Leading China-based solar product manufacturer,
LDK Solar Co., Ltd.
) entered into an agreement with Shanghai Qianjiang Group to sell
its loss making LDK Anhui asset for RMB 25 million (approximately
LDK Anhui, located in Hefei City was moving toward insolvency
and had negative net assets of nearly $54 million while its total
bank borrowings amounted to $485 million. The Anhui business had
an alarming asset-to-liability ratio of 107%.
LDK Solar expects this asset sale to boost its net assets by
$58 million and improve its asset-to-liability ratio by around
1.8%. The Anhui asset divestiture is a part of the company's
ongoing liquidity and working capital plan disclosed on May 15,
In the wake of the crimping trade barriers adopted by the U.S.
which includes countervailing duties ("CVD") of 15.24% and
anti-dumping duties ("AD") of effectively 25.96%, we believe this
will take a severe toll on LDK Solar's businesses in North
America. The Zacks Consensus Estimates for the fourth quarter and
full year 2012 currently stand at a loss of $1.09 per share and
$5.63 per share, respectively.
For the fourth quarter 2012, LDK Solar expects modest wafer
shipments in the range of 200 megawatt ("MW") to 250 MW with
cells and module shipments in the band of 50 MW-80 MW.
However, the strong economic rebound in China is expected to
push forward solar generation in the domestic markets, which will
somewhat mitigate the above mentioned negatives. LDK Solar
presently retains a short-term Zacks #3 Rank (Hold).
Another operator in the renewable energy zone,
JinkoSolar Holding Co., Ltd.
) is also gearing up its business to tackle the tariff headwinds
by diversifying its operations across the globe. The company was
involved in the supply of PV modules for the development of solar
projects in Germany and South Africa.
With a market capitalization of $200.97 million, Xinyu
City-based LDK Solar and its subsidiaries, engage in the design,
development, manufacture, and marketing of photovoltaic ("PV")
products; and development of power plant projects.
JINKOSOLAR HLDG (JKS): Free Stock Analysis
LDK SOLAR CO (LDK): Free Stock Analysis
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