Hat tip to StreetInsider.com for the following comment:
“While we believe SOLR’s DSS furnace business is well positioned fora coming expansion cycle and possibly a replacement cycle as thecompany launches its 600KG furnace next year, we have major concerns onSOLR’s polysilicon equipment (CVD) backlog that bring us to downgradethe stock…We believe that the company’s backlog for polysilicon reactorequipment (75% of its backlog) is at risk due to a rapidlydeteriorating financial condition at its polysilicon equipmentcustomers in China with little hope of an expansion cycle near term asthe Chinese government clamps down on new poly entrants in an effort torationalize capacity. We speculate that many poly start-ups in Chinacould shut down and it will be difficult for SOLR to get new bookingsor realize its contracted backlog…We downgrade SOLR to UW on polybacklog risk and lower PT to $3 (12x FY11 EPS of $0.26) from $7 (12xFY11 EPS of $0.56). We believe a multiple of 12x is justified owing topoly backlog risk and mgmt uncertainty partially offset by GT Solar’stechnology leadership and strong balance sheet.”
JA Solar Crushes Estimates (JASO)
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