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- 2005-3-7
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CLSA20057月继去年之后发表第二版PV分析报告
这份报告对PV市场保持了更为乐观的预测
Despite risks, CLSA diagnoses rosy future for PV – at least for the big fish
Michael Rogol of Credit Lyonnais Securities Asia (CLSA), arguably PV's most zealous investment analyst, maintains his bullish position in the second Sun Screen report, forecasting an annual 6 MW market by the end of the decade – in spite of tight silicon supply and expectations of Germany's pro-PV government being chucked out of office. But his predictions of tripling revenues and profits by 2010 are only valid for »well-positioned« players, leaving readers to ponder what fate awaits many of the more than 600 companies CLSA interviewed.
Painting a sunny picture for solar investors, CLSA expects a 30 percent annual growth for cell production while revenues more than triple over five years.
With a tightening supply of silicon feedstock – PV's all important mother's milk – and the likely exit of a German government that heralded the world's most successful PV incentive scheme, this would seem an appropriate moment for PV industry heads to start suffering from anxiety attacks over fears that the sector's bubble is about to burst.
Not to worry, says investment analyst Michael Rogol. The solid investment in solar »looks nothing like a bubble,« writes the 33-year-old financial researcher for brokerage firm Credit Lyonnais Securities Asia (CLSA) in »Sun Screen II – Investment Opportunities for the Solar Sector,« published in July. While the sunny beach cover of the 78-page report showing lazing sunbathers is very similar to the title page of the initial study done in July 2004 (see PI 9/2004, p. 52), the new edition adds frolicking adults, children, and pets, a graphic update perhaps meant to send a subliminal message that all is well in the world of PV.
Indeed, a healthy subconscious may be what Rogol wants to unveil at this moment of PV market angst. Despite his researcher's guise, Rogol seems to have acted as much as a psychoanalyst as an investment analyst during his interviews. In Freudian fashion, Rogol and his team have carefully listened to representatives from over 600 solar-related companies, discovering that even those experiencing a sky-is-falling dread of what may come nevertheless maintain latent positive outlooks. This exhaustive screening process – hence the study's pun-intended name – has led Rogol to conclude that investors, rather than cashing in on the sector's profitable stock year, should be positioning themselves for a market with a »significant upside« and share prices that he believes could appreciate threefold over two or three years. Any volatility due to risks Rogol delves into can be moderated by a balanced portfolio of solar stocks. His interview-based prediction is that annual cell production will expand form 1.15 GW in 2004 to1.5 GW in 2005 and then at least quadruple to 6 GW by the end of the decade, during which time revenue should increase from $8.3 billion in 2004 to $36.1 billion in 2010, and pre-tax profits from $1.2 billion to $6.4 billion.
But there is a catch. This »strong conviction« only applies to what he describes as »well-positioned players« who have set up long-term contracts in a tight silicon-feedstock supply world. The fate of small players leaves them »at risk of being 'squeezed out' of the market.« This Darwinian survival-of-the-fittest description implies Rogol will have far fewer companies to interview next time around as the big fish eat the small fry.
Rogol, who has meted out some highlights of the report's findings over the past few months in PHOTON International as a regular commentator (see PI 5/2005, p. 106; PI 6/2005, p. 74; and PI 7/2005, p. 46), has extended many projections to the end of the decade – and even beyond in some cases – punctuating the Sun Screen report with well over a hundred informative tables and charts. Often described as »rough estimates,« together they reveal the incredible depth of research and forecasting Rogol has undertaken.
The German question
Reading Sun Screen II – even more optimistic than its already very upbeat predecessor – there is no doubt that Rogol lives on the sunny side of solar street. Where others see black thunderclouds, Rogol sees blue skies. Take the most recent bump in the road – the uncertain future of Germany's pro-solar Social Democratic Party (SPD). The country's ruling party – which along with its coalition partner, the Greens, championed the all-important PV feed-in tariff as part of the country's Renewable Energy Law (EEG) that has helped catapult Germany past Japan in terms of installed PV capacity – suffered poor results in regional elections. On May 23, as SPD Chancellor Gerhard Schröder quickly called for national elections – a vote his party is likely to lose to the conservative Christian Democratic Union (CDU) come September – worldwide solar stocks immediately took an 8-percent hit (Germany's SolarWorld dropped a full 14 percent). While this has set off an undercurrent of shockwaves throughout the PV community, Rogol is skeptical that it would hurt either Germany's or, by extension, the world's PV sector – as he points out, solar stocks have since rebounded from the brief downturn. Based on CLSA's interviews with people active in German politics, he concludes the market could only be harmed if the current EEG were completely rescinded, something Rogol describes as »rare and politically difficult« –- especially since the solar sector has created up to an estimated 65,000 jobs since 2000 during tough economic times and Germans hold very »green« environmental views. »While there might be a war of attrition by opponents trying to recapture lost land,« he writes, »it is highly unlikely that there will be much backward movement because there are too many jobs at stake, and too many people who already have solar on the roofs.« Even in the improbable case that changes to EEG mainstays, such as eliminating non-rooftop applications – important for getting multi-megawatt systems installed – or accelerating the annual 5-percent decrease for newly installed residential rooftop systems, Rogol believes the »back-up« demand driven by strong policy support in 40 worldwide markets could take up any slack. As all of his contacts agreed anyway, there is »no realistic potential for production to meet end-customer demand before 2008« due to the silicon shortage.
