HOKU

[David Randolph]

June 15th, 2007:

Initial Video Analysis for HOKU:

[David Randolph]

June 25th, 2007:

Ok, I was obviously wrong when I gave HOKU a 6 out of 10 rating, since the stock has been on a gang buster's run up. There was a new press release last Wednesday, that basically dismissed my worries and gave the company even more potential:

• Hoku Scientific and Solar-Fabrik Subsidiaries Sign Polysilicon Supply Agreement Hoku Announces Plans to Increase Size of Polysilicon Plant and Change in Solar Strategy
Marketwire (Wed, Jun 20)

They're increasing capacity to 3,000 metric tons of polysilicon per year and they now have almost all the money they need to complete the factory.

Also, because the contract with SunPower ($678 M) and this new one for $185 M, just a few days after, make the market think that several more deals can be in the pipeline. That's why HOKU is running like crazy over the last few days.

I should have bought it today at the open

[David Randolph]

StockLemon didn't have nice things to say about HOKU:

Citron Warns on Hoku Scientific

Even though Citron has been wrong in the past (like everybody else), especially on SYX, I find their research quite useful. He cites my concern about net profit margin of a business producing what is essentially a commodity (polysilicon)

HOKU reached the long term optimal selling price given by my valuation model a few days ago.

[David Randolph]

Significant news out for HOKU this morning:

• Hoku and Solarfun Sign $306 Million Polysilicon Supply Contract
Marketwire (Mon 8:30am)

The stock is up 40% in the pre-market ... unfortunately HOKU already had this type of news in the past and the stock didn't hold up to the early gains. I wonder if there's heavy dilution going on here, or if it is just a case of "great future, but no revenues now, so "investors" don't buy it".

[kslifka]

HOKU gets financing...maybe David could give his opinion of the financing details.

http://biz.yahoo.com/iw/071205/0336568.html

Hoku Scientific Announces Progress on Financing Polysilicon Plant
Wednesday December 5, 4:30 pm ET

KAPOLEI, HI--(MARKET WIRE)--Dec 5, 2007 -- Hoku Scientific, Inc. (NasdaqGM:HOKU - News) today announced that it has signed a non-binding term sheet with Merrill Lynch for Hoku Materials, Inc., its wholly owned subsidiary, to borrow approximately up to $185 million for the construction, procurement and start-up of its planned polysilicon production plant in Pocatello, Idaho. The closing of the loan and the availability of the funds to Hoku Materials is subject to several conditions, including the completion by Merrill Lynch of its due diligence, the negotiation and execution of definitive loan and collateral documents, and the receipt of third-party consents. In addition, prior to receiving any of the loan proceeds, Hoku Scientific will be required to provide Hoku Materials with approximately $35 million in cash for use in the construction of the planned polysilicon plant. To meet this and other capital requirements, Hoku Scientific will be required to secure additional financing.

ADVERTISEMENT
"Signing this term sheet is a milestone step towards financing the construction of our polysilicon plant," said Dustin Shindo, Chief Executive Officer of Hoku Scientific.

The Pocatello facility is expected to produce approximately 2,500 metric tons of solar-grade polysilicon per year when it is running at full capacity, and the first customer shipments are planned for the beginning of 2009. Hoku recently announced plans for Phase II of its planned polysilicon facilities, which would increase its capacity beyond 2,500 metric tons per year to meet its obligations to Solarfun Power Hong Kong Limited. Hoku began construction in May 2007 of its Phase I, 2,500 metric tons per year, facility, and estimates that total construction costs for Phase I will be approximately $290 million.

In addition to the loan and Hoku's cash contribution, Hoku's customers, SANYO Electric Co., Ltd., Suntech Power Holdings Co., Ltd., Global Expertise Wafer Division Ltd., and Solarfun Power Hong Kong Limited, have committed to prepay a combined total of approximately $240 million for future product shipments to support Hoku's construction and start-up costs. Receipt by Hoku of these prepayments is subject to Hoku's successful completion of specified plant construction, process implementation and production milestones.

This non-binding term sheet will expire on the earlier of the termination of negotiations between the parties or May 31, 2008. In addition, as the term sheet is preliminary and non-binding there may be additional material closing conditions required in connection with any transaction.

About Hoku Scientific, Inc.

Hoku Scientific (NasdaqGM:HOKU - News) is a diversified clean energy technologies company with three business units: Hoku Materials, Hoku Solar and Hoku Fuel Cells. Hoku Materials plans to manufacture, market, and sell polysilicon for the solar market from its plant currently under construction in Pocatello, Idaho. Hoku Solar is a provider of turnkey photovoltaic systems in Hawaii. Hoku Fuel Cells has developed proprietary fuel cell membranes and membrane electrode assemblies for stationary and automotive proton exchange membrane fuel cells. For more information visit www.hokuscientific.com.

[David Randolph]

HOKU moves sharply when there are news out, but ever since Citron Research issued a warning on the stock, I'm somewhat afraid of touching it.

And the truth is HOKU has no relevant revenues to date and it loses money each quarter. They say production is set to start in Q1 2009 ...

On the other hand I read (somewhere) a research piece showing the stock has the potential to be a 10-bagger.

I'll keep studying HOKU.