##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
   Form 20-F
 (Mark One)o

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)
    OR (g)
    OF THE SECURITIES EXCHANGE ACT OF 1934ORþ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          too

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell
    company report   001-33464
  LDK Solar Co., Ltd.
 (Exact name of Registrant as
    specified in its charter)
  N/A(Translation of Registrants
    name into English)
  Cayman
    Islands(Jurisdiction of incorporation or
    organization)
  Hi-Tech
    Industrial Park
    Xinyu City
    Jiangxi Province 338032
    Peoples Republic of China(Address of principal executive
    offices)
  Securities
    registered or to be registered pursuant to Section 12(b) of
    the Exchange Act.
  Title of each class

Name of each exchange on which registeredAmerican Depositary Shares, each representing one ordinary share
    of par value $0.10 per share


New York Stock Exchange, Inc.   Securities
    registered or to be registered pursuant to Section 12(g) of
    the Exchange
    Act. None(Title of Class)
  Securities
    for which there is a reporting obligation pursuant to
    Section 15(d) of the Exchange
    Act. None(Title of Class)
  Indicate
    the number of outstanding shares of each of the issuers
    classes of capital or common stock as of
    the close of the period covered by the annual report.
  Shares, par value $0.10 per share


106,044,700   o þ
  o þ
  þ o
  Rule 12b-2
 o o þ
  o þ
  Rule 12b-2 o þ
    o o




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Table of
    Contents
  PagesCertain Terms and Conventions


4Exchange Rate Information


5Forward-Looking Statements


6PART IITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
    ADVISORS


8ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE


8ITEM 3.

KEY INFORMATION


8A. Selected Financial Data


8B. Capitalization and Indebtedness


11C. Reasons for the Offer and Use of
    Proceeds


11D. Risk Factors


11ITEM 4.

INFORMATION ON THE COMPANY


33A. History and Development


33B. Business Overview


34C. Organization Structure


54D. Property, Plants and Equipment


54ITEM 4A.

UNRESOLVED STAFF COMMENTS


54ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS


54A. Operating Results


54B. Liquidity and Capital Resources


74C. Research and Development, Patents and
    Licenses, Etc.


78D. Trend Information


78E. Off-Balance Sheet Arrangements


81F. Tabular Disclosure of Contractual
    Obligations


82ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES


83A. Directors and Senior Management


83B. Compensation of Directors and Officers


85C. Board Practice


86D. Employees


88E. Share Ownership


89ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY
    TRANSACTIONS


92A. Major Shareholders


92B. Related Party Transactions


92C. Interests of Experts and Counsel


94ITEM 8.

FINANCIAL INFORMATION


94A. Consolidated Statements and Other
    Financial Information


94B. Significant Changes


95ITEM 9.

THE OFFER AND LISTING


95ITEM 10.

ADDITIONAL INFORMATION


95A. Share Capital


95B. Memorandum and Articles of Association


95C. Material Contracts


103D. Exchange Controls


103 2




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PagesE. Taxation


103F. Dividends and Paying Agents


108G. Statement by Experts


108H. Documents on Display


108I. Subsidiary Information


108ITEM 11.

QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT
    MARKET RISK


108ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY
    SECURITIES


110PART IIITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND
    DELINQUENCIES


111ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
    HOLDERS AND USE OF PROCEEDS


111A. Material Modification to the Instruments
    Defining the Rights of Security Holders


111B. Material Modification to the Rights of
    Registered Securities by Issuing or Modifying or any Other Class
    of Securities


111C. Withdrawal or Substitution of a Material
    Amount of the Assets Securing any Registered Securities


111D. Change of Trustees or Paying Agents for
    any Registered Securities


111E. Use of Proceeds


111ITEM 15.

CONTROLS AND PROCEDURES


111ITEM 16.

RESERVED


111ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT


111ITEM 16B.

CODE OF ETHICS


112ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES


112ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
    COMMITTEES


112ITEM 16E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND
    AFFILIATED PURCHASERS


112PART IIIITEM 17.