And on the subject of the tight silicon supply, which he lists as the sector's number one risk, Rogol should be given credit for shedding light on a murky and difficult-to-predict topic that haunts the industry more than any other. Ironically it is just that fear, he says, which has made a real problem worse. Panicking players – from cell companies to wholesalers and installers – have entered into the role traditionally played by ingot and wafer companies, he points out, in a frantic search for the mother lode of silicon, bringing about »a shortage mentality that creates artificial demand and even hording.«
Feedstock costs going up
Given the insatiable demand for PV systems, the major cell producers (interestingly, BP Solar, the 2004 number three cell producer, is not mentioned at all in the body of the report) would »surely utilize more silicon feedstock« if available, Rogol writes. He reckons that the tight supply will only loosen up as companies agree to long-term contracts, as many are doing now. Feedstock manufacturers, burned when the tech bubble burst in about 2000 and the demand for the semiconductor industry's electronics-grade silicon (EG-Si) shrank, are insisting on guaranteed money up front before investing in the ramp-up of capacity. PV customers are currently paying between $35 and $45 per kg for solar-grade silicon (SoG-Si), depending on aspects such as duration and volume, as compared to earlier contracts with a 2005 average of about $26. Costs are expected to peak around $50 in 2006 (up 39 perecent from the $36 Rogol predicted in the Sun Screen I report), then decline to $45 in 2007, but only to $40 for the following two years as end-customer demand continues to outpace supply through the end of the decade. The big winners are the silicon manufacturers, which – as he estimates in one table – will still be earning pre-tax profit margins of 35 percent, the largest along the supply chain. In other words, the feedstock manufacturers have mid-stream PV companies over a price barrel, and those with deep pockets will have the best chances not only to survive these hard times, but even thrive.
Current increases to capacity are incremental, based on de-bottlenecking of production and running silicon plants harder with less maintenance. While raising the unlikely, but frightening possibility of plant accidents and production shutdowns, this has allowed what Rogol calls »capacity creep,« where silicon customers have been able to obtain hundreds of tons of SoG-Si in spot purchases. He is predicting capacity for both SoG-Si and EG-Si (typically costing $10 per kg more than for SoG-Si) will be increased to at least 65,000 tons by 2010, more than double the available supply of 32,000 tons in 2004 when 14,000 tons was used for solar. SoG-Si availability should increase to 16,000 tons for 2005 on a total production of about 36,000 tons, and 19,000 tons of SoG-Si out of a total of 42,000 tons in 2006. Beyond that, he makes no predictions for SoG-Si supplies, warning only that if EG-Si demand increases faster than the expected 5-percent annual growth, this »would put a further squeeze on silicon supplies for the solar sector and create more volatility.«
One bright spot could be from stock-listed Japanese silicon supplier Tokuyama, which has set up pilot production of a vapor-to-liquid deposition (VLD) process for polycrystalline silicon with the promise of faster production and lower costs. While a 2,000 ton commercial plant could start in mid-2008, bumped up to 5,000 tons in 2009, with similar size factories coming on line every couple of years thereafter (see PI 5/2005, p. 24), the quality is currently only sufficient for SoG-Si, writes Rogol, not semiconductors.
While Rogol says nothing about the tight supply opening a window of opportunity for less silicon-intensive concentrating PV (for an in-depth look, see PI 7/2005, p. 50), he does expect the situation to help non-crystalline silicon technologies double 2005 production to 140 MW and expand to 240 MW in 2006 (although not mentioned in the study, Rogol oddly includes in this HIT cells from Sanyo, a company which produced 65 MW of the cells in 2004).
Rapid growth still in the cards
As to Rogol's prediction of the rapid growth for c-Si technologies, this is based largely on a continued increase in cell efficiencies and thinner wafers. Discussions with several top industry executives have convinced him to revise a prediction on silicon usage per watt, from 13 g in 2004, shrinking by 1 g per year till reaching 7 g per W in 2010, well below last year's Sun Screen prediction of 10 g.
