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3 Key Sources of Value for LDK Solar's Stock

LDK Solar (NYSE:LDK) is the world's second largest manufacturer of solar wafers - displaced from the top spot by its rapidly growing rival GCL-Poly Energy Holdings last year. The company is also a leading vertically integrated manufacturer of photovoltaic (PV) products and competes with other solar energy players like First Solar ( FSLR ), Suntech Power (NYSE:STP) and Sunpower (NASDAQ:SPWRA). In this article, we enumerate the company's 3 biggest business segments that are responsible for driving more than 80% of the company's stock value - which we estimate at just over $12 .

Our price estimate is at a notable premium to the stock's current market price. We had detailed the reason for our optimism with the stock in our article Taking Another Look at LDK Solar's Upside . The company's recent announcement of repurchasing up to $110 million of its American Depository Shares only strengthens our outlook for LDK.

1) PV Modules, Systems and Other Businesses - represents 40% of the company's stock value

This division's revenues are largely driven by the company's sale of PV modules to resellers, distributors and system integrators. Revenues generated by the company's wafer processing services provided to wafer manufacturers as well as engineering, procurement and construction (EPC) services provided directly to system owners also contribute to this division

See the top forecasts for PV Modules, Systems and Other Businesses division

2) China Wafers - 23%

LDK's solar wafers business has been its mainstay since the company was established in 2005. In our analysis, we have broken down the wafers business into 4 division based on the geographical regions they sell to.

The China Wafers division represents the company's sale of solar wafers in mainland China. The solar wafers are sold to makers of PV cells, PV modules and PV panels. Resellers also contribute to a part of this division's sales. This division sold almost 600 megawatt ( MW ) of solar wafers in 2010.

See the top forecasts for China wafers division

3) Asia-Pacific excluding China Wafers - 20%

This division represent's the company's sale of solar wafers in the Asia-Pacific region, excluding the sales in mainland China. This division sold slightly less than 400 MW of solar wafers in 2010, with almost half of this sales being in Taiwan.

See the top forecasts for Asia-Pacific excluding China wafers division

See our full analysis for LDK Solar

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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