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

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.

That's my view too, Harry. As long as SOLA can get the waste material, they can make the wafers.

Posted on another BB:



http://news.yahoo.com/s/afp/20061121/sc_afp/chinaenergyenvironmentsolar


Tue Nov 21, 5:36 AM ET



SHANGHAI (AFP) - China intends to build one of the world's biggest solar power stations at a cost of 765 million dollars, state press have reported.


The 100-megawatt facility, to be built in Dunhuang, an oasis town in northwest China's Gansu province, will be a collaborative effort between the local government and Beijing's Zhonghao New Energy Investment, Xinhua news said Tuesday.

The project will take five-years to construct, it added.

The report followed plans announced by Australia last month to build the world's biggest solar power station, a 154 megawatt behemoth, which the builder said could reduce greenhouse gas emissions by about 400,000 tonnes a year.

Australia, like the United States, has refused to sign the Kyoto Protocol on climate change, and the station is part of Australia's rethink on national environmental policies that are under sharp criticism at home and abroad.

China for its part, which signed the Kyoto accord in 1998, is the world's second-largest emitter of climate change gases after the United States and the world's largest coal burner.

About 70 percent of China's energy comes from burning the fossil fuel and hundreds more coal-fired power plants are being built every year.

China has set goals for renewable energy to account for 16 percent of its overall energy production by 2020 and to increase energy efficiency per unit of gross domestic product ( GDP) by 20 percent over the next four years.

But already there are signs that those targets are being missed, with energy per unit of GDP rising by 0.8 percent in the first half of the year, according to government figures.

If China intends to proceed with that sort of project on a regular basis, then it doesn't seem like SOLA's future is in any doubt.

However, all IMO, PDYOR, WDIK, etc!!

Sold my trading holding today at a nice profit, in order to diversify my risks (SOLA had grown to over 40% of my portfolio - definitely time to de-risk!!). Bought some GNG and OSG and will possibly add to my QTI.

Harrycat, you asked about my exit strategy, and I think I shall be doing the following: holding my core until around the end of the calendar year, possibly until the full-year financials come out and then cutting down to leave just the free-carried stock as an investment for the future. I have decided to be a little mor cautious in view of concerns over China, plus the fact that failure to take profits in the past has often cost me dear! Will keep you posted!