Thursday, August 13, 2009

LDK Solar Co. Ltd. Q2 2009 Earnings Call Transcript

This is just brutal. The analysts seemed stunned, 2x4 to the forehead style. The stock is trading at $9.12 down $2.09 (18.64%).
From Seeking Alpha, here's the whole thing. I'm jumping to the Q&A:

Question-and-Answer Session


(Operator Instructions) Your first question comes from Edwin Mok - Needham & Co.

Edwin Mok - Needham & Co.

First question is regarding just kind of environment in the third quarter. What do you guys see for your ASP and the spot ASP. Also I noticed your towing business has increased as a percentage of total, do you expect that trend to continue in the second half?

Jack Lai

Let’s start with the ASP situation. At the present time, the ASP mostly we see is between $0.90 to $0.95. We see the price is much more stabilized as compared to three to six months ago, which of course was $1.50 level, but right now I think we are pricing $0.90 to $0.95.

As far as the trending for Q3, Q4, probably mostly we’re going to see $0.90, maybe some competitors they’re also seeing some in the mid $0.80 level, but for LDK I think we’re mostly at the $0.90.

Edwin Mok - Needham & Co.

Then the towing mix, Jack?

Jack Lai

Well, our business model continues to be between 15% to 20%. Right now I think we are closer to 20% as a composition.

Edwin Mok - Needham & Co.

A question maybe for Xiaofeng regarding the downstream opportunities there, can you help us a little bit in terms of your pipeline. Obviously you guys are working with a lot of local guys in China, but maybe help us in terms of pipeline just for this year and next year, how much do you expect to ship for that in Italy and in China.

Also is that a delayed revenue recognition for those and finally, for the module that you said you’ll be shipping 10 to 20 megawatts in the third quarter, is that going to be shipping to a project you guys are incubating and where would that project be?

Xiaofeng Peng

First for the module shipments, it’s shipped to a third party, the disputation being now focused on earning stock in Europe at the moment. This is the module shipment to the third party.

On project, in China I think now this year we are starting slowly. I think, now we just got some project approval for rooftop and then step-by-step also I think, also now we’re in the process of approving the project, especially regarding some project.

I think definitely we will start some project in China, both rooftop and the project in Jiangxi and Jiangsu province and also other province, starting from mostly the fourth quarter I think. Definitely next year we’ll be much, much more improved and there will be significant improving increase in China.

For Europe, now we have collaborated these several projects in Italy with the ESPE and common Italian and also SAEM. This is a project we will be mostly in Italy and most of this project will be finished in the fourth quarter and some will be finished in the first quarter and second quarter next year.

For the project collaboration with Q-Cells, it’s 41.5 megawatts. I think we will expect to start connection in September. So this is the total picture. Of course, we are negotiation many project pipelines, both in Europe and China and this will be more similar agreement in the next few quarters....MORE

What are these folks babbling about? Q-Cells, one of the largest in the world, just this morning had to reassure the markets that they had "Adequate Liquidity".

The first questions should drill down on survivability, as in "Will the Chinese government backstop your credit lines". Jeesh.