3 The Busy Beaver over at UBS is busy teasing meaning from arbitrary datapoints for the upcoming WFR Q1 report. Sometimes it is not clear in the note(s) that the target is WFR, but watching action in WFR when these notes come out makes it clear he is targeting WFR.
We looked at one of his pieces a while back, but then his note on Apr 10 got my goat. I know, this is not exactly timely, but it is the last thing written on the subject and no one is rushing to WFR’s defense. In this sense it is still relevant even though the note is 2wks old.
The meat of the note can be broken up in the first three paragraphs.
Checks find China’s polysilicon imports declined -40% m/m in Feb-11
Our checks found poly imported into China declined to about 3,000 MT (metric tons) in the month of Feb-11. Our checks found the monthly level of poly imports into China peaked at over 6,000MT in Nov-10 with quarterly imports into China rising for 6 straight quarters since 3Q09, peaking at over 16,000MT in 4Q10.
Eggcellent detail. Volume up for six quarters, now it is down. Not sure how it helps me yet, but nice detail. Very specific. Moving on.
Poly prices into China down -5% m/m in Feb-11, first big decline in a year
Our checks also found Feb-11 poly prices were $65/kg in China after 11 consecutive monthly increases. We found that the average selling price of polysilicon in Feb-11 from the US declined by -25% m/m, poly prices from Germany increased by 7% m/m and poly prices from Korea increased by 2% m/m.
Hold on, Cowboy. Suddenly you’re not specific enough. First off, you need to split the whole ‘poly price’ commentary into two parts and refer to either spot/short term and contract/long term. Just squirting ‘$65/kg’ like a gay manatee really means nothing when the two versions of poly prices are either $75 or $40. Second, since the reference is closer to spot price than contract price and we are speaking of a Theatre District Drama Scene ‘down 25% m/m’ event, further detail is needed. The YGE CFO says spot poly declined ‘mid-teens percent’ and he was apparently referring to a $100 starting price. If we take YGE as the referent for spot poly – and Heaven knows YGE gladly let Nabeel bend it over in 2006, so the CFO ought to know exactly what spot poly prices are – a 25% decline gets you $75, not $65. Further, every reference I have seen for spot prices says it has remained rock solid at ~$75 since Nov10, regardless of whatever fucked up price YGE is stupid enough to say it paid. With a marginal cost near $50/kg, the difference between $65 and $75 is not trivial.
China still importing most of its poly from the US, Korea and Germany
Our checks find China imported 38% of its 2010 polysilicon from the US, 24% from Korea and 22% from Germany. We found that in the month of Feb-11, China’s poly imports from the US declined by -48% m/m, Korea declined -44% m/m and Germany down -34% m/m. We acknowledge it is possible the lower poly imports into China could also mean more poly is now being produced in China.
Alright, now someone needs to throw a flag. What is the context of the m/m decline? Was Jan comparable to Dec? What is the y/y decline given Q1 always sees a seasonal decline in both sales and manufacturing utilization? This entire bullet means nothing and simply forms a dramatic negative without value.
Maybe the rest of the note has details? Let’s look.
Oh, look. A chart with polysilicon imports.
Wait a second, where are the units on the left? No matter, pretty fucking clear that 1Q11 is much higher than 1Q10. Given the massive y/y growth in the solar industry and the near total lack of polysilicon capacity in China back in 2007 and 2008, I really question the flatness on the left hand side of this graph. Meh, I am an ass and a cynic. Moving on.
The next tidbit is that imported poly prices declined only “5% m/m after a steady 30% increase over the last 6 months.” That’s at the bottom of Pg2. Going back to the second bullet of Pg1 we see reference to “a year” and “11 consecutive monthly increases.” Maybe I need to be schooled in the difference between “steady” and “consecutive,” and the difference between “a year” and “11 months” and “6 months.” Oh yeah, look at that. He says Korea and Europe prices both increased. I wonder why Wonder Goofy didn’t bother explaining that massive fucking difference between the three?
Am I being too petty?
Oh yeah, what’s that “E” doing at the end of the “1Q11” in your chart if you collected this data on your own and published it after 1Q11 ended?
OK, we have established I am a nitpicking shit. Let’s look at the next chart.
Whoa Nelly! Do I see prices ticking up q/q? And where are the units on the left side? Wait a sec, I thought he said prices were coming down. Let me re-read that front page…
…yep, he said prices were coming down. Ohhh…in Feb only. I see. Whew. Glad I read the note.
Yeah, so there are lots of other charts in this thing, but I think I am done. No need to read further. Stephen Chin is officially a jackass, especially after boofing a call on RBCN despite a prime opportunity on his part to set things right.
TAFKAT, TAFKAS, Busy Beaver…we’re gonna get ‘em all named soon.
3 Responses to “WFR is a sport”
Panda Bear
AB, what are your thoughts on BRCD here? Seems really cheap and with the cloud taking off, the new ethernet fabric devices have to be selling well. Plus doesn’t it make for a good takeover play?
Furthermore, a lot of startups are getting into the PaaS (Platform as a service) standalone boxes sector. VMWare (OneCloud I think) and Citrix already have skin in the game but other will probably soon follow … Neither CSCO or ORCL have a good storage story when it comes to the cloud appliances. Wouldn’t BRCD fit in well?
Analyst Bomber
Sorry – I have not looked at BRCD in a while. When I look at it now, I must say I am not excited. As a buyout candidate, I would look at EV/S and I see little upside to a 2x buyout valuation. On the other hand, sales do seem to be growing at a decent clip, so maybe you could argue it would be taken out in the 10-12 range. It seems to be right in the middle of its 5yr trading range.
I don’t know what goes into sales development for these characters and whether there any barriers to entry. I am guessing little to none. If I am right, there is no incentive to buy a sales channel.
Bob the Builder
“Squirting like a gay manatee.” That’s pretty classic stuff there….