FINANCIAL STATEMENTS


113ITEM 18.

FINANCIAL STATEMENTS


113ITEM 19.

EXHIBITS


113EX-4.36 Supply Agreement, dated July 18, 2007EX-4.37 Guarantee Agreement dated February 5, 2007EX-4.38 Guarantee Agreement dated December 29, 2006EX-4.39 Guarantee Agreement dated March 20, 2006EX-4.40 Cooperation Agreement dated January 23, 2007EX-8 List of Subsidiaries.EX-12.1 CertificationEX-12.2 CertificationEX-13.1 CertificationEX-13.2 Certification   3




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CERTAIN
    TERMS AND CONVENTIONS                  
    off-grid applications are to applications of
    photovoltaic products to systems that operate on a stand-alone
    basis to provide electricity independent of an electricity
    transmission grid; and
    on-grid applications are to applications of
    photovoltaic products to systems that are connected to an
    electricity transmission grid and feed electricity generated
    into the electricity transmission grid. 4




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EXCHANGE
    RATE INFORMATION      Noon Buying RatePeriod

Period End

Average

High

Low(Renminbi per $1.00)2003


8.2767



8.2771



8.2800



8.27652004


8.2765



8.2768



8.2774



8.27642005


8.0702



8.1826



8.2765



8.07022006


7.8041



7.9579



8.0702



7.80412007


7.2946



7.6058



7.8127



7.2946October


7.4682



7.5016



7.5158



7.4682November


7.3850



7.4212



7.4582



7.3800December


7.2946



7.3682



7.4120



7.29462008January


7.1818



7.2405



7.2946



7.1818February


7.1115



7.1644



7.1973



7.1100March


7.0120



7.0722



7.1110



7.0105      5




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FORWARD-LOOKING
    STATEMENTS      
    our goals and strategies;
    our future business development, results of operations and
    financial condition;
    our plans to expand our solar wafer production capacity;
    our plans to construct polysilicon facilities and to manufacture
    polysilicon;
    expected growth of and changes in the multicrystalline wafer
    industry, photovoltaic power industry and renewable energy
    industry;
    our ability to maintain and strengthen our position as a leading
    solar wafer producer globally;
    our ability to maintain strong relationships with any particular
    supplier or customer;
    effect of competition on demand for and price of our products;
    determination of the fair value of our ordinary shares and
    preferred shares;
    any government subsidies and economic incentives to the solar
    power industry; and
    PRC governmental policies regarding foreign investments.     6




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7




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PART I  ITEM 1.
    IDENTITY
    OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS    ITEM 2.
    OFFER
    STATISTICS AND EXPECTED TIMETABLE    ITEM 3.
    KEY
    INFORMATION  A.
    Selected
    Financial and Operating Data      8




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Period fromJuly 5 toDecember 31,

Year Ended December 31,2005

2006

2007(in thousands, exceptper share and per ADS data)Consolidated Statement of Operations DataNet sales

$



$
105,454


$
523,946Gross
    profit(1)






41,492



170,237(Loss) income from
    operations(2)


(143
)


37,145



146,802Interest expense and amortization of discount on exchangeable
    notes(3)


(102
)


(7,133
)


(9,419
)(Loss) earnings before income tax benefit


(309
)


30,069



143,301Net (loss)
    income(4)

$
(274
)

$
30,182


$
144,059Accretion of Series A, Series B and Series C
    preferred shares to redemption values






(2,729
)


(4,937
)Deemed dividend to Series A preferred shareholders






(1,568
)


Net (loss) income available to ordinary
    shareholders(4)


(274
)


25,885



139,122(Loss) earnings per ordinary
    share(4)(5)Basic

$
(0.01
)

$
0.35


$
1.50Diluted

$
(0.01
)

$
0.35


$
1.37(Loss) earnings per ADSBasic

$
(0.01
)

$
0.35


$
1.50Diluted

$
(0.01
)

$
0.35


$
1.37Ordinary shares used in
    computation(5)Basic


75,000



75,000



92,674Diluted


75,000



75,000



104,859     (1)
    
