Investing Chinese Solar - LDK Solar

The high flying Chinese Solar stocks used to be traded in the high $40 to $50 range back in 2008 as oil price was in triple digits.  However following the energy bubble burst, many of these Chinese Solar stocks were traded in single digit and out of the investors radar for almost 2 years.  However as crude oil price has gradually climbed back above $90 per barrel and heading to triple digits again, this is probably time to revisit the forgotten Chinese Solar companies.


LDK Solar (NYSE:LDK) is the world's leading solar wafer producer with annual production of 18,000 metric tons expected this year.  Although the company stumbled in 2009 with a net loss of $234 million for that year, the first three quarters of 2010 have been outstanding with $145 million net income accumulated already.  Revenue for the first three quarters of 2010 have has also reached $1.56 billion, 50% more than the entire year LDK Solar made in 2009 and almost the same as the previous high of $1.6 billion in 2008 when the stock was traded above $50 per share at one point.  


LDK Solar yesterday raised outlook for the fourth quarter of 2010 and fiscal year 2011 to $910 million and $3.7 billion respectively.  This would put annual revenue for 2010 around $2.5 billion, 150% more than 2009 and 56% more than 2008.  LDK is currently traded at $12.2 per share with P/E ratio of 12.44 and market cap of $1.6 billion.  The technical chart shows positive signal with stock traded above 50 day and 200 day moving average while KD lines are on the rise.  With strong fundamentals, we should this LDK reaching $20 per share soon.