Sponsored Link:

Analysts Unhappy with Internal Inventory Audit Report From China’s LDK Solar

From Staff Reports

Shares of high-flying LDK Solar Co. Ltd. (LDK) fell yesterday (Thursday), even after the Chinese solar wafer maker said an internal audit revealed no evidence of wrongdoing related to the way it reports inventory.

Early Thursday, LDK said it conducted an investigation after its former financial controller, Charley Situ, said the company has been inconsistent in reporting its inventory. Situ, who was fired in September, made the allegations a few days ago, LDK said. The company has asked an independent firm to conduct its own audit.

CIBC World Markets analyst Adam Hinckley has downgraded the stock to "Sector Underperformer," or "Sell," from "Sector Performer." According to Hinckley, investors should sell LDK’s shares and wait for more details about the accusations that Situ made — and more proof from LDK about the audit it conducted to prove it did no wrong.

"We view the [LDK] press release as unsatisfactory, as it does not disclose the specifics of the allegations and leaves questions unanswered," Hinckley wrote in an investment note to clients.

Clay Sumner, an analyst for Friedman Billings Ramsey, said the controversy could hurt LDK’s efforts to boost its capacity, opening the door for rival MEMC Electronic Materials Inc. (WFR).

LDK, which makes multicrystalline solar wafers used in solar panels, said Wednesday it had signed a five-year contract to supply multicrystalline solar wafers to Taiwan-based Solartech Energy Corp. Contract pricing is fixed for the first three years of the deal, LDK Solar said. During these three years, LDK is to deliver solar wafers worth about $224 million to Solartech.

News and Related Story Links:


More on this topic (What's this?)
LDK Solar (LDK) Sells 15% Stake In Xinyu City Plant (Green Stocks Central, 11/18/09)
LDK Solar (LDK) Closed Near Lows Of Day Despite Raising Guidance (Green Stocks Central, 10/27/09)
USA Today: China Pushes Solar, Wind Development (The Wikinvest Daily Angle, 11/19/09)
Debt – the fall of the U.S. economic empire (Contrarian Profits, 11/18/09)
Read more on LDK Solar, Investing in China at Wikinvest
October 5th, 2007

Why Gold Will Surpass $2,500

Few investors realize that inflation is the least of the factors driving the bull market in gold. Other factors, like Venezuela's crackdown on gold exports, are likely to push prices higher. Find out how to play each of the "7 Key Drivers" in our Money Morning Publisher's Series report... Go here to get it for free.




This entry was posted on Friday, October 5th, 2007 at 2:05 pm and is filed under Alternative Energy, China, Chinese Investments, Global Investing, Investing In China, Solar, Top News. You can follow any responses to this entry through the RSS 2.0 feed. Due to the amount of comments we receive Money Morning will not be able to respond to all questions. If you have not already registered to leave a comment, once doing so you will receive Money Morning's Daily Email. Responses are currently closed, but you can trackback from your own site.