While solar keeps making moves around the world, it might be a good time to take a look at one of the bigger players, LDK (NYSE:LDK), and see if its worth investing.
1. One of the first things investors should know about LDK is that — when it comes to solar — they don’t come much bigger than LDK. The company is China’s second largest manufacturer of the wafers that are used in solar panels — Suntech Power (NYSE:STP) is first. The two companies are the world’s two largest solar manufacturers. As solar demand grows, LDK will likely be one of the biggest suppliers meeting that demand.
2. LDK may be about to drive up its margins as it cuts the cost of production. LDK is going to be upgrading its Mahong polysilicon plant, which should allow it to manufacture wafers at a reduced cost. Upgrades to its facilities should also help LDK maintain a competitive edge against other manufacturers.
3. As mentioned earlier, LDK is based in China — though shares are publicly traded on the New York Stock Exchange — and China is appearing to be a hotspot for solar growth. China already had a goal of 21 gigawatts of energy coming from solar plants by 2015, but recent bouts with smog prompted the government to drastically amp up that goal to 35 gigawatts by the same deadline. It seems likely that a large amount of the material supplying the solar projects would come from China’s own solar manufacturers.
And China’s not the only country boosting its solar demands: Saudi Arabia hopes to generate 41 gigawatts from solar by 2032, and it has already relied on one Chinese manufacturer, Suntech Power, to meet some of those needs, so LDK may see some of the business down the road.