GCL-Poly Energy 3800

[winston]

Vested

DJ MARKET TALK: MS Tips "Triple Positive Surprise" For GCL-Poly

1147 [Dow Jones] STOCK CALL: Morgan Stanley tips buying GCL-Poly Energy (3800.HK) on view "triple positive surprise" likely, could result in more than 10% earnings surprise. Notes GCL completed upgrade of polysilicon plant, which allows it to lower manufacturing cost, should provide significant upside to earnings.

Adds, wafer shipments (higher profitability) are growing strongly due to robust industry demand, GCL's good capacity ramp up.

Tips third possible catalyst as average selling prices for polysilicon, wafers holding firm near term, vs house's expectation of steady decline.

Adds, while operations improving, stock underperformed, looks compelling at 1.5X FY10E P/BV with more than 20% RoE, more than 15% earnings growth.

Rates at Overweight, target HK$2.00. Stock down 1.3% at HK$1.50; HSI down 1.2%.

Source: Dow Jones Newswire

[stilicon]

I went through the numbers today on this co. The growth is impressive. It is hard to say anything solid even for the FY.2010.
I dislike the one-time retribution in shares in FY2009. I dislike the negative NAV in FY2008. I also dislike the solar farm projects (I doubt it will be very rentable except when artificially subventionned by the political power). But I like the wafer business. I compare it to WACKER Chemie (WCH on Xetra) in Germany, which is priced at a P/B ratio of 2.7 versus about 1.6 for CGL Poly today. (But Wacker at a 2.7 PBR is very expensive anyway, imo).
Also, the head of the company seems very politically connected. Is it a "get rich quickly on the back of some naive 'investors' " scheme for some sons of apparatchiki ? I wonder. Those schemes frequently end not nicely for the naive investor who follow them.
Still, it can go up for some time. Because solar energy is all hip and trendy today. But I would not count on it for some LT wealth accretion.

[winston]

Not vested. From Dr. Check, The Standard HK:-

GCL-Poly Energy Holdings (3800), a year ago, acquired Jiangsu Zhongneng, the mainland's largest polysilicon supplier. The firm is on track to be the world's biggest producer.

The stock soared to HK$3.84 in July last year but then fell to HK$1.30 in May.

With the price of polysilicon recovering, the stock closed yesterday at HK$1.77, or a valuation of around 8.7 times this year's expected earnings and 1.6 times book value.

Morgan Stanley targets it at HK$2.20.

[winston]

Not vested.

DJ MARKET TALK: MS Ups GCL-Poly Target To HK$2.20 Vs HK$2.00
July 20, 2010

1136 [Dow Jones] STOCK CALL: Morgan Stanley raises GCL-Poly Energy's (3800.HK) target price to HK$2.20 from HK$2.00 after raising earnings estimates to reflect growing confidence company will be able to reduce its cost of manufacturing polysilicon, wafers.

Expects company's polysilicon manufacturing cost to decline to $30.5/Kg by 4Q10, $30/Kg by 2Q11 vs $35/Kg in 1Q10, due to new hydrochlorination facility, lower electricity consumption from reactor upgrades, higher reactor yields expected after upgrade.

Notes, despite recent stock price increase (+21% since June 1), stock still looks attractive at P/BV of 1.6X, P/E of 8.5X on FY11.

Keeps stock at Overweight.


Source: Dow Jones Newswire

[winston]

Not vested

DJ MARKET TALK: GCL-Poly +0.6%; Capacity Ramp Up Positive - SWS
July 29, 2010

1501 [Dow Jones] GCL-Poly Energy (3800.HK) +0.6% at HK$1.80, slightly outperforming vs HSI's 0.1% fall, after news it plans to invest additional US$300 million in silicon wafer business with additional capacity of about 1GW. Company expects new 1GW capacity to be fully ramped up by end-2010.

"The capacity ramp up came earlier than our expectation and we believe it is positive for GCL share price," says SWS Research. Believes wafer capacity is bottleneck along solar value chain due to shortage of ingot and slicing equipment, thus GCL's move is extremely important to gaining market share.

Adds, with CNY2 billion cash at hand, believes ramp up plan can be sufficiently funded by internal cash and bank loans. Keeps at Buy, HK$2.80 target (12X FY11 P/E).

Source: Dow Jones Newswire

[winston]

Not vested

DJ MARKET TALK: MS Raises GCL-Poly Energy Target To HK$2.35

1234 [Dow Jones] STOCK CALL: Morgan Stanley raises GCL-Poly Energy (3800.HK) target to HK$2.35 from HK$2.20, after revising up earnings estimates for FY10, FY11 to reflect lower costs, higher polysilicon pricing in 2Q.

Expects substantial oversupply of polysilicon and wafers next year to reduce spot polysilicon prices from current US$60/kg to US$45/kg; but thinks GCL's profits will increase thanks to higher volumes, further cost reductions.

Keeps at Overweight. Stock down 4.3% at HK$1.79.

Source: Dow Jones Newswire

[winston]

Not vested. From Phillips:-

To continue buying for reasonable valuation

Generally speaking, the high growth of PV industry is expectable, and the demand situation is sound presently. GCL-POLY takes a leading position, and its low cost advantage can bring about high earning capability.

We expect its revenue will be HK$14.7 and 17.6 billion in 2010 and 2011 respectively. Net profit will be HK$2.6 and 2.9 billion, converting into the EPS at RMB 0.17 and 0.19.

Regarding valuation, the Company`s new energy business will grow significantly. Referring to its international peers, the average P/E for electric enterprises listed in HK is 14X, and that for international polysilicon and wafer manufacturer is above 20X.

By the sub-segment valuation, we conservatively give its old electric and new energy businesses 12X and 15X 2011 EPS, and the 12-month TP will be HK$2.74. We reiterate it buy rating.

[winston]

Not vested

DJ MARKET TALK:Citi Starts GCL-Poly Energy At Buy, HK$3.18 Target

1312 [Dow Jones] STOCK CALL: Citigroup starts GCL-Poly Energy (3800.HK) at Buy with target price of HK$3.18. House says firm's aggressive ramp up in poly-silicon and solar wafer production allowing it to become one of largest solar wafer manufacturers globally.

Adds, with in-house poly-silicon, energy-conserving process and unique co-location model, house expects GCL-Poly to maintain 40% gross margin in 2011 and see 42% EPS CAGR in coming two years.

"While consensus focuses on (poly-silicon) oversupply in 2011, we see GCL-Poly's current production cost of US$28/kg as among the lowest, allowing it to gain further market share," says Citi.

Notes valuation is attractive at 8.4X FY11 EPS, compared to sector average of 12.5X. It last down 3.2% at HK$2.41.

Source: Dow Jones Newswire

[winston]

Not vested

Operating Performance for Third Quarter of 2010

http://www.hkexnews.hk/listedco/listcon ... 018191.pdf

[winston]

Not vested

TA KUNG PAO

-- Chinese power plant operator GCL-Poly Energy (3800.HK) would invest 23.5 billion yuan ($3.53 billion) in Jiangsu province to develop industries including emerging technology, tourism, and low carbon technologies.