Trina Solar Limited (TSL)

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Trina Solar Ltd. (TSL)

Q4 2009 Earnings Call

February 24, 2010 08:00 a.m. ET

Executives

Thomas Young - Director, Investor Relations

Jifan Gao - Chairman and CEO

Terry Wang - CFO

Sean Tzou - COO

Analysts

Rob Stone - Cowen and Company

Kelly Dougherty - Macquarie

Gordon Johnson - Hapoalim Securities

Lu Heung - BFA Merrill Lynch

Vishal Shah - Barclays Capital

Nitin Kumar - Nomura

Sunil Gupta - Morgan Stanley

Mehdi Hossein - FBR

Presentation

Operator

Good morning. My name is Lisansa and I will be your conference operator today. At this time I would like to welcome everyone to the Trina Solar fourth quarter 2009 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. (Operator Instructions). Thank you. Mr. Young, you may begin your conference.

Thomas Young

Thank you and good day to all and welcome to Trina Solar's fourth quarter and full year 2009 earnings conference call. This is Thomas Young, Trina Solar's Director of Investor Relations. With us today are Trina Solar's Chairman and CEO, Jifan Gao, Chief Financial Officer Terry Wang and Chief Operating Officer, Sean Tzou.

Before I turn the call over to Mr. Gao, may I remind our listeners that in this call managements prepared remarks contain forward-looking statements which are subject to risks and uncertainties and management may make additional forward-looking statements in response to your questions. Therefore the company claims the protection of the Safe Harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995.

Actual results may differ from those discussed today and therefore we refer you to a more detailed discussion of the risks and uncertainties in the company’s filings with the Securities and Exchange Commission.

In addition, any projections as to the company’s future performance represent management’s estimates as of today, February 24, 2010. Trina Solar assumes no obligation to update these projections in the future as market conditions change. For those of you unable to listen to the entire call at this time, a recording will be available via webcast for 90 days at the Investor Relations section of Trina Solar's website at www.trinasolar.com.

With that, it’s my pleasure to turn the call over to Trina Solar’s Chairman and CEO, Mr. Jifan Gao.

Jifan Gao

Thank you, Thomas and good day everyone. Here’s wishing everyone a Happy Chinese New Year and the first year of the Tiger. We're pleased to announce our strong fourth quarter performance, which we believe our increased brand recognition, high quality products and manufacturing cost reductions were key drivers for our growth and margin expansion in 2009. Although ASP declines were felt across the industry, we achieved a year-over-year increase in revenue for 2009.

In the fourth quarter, we continue to improve our cost structure and reduce our blended non-silicon cost to $0.78 per watt in Q4 from $0.82 per watt in Q3.

We established our European and US regional headquarters. We still (inaudible) provide better service to our customers and the (inaudible) to the key solar markets. We accrued 350 megawatt to 400 megawatt demand in the first half of 2010. We continue to see strong demand for our best-in-class products for the second half of 2010 from diverse customer and country sales mix in existing and new PV markets. We continue to focus on our R&D programs through technology development, innovation and application to create solid new products to the markets. We are also expecting to increase (inaudible) for mono and multi-crystalline cells by the end of 2010 upto 19.5% and 18% on a labor tax production respectively.

We achieved positive net operating cash flow of approximately $18 million in Q4. We also improved our balance sheet with a five-year syndicated loan facility. Looking beyond 2010 we believe market outlook continues to be strong and we believe that the declining cost of the solar PV system and implementation of tax change policies will drive growth and pushing countries for vast solar investment policy solar investment (inaudible) proven manufacturing costs and (inaudible) strong financial management, we are well positioned to realize market share gains to secure our market leading position.

With that we would like to turn the call to our CFO, Terry Wang to share our outstanding fourth quarter and the full year 2009 financial results.

Terry Wang

Thank you Mr. Gao. And welcome to everyone participating in today’s call. On this call I’ll like to present an overview of our financial results for the fourth quarter and full year 2009 followed by the company’s guidance for the first quarter and full year 2010.

The fourth quarter was another strong quarter with record shipments volume revenue and gross margin as our cost reduction and efficiency improvements achieved through process and efficiency optimization as well our diversified market and a channel strategy provided solid quarterly and annual results. Although significant ASP declines were experienced throughout the industry, we continue to expand attractive margins as we focus on reducing our manufacturing costs, both silicon and the non-silicon based and increasing productivity, supply chain and efficiency gains throughout our core value areas. Our total net revenue in the fourth quarter was $313.3 million, as the global economic conditions and end market environments continue to improve our (inaudible) brand condition increased demand for our products, and expanded our market share and attrition in established markets as well as both sales in emerging markets to further solidify our leadership in this competitive industry.

This result was our fourth quarter sales near top range of our guidance as $133.7 megawatt representing shipments. The sequential growth in total shipments was primarily due to improved PV system purchased financing conditions in major European markets, and increased year end demand to install new PV systems ahead of [generating] seeking power adjustments in the established PV markets including Germany and Italy.

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