LDK bounces back , Hoku up as well

As I commented yesterday , it was a typical market overreaction that took down LDK down 20% on the inventory issue.The decline was far in excess of what could have been the business downside ( even if the inventory was over reported) . The LDK management also did its bit to shore up the stock by preannouncing Q3 revenue guidance 25% above its previous guidance given earlier. The stock is back up 20% in early market trading and looks a decent buy at these levels given their strong performance till date and growth plans. Will be interesting to watch how the inventory issue pans out in the coming days. Other Chinese stocks were also up in sympathy like yesterday
Hoku today gave out a contract to build TCS ( tri chloro silicane) to an engineering company . Note that TCS is a critical raw material for the production of Polysilicon . As has been the case with Hoku prices go sharply by 10-20% on any fresh news of construction . The company which has no revenue or earnings to speak of plans to build a 2.5k ton poly plant by 2008 end and has already signed numerous contract with downstream players like Sanyo on supplying this material. With poly expected to go into potential oversupply by 2009-10 it remains to be seen how this company will fare in the future as it has put all its eggs in the poly basket. With much bigger players in the poly area and downstream players also moving into poly production , this company without any track record whatsoever in the chemicals / poly field
I would never buy into this one.