Read the latest interims.......just make sure that you are sitting down.

TNCI and SOLA covered in the media:

from advfn boards:

closing market report:

"meanwhile traders reported plenty of interest in the 2 recently floated Chinese energy stocks Renesola and Tinci Holdings,both floated at well under their original price and dealers see them as undervalued and playing catch up"

and


"over on the junior market aim newcomer Tinci holdings attracted interest as traders spotted enormous potential in its Flue Gas Desulphurisation product."

Fortitude, I'm always glad to see people basing their arguments on mathematics rather than just wishful thinking, but I'm not sure I can agree your sums.

According to my reading of FT.com, there are 100 million shares in issue.

Your 12 million estimated profit at PE 15 gives a market cap value of 180 million, or 180p per share (not 18!).

I calculated, based on the fact that the last quarter's profit of $5.05 mil was earned on approx 8 MW of wafers being produced, that on the 80 MW they aim to produce in a full year they should earn $50.5 million. (EDIT: at least - one assumes that operating efficiencies and/or economies of scale will also continue to improve and boost profits; the one thing we can't say yet is how successful they will be in selling everything they produce, although early indications seem to be that they are signing lots of new contracts)

Which is a pre-tax profit of approx 26.5 mil. Subtract 30% for corporation tax (although I don't know what the tax regime is in China) and you get 18.55 mil.

Multiply by 15 and you arrive at market cap 278 mil, conveniently also 278p per share.

I would like to do some more research - MP tells me there's lots worth reading on ADVFN, plus I'd also like to get the AIM admission document under my belt. I just want to be sure that the sums bear some relation to reality.

If I'm talking total bilge, please feel free to disagree and I shall amend my post forthwith.

Cynic, a pleasure as always. I see that the SP hasn't quite done the vertical lift-off I was anticipating this morning; I hope there is some kind of tactic involved by the MM's to shake out some shares but can't confirm this as I can't view the individual trades.

Moneyplus, many thanks for your mail. Will reply anon.

Whatuwant, I'd be interested to see how your arithmetic pans out, too. With so much to go on in the quarterlies, it ought to be child's play, but I'm always interested in others' opinions as they may have a better-informed take on things.

Further note to the SP - I see that the spread has widened to around 4p as opposed to yesterday's 1p, so I assume this means that the MM's are trying to slow things down a little and get hold of more stock to sell. Undoubtedly there are many out there who are better than I at reading the tealeaves; opinions welcome!

A few bullet points, culled from ADVFN:

- The company will use the bulk of the funds raised to purchase furnaces and slicers which will increase its capacity from 48MW to 80MW and 125MW by December 2006 and 2007, respectively.

- It has a number of long-term contracts including a three-year agreement for wafer supply with Taiwan's largest solar cell maker, Motech Industries for 80MW per year (starting in 2007) and a deal with Chinas Jiangsu Linyang Solarfun for 14.4MW in 2007 and 25MW in 2008.

- ReneSolas customers include many of the major global PV companies. In the first quarter of 2006 just over half of ReneSolas production were sold abroad with Germany (22per cent) and Asia (22 per cent) being its biggest markets. Given the higher margin on domestic sales, management is seeking to grow domestic sales to over 80 per cent of sales by year-end 2006 from 48 per cent in 2006. This should not be difficult given the momentum in the Chinese solar industry. Demand for solar energy is supported by the Renewable Energy Law which came into effect in January 2006 and targets an increase in renewable power generation to 15 per cent by 2020 from around 7 per cent today. The law provides the framework for grid companies to start paying more for energy from renewable sources by way of higher feed-in-tariffs. China is well suited for solar energy given its climatic conditions and the cheap installation costs which help to lower payback periods.

- more later, maybe!

Edging back into positive territory for the day:

SOLA Bid: 148p Offer: 152p Change: 0.5

feel theres too many on this now so moved for TNCI

SOLA a cracker once the speculators disappear.

soul

of course. accurate as opposed to my inaccuracy.

believe the tax rate on this years profits is 10% according to, forget the name, on ADVFN. leaves a net profit of 23.85M. I believe they have secure sales for 100% of 2006 production and a high percentage (?) of 2007 production.

3.58 (358M Cap) although comparative companies liek MEMC (US) trade on 26x

for me its not the absoluet size of profits but its rate of increase which is what SOLA offers. who knows what the company as up its sleeve with further contracts and efficiency savings. at least labor isn't a drag on profits and they have secure silicon supplies for the next 12 months. its looking good

someone selling into the rise though - not surprising

f18

Thanks Forti - good to have your feedback.

Agree sales are well-assured - see my post #23.

They are also due to extend capacity AGAIN in 2007.

It also looks good regarding peers in the US -there's one co called Suntech which is trading on a PE of something like 108, although this could be overdone (English understatement, maybe!?!?). It's making about five times the profit of SOLA. Seems the market is eager . . .

Bad timing for me though i got in at 157p this morning,what a shame cancelled last nights order to buy b4 market closed,any way lets wait and see,very bad timing from me oh well.

some people have made good profits from 90p and profit taking is bound to happen but once this settles down I have high hopes of at least double my stake-shame I've only got a few!

Don't panic, Ateeq - I'm hopeful along with MP that this is a bit of profit-taking/ tree-shaking by the MM's to loosen up some more stock so the SP can go even higher!

Agree it would be nice to have an even bigger holding, MP!

EDIT - check out how they've crow-barred open that spread since yesterday - bound to shake a few out!

some excellent stuff on ADVFN. anyone any idea how much the MOtech deal is worth (3 yrs) considering its deal with REC (5 years) is valued at $305M?

would love to know

F18

All the info is there, Forti - see my post #23. MOtech have gone in for 80MW per year, the profit figures you can deduce from the quarterlies.

I'm all calculated out at the moment, otherwise I'd have a look myself :o)

Now back to 1p spread:

SOLA Bid: 150p Offer: 151p Change: 1

Wish I was an MM - easy money, considering they paid 145 for the stock :o)

More bullet points:

- The company sees a rapid worldwide growth for PV demand.
China expects PV usage to rise from 75MW to 400MW by 2010.
Germany saw 170MW in 2003 rise to 837MW in 2005
Japan has 292MW in 2005
US has 105MW in 2005
Spain expects 150MW to rise to 400MW by 2010


- The company will soon have 54 monocrystalline furnaces installed. Each is capable of producing 500kg/month of silicon ingots. This will equate to 48MW annual production.
It is proposed to install a further 36 furnaces (each costs $100k) for an annual 80MW capacity.
In 2007 it is proposed to purchase 15 multicrystalline furnaces (each costs $750k) which can produce 2400kg/month, or a total annual 125MW.
These 15 furnaces are more efficient and can use lower grade feedstocks.

Lots of comparisons with US-quoted, China-based firm Suntech, which has market cap $4 bn or so.

Suntech may be overbought - I'm not convinced that this is going to reach quite those dizzying heights, but am gonna enjoy the ride while it lasts :o)

prefer to compare with MEMC, believe suntech is a solar power user of wafers as opposed to a wafer manufacturer

MEMC 26x pe

??

f18

Taking a breather today,ready for the next phase one hopes.

Hi
I can see this share reaching 1.72 by this day next week. It appears to me that the placing price was too low and that 1.62 / 1.72 would appear to be a fair value
Regards
SM