in defense of LDK's 2 perceived "inventory" issues,
1) the $30m "non-cuurent inventory", ie, lower grade poly material that can't be used within a month,
I have written quite some on this one. Just to summarize, I can see that LDK believes
1.a) these materials are not "obsolete", as they are being used actively but will be used in accelerated rate as LDK ramps up its wafer capacity very steeply, (doubled in 2007, doubling in 2008 and 2009)
1.b) these materials apprecited in market price
1.c) there are raw materials unlike slow moving finished good which can't find a market,
I believe LDK has a very strong case. It's absurd to mark down something went up in price.
my belief is that market will quick get arms around this artificial "inventory" issue and discount it appropraitly.
Or, imho, it's really a non-issue.
2) the second, increase of $150m total inventory from 9/30/2007, end of Q3 to 12/31/2007, end of Q4 2007.
--------------------
Adam.Hinckley@cibc.com
Sanjay Shrestha@lazardcapitalmarkets.com
Satya.Kumar@csfb.com
--------------------
Balance sheet,,,"Q4, 2007",,"Q3, 2007",,"Q2, 2007"
,,,,,,,
,Assets,,,,,,
,Current assets,,,,,,
,-Cash and cash equivalents,,"83,470",,"125,858",,"250,600"
,-Pledged bank deposits,,"135,950",,"106,840",,"2,722"
,"-Trade accounts receivable, net",,"3,767",,"8,666",,"7,825"
,"-Inventories, net",,"349,997",,"224,527",,"173,778"
,-Prepayments to suppliers,,"138,193",,"183,467",,"129,902"
,-Other current assets,,"29,825",,"9,561",,281
,-Deferred income tax assets,,546,,-,,"6,281"
,Total current assets,,"741,748",,"658,919",,"571,389"
,"Property, plant and equipment, net",,"336,763",,"224,477",,"169,330"
,"Deposit for property, plant and equipments",,"151,233",,"136,870",,"40,840"
,"Intangible asset, net",,"1,096",,"1,098",,"1,117"
,Land use rights,,"29,259",,"29,152",,"8,060"
,"Inventories to be processed beyond one year, net",,"29,981",,-,,
,Prepayments to suppliers to be utilized beyond one year,,"18,994",,"10,626",,
,Other financial assets,,525,,-,,
,Deferred income tax assets,,387,,757,,151
,Total assets,,"1,309,986",,"1,061,899",,"790,887"
,,,,,,,
,Liabilities and shareholders’ equity,,,,,,
,Current liabilities,,,,,,
,-Short-term bank borrowings,,"264,101",,"186,559",,"80,036"
,-Trade accounts payable,,"18,032",,"23,044",,"9,525"
,-Advance payments from customers,,"141,223",,"154,931",,"72,232"
,-Accrued expenses and other payables,,"95,301",,"42,278",,"33,592"
,-Other financial liabilities,,"3,357",,-,,
,Total current liabilities,,"522,014",,"406,812",,"195,385"
,"Long-term bank borrowings, excluding current portions",,"25,125",,"29,967",,"29,890"
,Advance payments from customers – noncurrent,,"67,554",,-,,
,Other liabilities,,"2,222",,"2,280",,
,Total liabilities,,"616,915",,"439,059",,"225,275"
,Shareholders’ equity,,,,,,
,,,,,,,
,"Ordinary shares: US$0.10 par value; 134,000,000 shares authorized; 106,044,700 shares issued and outstanding as of September 30, 2007 and December 31, 2007, respectively",,"10,604",," 10,604",,"10,458"
,Additional paid-in capital,,"486,253",,"482,419",,"473,696"
,Statutory reserve,,"18,697",,"3,623",,"3,623"
,Accumulated other comprehensive income,,"31,481",,"14,259",,"?7,505"
,Retained earnings,,"146,036",,"111,935",,"70,330"
,Total shareholders’ equity,,"693,071",,"622,840",,"565,612"
,,,-,,-,,
,Total liabilities and shareholders’ equity,,"1,309,986",,"1,061,899",,"790,887"
Condensed Income Statement,,,,,,,
,Net sales,,"192,769",,"158,724",,"158,724"
,Cost of goods sold,,"-134,729",,"-109,807",,"-109,807"
,Gross profit,,"58,040",,"48,917",,"48,917"
,Selling expenses,,-210,,-348,,-348
,General and administrative expenses,,"-9,503",,"-4,459",,"-4,459"
,Research and development expenses,,"-1,653",,-921,,-921
,Total operating expenses,,"-11,366",,"-5,728",,"-5,728"
,Income from operations,,"46,674",,"43,189",,"43,189"
,Other income/(expenses):,,,,,,
,-Interest income,,"1,967",,"1,846",,271
,-Interest expense,,"-3,060",,"-2,650",,"-2,180"
,"-Foreign currency exchange gain/(loss), net",,"1,479",,"-2,041",,-576
,-Government subsidy,,"1,956",,662,,406
,Income before income tax,,"49,016",,"41,006",,"28,745"
,Income tax benefit,,159,,599,,
,Net income available to ordinary shareholders,,"49,175",,"41,605",,"28,745"
,"Net income per ADS, Diluted",,$0.44 ,,$0.37 ,,$0.29