    Gross profit for the years ended
    December 31, 2006 and 2007 reflected $174,000 and
    $1,772,000 of share-based compensation expense allocated to cost
    of goods sold, respectively.(2)
    
    Income from operations for the
    years ended December 31, 2006 and 2007 reflected $2,028,000
    and $9,390,000 of share-based compensation expense, respectively.(3)
    
    Interest expense for the year ended
    December 31, 2006 and 2007 included $4,440,000 and nil
    related to debt discount amortization for the embedded
    beneficial conversion feature of our exchangeable notes. See
    note 11 to the audited consolidated financial statements
    beginning on
    page F-1.(4)
    
    Our PRC subsidiary, Jiangxi LDK
    Solar, is entitled to exemption from PRC national enterprise
    income tax for at least two years and PRC local enterprise
    income tax for at least five years, each beginning with calendar
    year 2006. Without this tax holiday, our income tax expense
    would have increased and our net income and net income available
    to ordinary shareholders would have been reduced by
    approximately $12,387,000 and $53,316,000 for the years ended
    December 31, 2006 and 2007, respectively. Our basic
    earnings per ordinary share would have been reduced by $0.17 and
    $0.58 for the years ended December 31, 2006 and 2007,
    respectively, and our diluted earnings per ordinary share would
    have been reduced by $0.17 and $0.51 for the years ended
    December 31, 2006 and 2007, respectively.(5)
    
    All share and per share data have
    been presented to give retrospective effect to our
    reorganization as described above. 9




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As of December 31,2005

2006

2007(in thousands)Consolidated Balance Sheet DataCash and cash equivalents

$
9,687


$
30,227


$
83,470Inventories, net






94,886



349,997Prepayments to suppliers






37,718



138,193Total current assets


20,815



172,746



741,748Property, plant and equipment, net


10,491



100,875



336,763Deposit for property, plant and equipments


306



11,090



151,233Inventories to be processed beyond one year, net










29,981Prepayment to suppliers to be utilised beyond one year










18,994Total assets


31,647



292,719



1,309,986Short-term bank borrowings






56,765



264,101Advance payments from customers


3,717



40,002



141,223Total current liabilities


20,348



117,486



522,014Advance payments from customers-noncurrent










67,554Total liabilities


20,348



147,733



616,915Series A, Series B and Series C preferred shares






87,744



Total shareholders equity

$
11,299


$
57,242


$
693,071     Period from July 5

Year Ended December 31,to December 31, 2005

2006

2007(in thousands)Consolidated Statement of Cash Flows DataNet cash provided by (used in) operating activities

$
2,511


$
(57,067
)

$
(80,663
)Net cash used in investing
    activities(1)


(20,940
)


(79,564
)


(328,623
)Net cash provided by financing
    activities(2)

$
28,077


$
154,891


$
462,324     (1)
    
    Includes purchase of property,
    plant and equipment of approximately $15.5 million,
    $72.8 million and $305.2 million in 2005, 2006 and
    2007, respectively.(2)
    
    Includes proceeds from the issuance
    of our shares of nil, $10,000 and $369.5 million in 2005,
    2006 and 2007, respectively.    Period from July 5

Year Ended December 31,to December 31, 2005

2006

2007Other Financial and Operating DataGross
    margin(1)






39.3
%


32.5
%Operating
    margin(2)






35.2



28.0Net
    margin(3)






28.6
%


27.5
%Net sales of wafers (in thousands)





$
102,452


$
501,733Wafers sold (in MW)






45.2



223.8Average wafer selling price (per watt)





$
2.27


$
2.24      (1)
    
    Gross margin represents gross
    profit as a percentage of net sales.(2)
    
    Operating margin represents income
    from operations as a percentage of net sale.(3)
    
