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

Bodisen and Sola share one similarity and one similarity only. They're both Chinese. That's were the similarities end. Unfortunately the PE discounts its chinese origin which explains why it still only trades at a discount to its double digit EPS growth rate.

GOTO JTCod 'Earnings forecast page' on the other site and you'll begin to understand that this stock with its contracts in place and with high earnings visibility will reward you well in the medium term. On a EPS forecast for 07 of 50p (average forecast) and a pe of 15-20 then in 18 months we could be looking at a SP of between 750p-1000p.

Personally as we move away from 06 and into H2 (07) then i believe the market will provide the stock with a higher pe as confidence improves.

f18

The SOLA earnings page by JTCod and others contains a tremendous amount of research and is well worth a visit. I am baffled as to why this company has hardly had a mention anywhere yet the early birds are still buying in-some institutions are also in. maybe it will feature as one of the hot new tips for 2007!!

I agree it is amazing SOLA has not been re-rated after recent results. Perhaps this may happen when the company produces audited accounts for the group as recent numbers are stated to be those of a wholly owned subsidiary.

read today's Telegraph re Chinese investments ..... Like him or not Evil Knievel is not wrong to point out that many Chinese companies will be shown to be nothing but "smoke and mirrors" ..... It may sound racist or similar, but Chinese accounting and ethical standards are most certainly not European!

It may sound racist or similar, but Chinese accounting and ethical standards are most certainly not European!

Fat lot of good 'European' ethical standards did for the likes of Parmalat, or Maxwell Communications or many others I could mention.

Ian

I was being as polite as possible! ...... Put another way; our own company will still not deal directly with China as have seen far too many lose their shirts and/or their intellectual copyright blatantly and unashamedly stolen

Morning all.

I think the point is that there are crooks lurking in all kinds of companies (Regal Petroleum!!), but the climate in China does give a certain amount of freedom that they wouldn't have here in the West.

I am still very happy with SOLA and intend to hold for a good while longer, whilst keeping an eye out for any warning signals.

IMO, PDYOR.

i agree re SOLA, soul! ...... but there is a difference between individual fraudulent tendency (Maxwell, Timmis et al) and cultural, which is what currently prevails in China

Agreed.

We just need to be aware that if other Chinese AIM stocks are exposed to be not what they say, there may be a general impact across the board and SOLA may suffer in the short term. VALUE will out but the road to success may be rockier than we would wish.

Making up some of this morning's lost ground this afternoon:

SOLA Bid: 218p Offer: 224p Change: -3.5

Interesting article in the Daily Telegraph today regarding Chinese Stocks listed on AIM, EK's view and the due diligence that is being done by NOMADs etc.

Copy & Paste link:


http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/11/20/cxmktrep20.xml

suspect that is the same as i mentioned in my post 269 this morning

Yes Cynic. The article trys to give a balanced view hence why I posted the link.

i thought it pretty good too ..... and, I am afraid, more than a whiff of truth

A nice start to the day:

SOLA Bid: 230p Offer: 233p Change: 7

Very low volume, though; not quite 100k traded. Spread seems designed to encourage buyers, too.

And another sunny day in SOLA-land:

SOLA Bid: 235p Offer: 239p Change: 4.5

Silicon shortage hits solar power hopes

By Leo Lewis in Tokyo

Published: November 20 2006 19:30 | Last updated: November 20 2006 19:30

The fragile economics of solar power could be thrown into jeopardy by a severe global shortage of the basic material used to convert the suns rays into electricity.

Industry experts warn that a worldwide shortage of poly-crystalline silicon will not ease in 2008, as some expect, but could continue for at least another five years.

Solar projects will either have to be abandoned, or governments will have to pay billions of additional dollars in subsidies.

The warning comes despite recent capacity expansion announcements at the worlds largest poly-silicon producers.

This week sees the start of negotiations between Japans polysilicon makers and industrial buyers around the world, with prices expected to surge.

Recent months have seen a flurry of announcements of investments in renewable energy projects as concern about global warming, associated with the burning of fossil fuels, has risen up the international agenda.

A Merrill Lynch report on the solar sector cites recent isolated polysilicon transactions at unsustainable prices of about $200 a kilogram nearly 500 per cent higher than in 2004.

Average polysilicon prices, which have doubled in the past 20 months, are expected by some to rise by about 30 per cent over each of the next three years.

Tokuyama, Japans largest producer, admitted last week that its facilities were unable to keep up with demand.

Polysilicon, used to make silicon chips and photovoltaic (solar) cells, is in short supply because of the voracious demand of the booming semi-conductor industry and the rapidly expanding solar sector.

The latter has grown rapidly through large-scale government-backed solar programmes in Germany and Japan, and solar equipment now consumes about half the polysilicon produced.

Global production of solar batteries grew by 47 per cent by volume during 2005, and the pace is believed to have quickened in 2006. One industry estimate suggests that between 2007 and 2009, the global polysilicon supply shortage will be about 9,000 tons a year, or about a fifth of current worldwide capacity.

Jeff Osborne, an analyst at CIBC World Markets, said the uncertainty of silicon supply threatened the economics of solar power for the rest of the decade, and predicted that its growth as an alternative energy source would be stunted.

Expectations that the polysilicon supply shortage will ease in 2008 are overly optimistic and we do not expect supply/demand equilibrium until after 2010, he said.

Industry observers are concerned that large solar panel makers such as Japans Sharp will be exposed to soaring prices for the material and will have to pass them on to consumers, making investment in solar panels unattractive.

Governments may similarly be forced to review subsidy programmes.

Merrill Lynch estimates that governments around the world will have to provide subsidies of up to $24bn (19bn, 13bn) by 2009 to achieve current solar panel deployment forecasts.

Newer panel-makers in promising solar markets such as India and China will probably be forced to reduce production to a small fraction of capacity or abandon expansion plans altogether.

Even when new facilities begin to ramp up at the poly-crystal silicon makers in 2008, said UBS analyst Takaaki Muramatsu, utilisation may not fall below 100 per cent; thus the product shortage could continue.

A prolonged shortage could cause what one analyst described as a substantial delay to solar powers forecast turning-point around 2018, when production costs had been forecast to fall far enough for it to be competitive with prevailing energy prices without subsidies.

Porky, I'd be interested to hear your views on what the article could mean for SOLA.

I am not an economist and would certainly be interested to hear others' opinions, but surely this situation should benefit SOLA, or at least see them coming out better than, for example, Sharp, as SOLA is one the supply side of the wafer industry, taking waste silicon from the chip manufacturers and reprocessing it as mono- and polycrystalline wafers for the solar industry.

Therefore, the implication of the above article for SOLA is surely that demand will be very strong, prices buoyant and SOLA's business secure.

Or have I missed something subtle? The only potential fly in the ointment is that prices of waste silicon feedstock may increase, but SOLA claims to have long-term supply contracts in place covering their forward-sold production. Of course, this being China, they could find that their suppliers sell out to the highest bidder in spite of the contracts, but other than that, the picture looks fairly rosy, unless the whole industry is likely to implode.

Any views??

As stated on the Renesola website:
"Renesola currently processes 20 tons of scrap wafer and polysilicon per month. Output will grow to around 50 tons per month during the second half of 2006. This will make Renesola the largest producer of poly-silicon feedstock in the Chinese solar PV industry."
I am not an expert, so I may have misunderstood, but don't believe SOLA buy poly-silicon from raw matierial suppliers, but source it as a waste product from industry, in particular the waste which is generated from the manufacture of semi-conductors, which they then re-work.
It is my understanding that it is this fact which makes Renesola very competitive as it is not at the mercy of world poly-silicon pricing.