
($US450 => $US60) Cost of producing poly-silicon in China is ~$US50-$70/kg
Basically, Most China solar company produce for Zero Profit or even Loss
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David’s Pick
Rating for the whole industry: Underweight
GCL-Poly Energy (3800.HK) and LDK Solar Co-ADR (LDK) : Long-Term Buy
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Reason for Long Term Buy of GCL-Poly Energy
Policy Driven Factor:Small Poly-silicon producers with low
capacity are forced out of business.Sovereign fund China Investment Corp.
Bought 20% stake in GCL-Poly Energy Holdings Ltd.
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Reason for Long Term Buy of GCL-Poly Energy
Market Factor:
Relative low Cost : $US36.3/kg . Profit is ensured.
Expected Rebound in Poly-silicon price and huge consolidation in the solar business
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Demand is the Key
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Value Investing
p.16 of snowball. Famous saying from Warren Buffet
"In the short term, the market is a voting machine. In the long run, it's a weighting machine"