Solargiga 757

[winston]

Not vested. Beyond my competence ..

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DJ MARKET TALK: Yuanta Starts Solargiga At Sell, Target HK$1.40

0928 [Dow Jones] STOCK CALL: Yuanta starts Solargiga (0757.HK) at Sell with target price at HK$1.40. Notes 1H09 loss of CNY85.6 million vs 1H08 profit of CNY276.7 million as inventory writedowns totaled CNY172.6 million. Says despite being one of China's leading producers of mono-crystalline ingots and wafers, "Solargiga will find it challenging to return to profitability as its scrap polysilicon cost advantage has been eroded."

Says Solargiga's 2Q08 gross margin at 40% vs peers' average 25%, mainly as scrap processing business supplied by major shareholder Wafer Works (6182.OT) at large discount, but sharp drop in spot price cut scrap business margins significantly, dragging profitability.

Notes company sought vertical integration through JV, downstream acquisition, but house doesn't expect moves will contribute significantly to earnings over next 12 months, especially if solar demand, pricing uncertainty persists in China. Shares ended flat at HK$2.00 yesterday.

Source: Dow Jones Newswire

[winston]

Not vested.

DJ MARKET TALK: Yuanta Rates Solargiga Sell Despite Above-View FY

1441 [Dow Jones] STOCK CALL: Yuanta keeps Solargiga (0757.HK) at Sell, target unchanged at HK$1.40 despite FY09 results topping view, raising 2010-11 EPS forecasts by 172% each as lowers valuation multiples on change in peer group to ingot/wafer makers from solar cell manufacturers, decline in solar-sector valuations, rollover to 2011.

Notes 2009 net loss at CNY98 million, mainly on one-time inventory writedown, but tops house's forecast for CNY128 million loss; attributes to sequential gross margin improvement. Raises 2010-11 revenue forecasts by 61.5%, 81.6% on revised shipment forecasts based on updated solar cell demand outlook, Solargiga's capacity expansion plan. Shares down 1.2% at HK$1.71.

Source: Dow Jones Newswire