Monster Solar stock in the Making?? "LDK"
LDK gross profit margins to Surge from a measly 1.7% to a whopping 25% , how? Its ramping up online its own production lines starting next qtr.
Read yesterday's news:
* Increasing much of polysilicon production by end of Q3
By Nichola Groom
LOS ANGELES, June 9 (Reuters) - Chinese solar company LDK Solar Co Ltd (LDK.N) expects to have low gross margins through the current quarter and into the next as it works to ramp up in-house production of its pricey key raw material, Chief Financial Officer Jack Lai said on Tuesday.
The company, which makes the wafers used to make solar power cells, has been building facilities that will produce 16,000 metric tons of polysilicon. It already has 1,000 MT up and running and expects to have the first 5,000 MT of its big plant online in the next few weeks.
The second 5,000 MT of its 15,000 MT polysilicon plant will come online by the end of the third quarter, Lai said.
Spot polysilicon prices have nosedived to around $70 per kilogram since hitting about $500 per kg last year. Even though, they remain above historical levels.
"If we can bring up polysilicon in house production, which means we have a chance to bring the cost to be much lower than with the current market price situation, then we can come back to profitability," Lai said in a presentation at the UBS Global Technology and Services Conference in New York.
LDK's gross margins were 1.7 percent in the first quarter, but Lai said the company expects to bring those up to "the 25 percent range" in the long run as it brings polysilicon production on line.
A year from now, LDK expects to be producing silicon at about $50 a kilogram, bringing that down to around $30 per kg a year later, Lai said. (Reporting by Nichola Groom, editing by Leslie Gevirtz)