Tuesday, October 14, 2008

LDK Poly Plant News - 10/14/08

Well, now that I have time to say a few words, I'll do so.

LDK Solar Provides an Interim Update on Its Polysilicon Plant Construction.

LDK Solar Co., Ltd. (NYSE: LDK), a manufacturer of multicrystalline solar wafers, today provided an update on the progress on the construction of its 1,000 metric ton (MT) annualized capacity polysilicon plant.

Equipment installation for the 1,000 MT annualized capacity polysilicon plant has been completed and plant process commissioning has commenced. To date, installation has been completed of eight reactors and one converter in the reactor/converter station, and eight distillation/purification columns, heat exchangers and associated piping in the TCS purification station. The 10kV utility power substation, 10kV process power station, and 110kV/10kV switchgear are operational.

The anticipated polysilicon production levels in the fourth quarter of 2008 will be updated in a separate announcement as the entire manufacturing system continues to progress through the startup and commissioning phase. Additionally, LDK Solar remains confident in its 15,000 MT polysilicon plant construction progress and reiterates its plans to produce between 5,000 and 7,000 MT of polysilicon in 2009.

"We are pleased with the progress made to date on our aggressive schedule for the construction of our polysilicon plants and to continue to work on the long term productivity and safety issues of our new factory," commented Xiaofeng Peng, Chairman and CEO of LDK Solar. "We would like to recognize the hard work and contributions made by our employees during the construction of the polysilicon plants and in readying the facilities to ramp polysilicon production."

This PR is full of good news. It was unclear previously whether they even had all of the equipment on-site, and particularly, whether they had a Converter Reactor. It's now clear that it's all there, and it's installed.

Of course, the Stock went down today, and there are Bashers all over the boards. Nothing new there.

This is news we've been waiting for, and I'm actually suprised at the actual level of completion of the plant. If it weren't for overall market conditions, which are not only been attracting all of the attention, but also have wiped out a tremendous amount of long-interest buying power, we'd have had a major move. As it is, long interest is still on the sidelines, probably in Cash or Government debt, and they continue to wait.

Shorts were given another chance to short sell the news, but they're running up against major forces that are lining up against them.

For one, LDK will announce earnings in November, and they should far exceed even the expectations that LDK raised just a few days ago. Today's announcement increases the likelihood that along with earnings, we'll actually get word that LDK has successfully produced Polysilicon In-house. This will be the final nail in the coffin for the claims of analysts like Jesse Pichel who have said that LDK would NEVER produce Poly.

Second, we're looking at a very likely Obama win in just three weeks. When you come up to an intersection, you make a choice. Which way do you go? Your future is irrevocably defined by this decision. When you choose the direction, you may not know exactly what lies down that particular path, but at least you will have some idea of where you're heading. Likewise, on the 5th of November we won't be able to see any detail of what will happen in the days, months, and years ahead, but we'll know that the choice has been made between "Drill, Baby, Drill" and a renewably-powered US grid. Money will move on that difference in vision.

Third, Solar Earnings for the quarter will demonstrate that even in this shitty Economy, Solar Energy is a bright spot. It takes very little money in the greater scheme of things to completely buy up all of the Solar Industry Output for the next few years. Even without further positive changes by Obama, we already have the extension and expansion of the Solar Energy Tax Credits in the US by way of the recent passage of the Wall Street Bailout. As money continues to flee underperforming industries, it will continue to find its way into those growing industries like Solar. In addition, as risks to the Economy continue to suprise and frighten people around the world, those people with resources available will increasingly find personal use of Solar for their Energy needs to be a comforting hedge against the possibility of breakdown, or hyperinflation.

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