    Net margin represents net income as
    a percentage of net sales. 10




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B.
    Capitalization
    and Indebtedness    C.
    Reasons
    for the Offer and Use of Proceeds    D.
    Risk
    Factors  Investment in our securities including our ADSs and ordinary
    shares involves a high degree of risk. You should consider
    carefully the following information about these risks and
    uncertainties, together with other information contained in this
    report, before you decide whether to buy or hold our
    securities.
  Risks
    Relating to Our Company and Our Industry
  Our
    operating history is short and may not provide you with an
    adequate basis upon which to evaluate our business and
    prospects.
    If we
    are not able to manage our rapid growth effectively, our results
    of operations may be adversely affected.
    Failure
    to secure sufficient quantities of polysilicon feedstock on
    commercially reasonable terms could adversely affect our
    business and results of operations.
   11




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There
    are a limited number of suppliers of virgin polysilicon
    feedstock and failure or delay by any of our polysilicon
    suppliers in delivering supplies to us could adversely impact
    our production and delivery schedule and harm our
    reputation.
       12




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Failure
    to complete our polysilicon production plant and bring it up to
    full operation within budget and on schedule could adversely
    affect our results of operations and our business expansion
    strategies.
  start-up,
  
    the need to procure additional equipment at reasonable costs and
    on a timely basis;
    the need to raise additional funds to finance the construction
    and ramp-up
    of the polysilicon plant, which we may be unable to obtain on
    reasonable terms or at all;
    construction delays, delays in equipment deliveries and cost
    overruns;
    our ability to install and implement the TCS plants and closed
    loop systems for each of our polysilicon manufacturing factories;
    difficulties in recruiting and training of additional skilled
    employees, including technicians and managers at different
    levels;
    diversion of significant management attention and other
    resources; and
    delays or denials of required approvals, including environmental
    approvals, for our land acquisition and plant construction by
    relevant government authorities.    We may
    not be successful in producing polysilicon
    cost-effectively.
     13




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The
    manufacture of polysilicon presents operational difficulties and
    dangers which could materially adversely affect our business,
    operating results and financial condition.
    We may
    not be able to significantly increase our wafer production
    capacity or output in order to increase our sales and gain
    additional market share.
      
    the need to procure additional wafer production equipment at
    reasonable costs and on a timely basis;
    the need to procure sufficient supplies of polysilicon
    feedstock, consumables and other materials at reasonable costs
    and on a timely basis;
    the need to raise additional funds to finance our purchase of
    additional polysilicon feedstock and equipment and the
    construction of additional manufacturing facilities, which we
    may be unable to obtain on reasonable terms or at all;
    construction delays and cost overruns; 14




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
    difficulties in recruitment and training of additional skilled
    employees, including technicians and managers at different
    levels;
    diversion of significant management attention and other
    resources; and
    delays or denials of required approvals for our land acquisition
    and plant construction, including environmental approvals, by
    relevant government authorities.    Reduction
    or elimination of government subsidies and economic incentives
    for the solar power industry could cause demand for our products
    to decline, thus adversely affecting our business prospects and
    results of operations.
    We
    operate in a competitive market against players with greater
    resources and more advanced technologies and we may not be able
    to compete successfully.
  and/or and/or
 15




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We
    rely on a limited number of suppliers for our production
    equipment and consumables, and failure or delay by any of them
    in delivering equipment or consumables to us could adversely
    impact our production.
     16




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We may
    develop excess production capacity and, as a result, our
    profitability may be adversely affected.
    Global
    supply for photovoltaic products may exceed demand, which could
    cause our wafer prices to decline and adversely affect our
    margins.
    We
    depend on a limited number of customers for a significant
    portion of our net sales and changes in their purchase terms or
    patterns may cause significant fluctuations or declines in our
    revenues.
  Q-Cells. E-Ton,
 17




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
    reductions, delays or cancellations of purchase orders from one
    or more of our significant customers;
    loss of one or more of our significant customers and our failure
    to identify additional or replacement customers; and
    failure of any of our significant customers to make timely
    payments for our products.    If we
    are unable to fulfill our commitments to customers or customer
    orders on a timely basis, we may lose customers, our reputation
    may be damaged, and we may face penalties for breach of
    contracts.
    We
    require a significant amount of cash to fund our future capital
    expenditure requirements and working capital needs; if we cannot
    obtain additional sources of liquidity when we need it, our
    growth prospects and future profitability may be materially
    adversely affected.
   18