Despite the silicon shortage and other risks that could affect demand for PV – including a drop in oil prices, a rise in interest rates, and a backlash from utilities – overall the industry could even outdo his prediction of at least 30 percent annual growth leading to his 6 GW prediction for 2010. In a best-case scenario, according to senior industry executives he talked with, a growth of at least 40 percent is possible if silicon feedstock production exceed expectations while silicon usage for wafers declines, leading to a 2010 production of 8.7 MW. Judging by orders placed with equipment manufacturers, which Rogol calls »a good leading indicator for volume growth rates,« CLSA believes that a 10 GW level is not »out of the question.«
Rogol even puts a positive spin on the tight silicon supply, a kind of blessing in disguise for mid-stream players, at least again for the larger companies with deeper pockets and long-term contracts that can pass costs on up the supply chain. This will lessen price competition, increasing revenues and margins, thus creating »windfalls for the better-positioned players« – and this despite the fact that the year-on-year percentage of revenues and pre-tax margins are expected to start declining in 2007.
Rogol does not give much weight to a concern expressed by some company representatives that if prices for solar rose at the same time as growth rates were strong, it could lead to diminished support among policy makers. Although logical, he has seen no evidence of this, saying he expects »greener« government and corporate policies to continue through the end of the decade. In a footnote, he adds that CLSA will keeps it eye on any loss of »PV momentum,« but remarks that diverse scenarios such as possible nuclear power plant accidents or higher fuel costs mean policy support will not weaken »in the foreseeable future.«
And certainly not if Rogol's rough estimates on global average prices are close to being accurate. This could be considered the most incredible – and crucial – piece of analysis in the whole report. Rogol forecasts a 10-percent increase in module prices in 2005, halving to a 5-percent rise in 2006, dropping thereafter so that in 2008 prices would be below the 2004 level of $3.25 per W. The beauty of this is that, according to Rogol's reckoning, the two years of module price increases would have a minimal effect on end-user prices since BOS and installations costs will continue to fall. Rogol expects only a 2-percent jump in installed costs in 2005, staying flat in 2006, then dropping 5 percent in 2007 to $7.10 per W – or about 2 percent lower than his figure for installed prices of $7.25 in 2004 – and down to $6.02 in 2010.
But there is an alternative view that CLSA, he later says, has decided not to incorporate into its calculations. Under this scenario, mid-stream companies with low utilization rates of equipment would attempt to recoup investments by raising module prices in 2006 by 10 percent – double Rogol's 5-percent prediction – leading to an end-customer price increase of 3 percent to about $7.60 per W. As part of this alternative view, three factors could then combine to drop prices from 2007 onward faster than Rogol's prediction, and thus undercut margins: if Germany's annual 5-percent decrease to its feed-in tariff for new residential installations was accelerated; if very fast production cost reductions allowed manufacturers to lower prices while maintaining profits; and if there is an overcapacity driven by the introduction of new entrants, such as China, that are willing to cut prices to gain market share.
Cryptic warning for future margins?
And China actually figures into a somewhat cryptic warning Rogol makes to the bottom lines for well-positioned PV businesses in the century's second decade. »We do not expect to see the sector turn unprofitable before 2010,« he writes. While undoubtedly intended to mollify fears that only »modest margin contraction« could be experienced in some areas starting in 2008, if turned around, the implication could be that the emerging Asian tigers, especially China, could dampen the prospects for the financial reports of Japanese, German, and US PV companies. In the mid-term, says Rogol, who spent a week in China investigating the market, the country's rapid PV expansion is »not a major risk« to the solar sector due to the silicon shortage and the fact that Chinese players are operating at »very low utilization rates.« The largest impact for now will be from Chinese assemblers of modules, which Rogol expects to increase from 300 MW this year to 500 MW in 2006. But in the longer term, »beyond 2008 and perhaps beyond 2010,« Rogol believes China will emerge as one of the world's largest solar producers with the »potential to drive down global utilization rates and margins.«
With information like that, the Sun Screen II report is obviously a must-have for all industry executives to include in their summer reading lists. But the investors are the real audience for this information-rich publication. As such, CLSA has put together an investor's portfolio of 15 solar stocks intended to offset the risks faced by the sector (for a look at the portfolio choices, see Rogol's article on p. 52).
This coming year should show whether CLSA has picked winners. If yes, there will be stock-happy smiles all around. If not, investors who have bitten the bullet may want to rush set up their psychoanalysis appointments in order to beat out a throng of industry executives seeking solace for their nerve-wracked PV psyches. |
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发表于 2005-10-4 16:54
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