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Has solar demand - and the slide in solar shares - finally hit bottom?
The solar analysts at Merrill Lynch think so. In a piece authored by analysts Lu Yeung, Vincent Chow, Matthew Yates and Steve Millunovich, Merrill Tuesday morning asserted that “improving second derivative trends” suggest the industry is headed for a cyclical bottom.
The Merrill analysts assert that, while there is not likely to be a recovery in demand until early 2010, Q4 2008 and Q1 2009 “will mark the shipment bottom,” with modest sequential increases in subsequent quarters. “Our research suggests that some Asian vendors may forecast flat-to-rising shipments, suggesting inventory is peaking and depletion is underway, thanks to swift production cut backs, signs of easing in solar project financing and solar ASP declines,” they write.
The Merrill analysts thinks ASP declines will decelerate for the Asian solar sector with modules already priced below $3/watt, versus $3.50/watt for U.S. and European vendors. They contend that the Asian solar sector can maintain margins at around 20% with poly prices at $150/kg or less with module prices at $2.70/watt, or with poly at $100/kg and module prices at $2.40 a watt.
Meanwhile, the Merrill analysts say that demand could shoot up as prices fall and approach grid parity. Their view is that the addessable market is 3x greater with module prices at $3/watt than at $4/watt.
seekingalpha.com/article/...and-finally-hit-bottom?source=feed
The solar analysts at Merrill Lynch think so. In a piece authored by analysts Lu Yeung, Vincent Chow, Matthew Yates and Steve Millunovich, Merrill Tuesday morning asserted that “improving second derivative trends” suggest the industry is headed for a cyclical bottom.
The Merrill analysts assert that, while there is not likely to be a recovery in demand until early 2010, Q4 2008 and Q1 2009 “will mark the shipment bottom,” with modest sequential increases in subsequent quarters. “Our research suggests that some Asian vendors may forecast flat-to-rising shipments, suggesting inventory is peaking and depletion is underway, thanks to swift production cut backs, signs of easing in solar project financing and solar ASP declines,” they write.
The Merrill analysts thinks ASP declines will decelerate for the Asian solar sector with modules already priced below $3/watt, versus $3.50/watt for U.S. and European vendors. They contend that the Asian solar sector can maintain margins at around 20% with poly prices at $150/kg or less with module prices at $2.70/watt, or with poly at $100/kg and module prices at $2.40 a watt.
Meanwhile, the Merrill analysts say that demand could shoot up as prices fall and approach grid parity. Their view is that the addessable market is 3x greater with module prices at $3/watt than at $4/watt.
seekingalpha.com/article/...and-finally-hit-bottom?source=feed