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
    our future financial condition, results of operations and cash
    flows;
    general market conditions for financing activities by companies
    in our industry; and
    economic, political and other conditions in China and elsewhere.    We
    have substantial existing indebtedness and may incur substantial
    indebtedness in the future, which could adversely affect our
    financial condition and our ability to generate sufficient cash
    to satisfy our outstanding and future debt
    obligations.
    
    increase our vulnerability to adverse general economic and
    industry conditions;
    require us to dedicate a substantial portion of our cash flow
    from operations to servicing and repaying indebtedness, thereby
    reducing the availability of cash flow to fund working capital,
    capital expenditures, dividend payments and other general
    corporate purposes;
    limit our flexibility in planning for or reacting to changes in
    the businesses and the industries in which we operate;
    place us at a competitive disadvantage compared to our
    competitors which have less debt;
    limit, along with the financial and other restrictive covenants
    of such indebtedness, our ability to borrow additional
    funds; and
    increase the cost of additional financing.      Our
    customers may not prepay for their orders.
   19




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We are
    subject to several securities class action lawsuits resulting
    from allegations of accounting problems made by our former
    financial controller and, we are unable to quantify their
    eventual impact, if any, on us. These lawsuits or any similar or
    other allegations, lawsuits or proceedings in the future could
    adversely affect our results of operations, financial condition
    and reputation and may cause loss of business.
  In re LDK Solar
    Sec. Litig., Case No. C
    07-05182
    WHA. Sean Coonerty v.
    Xiaofeng Peng, et al.
      Our
    business depends on the continued services of our executive
    officers and key personnel and our business may be severely
    disrupted if we lose their services.
   20




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Our
    principal shareholder, Mr. Xiaofeng Peng, has substantial
    control over our company and his interests may not be aligned
    with the interests of our shareholders.
    If
    solar power is not adopted for wide commercial application, our
    revenues may decline and we may be unable to sustain our
    profitability.
    
    cost-effectiveness, performance and reliability of solar power
    technology and products compared to conventional and other
    renewable energy sources and products;
    availability of government subsidies and economic incentives to
    support the development of the solar power industry;
    success of, or increased government support for, other
    alternative energy generation technologies, such as fuel cells,
    wind power, hydroelectric power and biomass energy;
    fluctuations in economic and market conditions that affect the
    viability of renewable energy sources, such as increases or
    decreases in the prices of oil and other fossil fuels;
    deregulation of the electric power industry and the broader
    energy industry; and
    levels of capital expenditures by end-users of solar energy
    products, which tend to decrease when economic growth slows.    Technological
    changes in the solar power industry could render our products
    uncompetitive or obsolete, which could reduce our market share
    and cause our net sales and profits to decline.
   21




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Unexpected
    equipment failures or accidents, including the release of
    hazardous materials, may lead to production curtailments or
    shutdowns, personal injuries or damage to
    properties.
    Our
    strategy includes possible alliances and acquisitions and our
    failure to successfully implement this strategy could have a
    material adverse effect on our business.
    Product
    defects could result in increased costs, damage to our
    reputation and loss of revenues and market share.
   22




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We
    will become subject to the management report and auditor
    attestation report requirements of Section 404 of the
    Sarbanes-Oxley Act as of the end of our fiscal year ending
    December 31, 2008; if we fail to maintain an effective
    system of internal control over financial reporting, we may be
    unable to accurately report our financial results or prevent
    fraud, and investor confidence and the market price of our ADSs
    may be adversely affected.
  Form 20-F
    If we
    are unable to attract, train and retain technicians and a
    skilled labor force, our business may be materially adversely
    affected.
    Fluctuations
    in exchange rates could adversely affect our
    business.
   23




