An update with some concerns on SOLAR.
An update on SOLAR (8.9) and so a note of caution.
I realize that my choice in the alternative energy sector is not without some concerns. As was pointed out in the member lounge a few days ago, some insiders have been selling since the first of the year. This is not a "de facto negative", as it may well be that the silent period since listing has lapsed and so some have been ready to sell, regardless of the companies' medium term prospects. Clearly the insiders still own a huge amount of Solar's shares.
Then I called and sent the below e-mail to my contact person there, SOLAR's CFO Ms. Patama, no reply received.
Here is what I sent Khun Patama on March 29 '06: No reply received to date.
Dear Khun Patama,
As you recall we met twice over the past 3 months, talking about Solartron. I am excited about your company and value being in touch with you. We have hundreds of registered members, besides thousands of visitors to our web site.
I would highly value any short comment on these 2 questions:
1) We note there has been some insider selling of Solar shares by 2 executives of your company, and so we here wonder if you can make any comment on that. Why are insiders selling?
2) It also would be good to know if you still think the Solar new proposed warrants will be approved next month, or if you think there might be a delay in this?
As you may know Thaistocks.com is 9 years old and has a large following among many individuals here in Thailand as around the world, whom have started to understand that Thai small cap investing can be very profitable.
I now have 2 articles at my web site about your company, if you are interested in these and answer my e-mail, I can forward these to you right away.
I sincerely hope to hear from you and thank you in advance for any comments you can share.
Best Regards & Savadicarp,
Paul Renaud.
www.thaistocks.com
Since then we learned that the expected free warrants have been canceled by Solar, and so instead a small dividend of 0.11 Baht has been announced. Again, not an outright negative, but perhaps a confusing signal to the market. Did the Thai SEC not approve their warrants? What was the reason of this change? We don’t' know and are calls are not returned.
By far the largest two reasons I remain bullish on SOLAR, even while I recognize the above shortcomings are:
1) The backward integration of its raw material, silicon wafer to start production by the 1 Q of 2007 with their expanded 1.3 Bill Baht new plant. This is by far the Solar powers' industry biggest headache.
2) Worldwide demand for solar cells ahs been growing 30% a year for the past 3 years and the good times will likely continue. Solarbuzz, a research firm in San Francisco, predicts that the industrial's sales will climb from 10 Bill. US$ to 19 Bill US$, by year 2010. Such prospects have injected high p/e ratio's in Solar stocks. For example Suntech, a hugely successful Chinese solar panel manufacturer, listed on the NYSE, trades at a p/e of 57 and SunPower a California solar cell maker recently traded at a p/e of 131. (See Forbes Magazine, March 27 '06, page 31.)
While I am not advocating a change of opinion today, surely I have become a touch more concerned with this selection. After two visits to this company, I would think they would at least make a mini-effort to answer back? Hence today I sound a note of caution.
I will keep you posted on any new developments. More then anything, I need to hear back from them so to understand the reason for the warrant cancellation and why some insiders have been selling. Let's see if this selling continues.
Best Regards,
Paul A. Renaud.
www.thaistocks.com