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Compliance
    with environmental regulations is expensive, and noncompliance
    may result in adverse publicity and potentially significant
    monetary damages and fines or suspension of our business
    operations.
    We
    have limited insurance coverage and may incur losses resulting
    from product liability claims or business
    interruptions.
   24




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Increases
    in electricity costs or shortage or interruption of electricity
    supply may adversely affect our operations.
  kilowatt-hour. kilowatt-hour, kilowatt-hour
  kilowatt-hour kilowatt-hour, kilowatt-hour
  volt-amperes
  Failure
    to protect our intellectual property rights, know-how and
    technology may undermine our competitive position.
   25




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and/or
  We may
    be exposed to infringement, misappropriation or other claims by
    third parties and an adverse determination could result in us
    paying significant damages.
    We
    have granted, and may continue to grant, stock options under our
    stock incentive plan and our net income could be adversely
    impacted.
   26




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Most
    of our production, storage, administrative and research and
    development facilities are located in close proximity to one
    another in Xinyu city of Jiangxi province. Any damage or
    disruption at these facilities would have a material adverse
    effect on our business, financial condition and results of
    operations.
    Risks
    Relating to Business Operations in China
  Changes
    in PRC political and economic policies and conditions could
    adversely affect our business and prospects.
    Changes
    in foreign exchange and foreign investment regulations in China
    may affect our ability to invest in China and the ability of our
    PRC subsidiary to pay dividends and service debts in foreign
    currencies.
     27




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The
    uncertain legal environment in China could have a negative
    impact on our business and prospects and also limit the legal
    protections available to you.
    Expiration
    of, or changes to, current PRC tax incentives that our business
    enjoys could have a material adverse effect on our results of
    operations.
    
    a two-year exemption from the national enterprise income tax
    beginning with their first profitable year; and
    a 50% reduction of their applicable national enterprise income
    tax rate for the succeeding three years.    
    a five-year exemption from the 3% local enterprise income tax
    from their first profitable year; and
    a 50% reduction of their local enterprise income tax rate for
    the succeeding five years.   28




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We may
    be deemed a PRC resident enterprise under the new PRC Enterprise
    Income Tax Law and be subject to the PRC taxation on our
    worldwide income.
      Dividends
    payable by us to our foreign investors may become subject to
    withholding taxes under PRC tax laws.
    We
    rely principally on dividends paid by our subsidiaries to fund
    our cash and financing requirements, and any limitation on the
    ability of our PRC subsidiaries to pay dividends to us could
    have a material adverse effect on our ability to conduct our
    business.
   29




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Recent
    PRC regulations relating to the establishment of offshore
    special purpose companies by PRC residents may subject our PRC
    resident shareholders to personal liability and limit our
    ability to acquire PRC companies or to inject capital into our
    PRC subsidiary, limit our PRC subsidiarys ability to
    distribute profits to us, or otherwise materially adversely
    affect us.
    We
    face risks related to health epidemics and other outbreaks of
    contagious diseases, including avian influenza, or avian flu,
    and SARS.
   30




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Risks
    Relating to Our ADSs and Shares
  Future
    issuances of ordinary shares, ADSs or equity-linked  securities
    may dilute the ownership interest of our existing shareholders
    and depress the trading price of our ADSs.
    Holders
    of ADSs have fewer rights than shareholders and must act through
    the depositary to exercise those rights.
    You
    may be subject to limitations on transfers of your
    ADSs.
    The
    right of ADS holders to participate in any future rights
    offerings may be limited, which may cause dilution to their
    holdings and they may not receive cash dividends if it is
    impractical to make them available to such
    holders.
   31




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Our
    articles of association contain anti-takeover provisions that
    could have a material adverse effect on the rights of holders of
    our ordinary shares and ADSs.
    We are
    a Cayman Islands company and, because judicial precedent
    regarding the rights of shareholders is more limited under
    Cayman Islands law than that under U.S. law, ADS holders may
    have less protection for their shareholder rights than such
    holders would under U.S. law.
        
    to recognize or enforce against us judgments of courts of the
    United States based on certain civil liability provisions of
    U.S. securities laws; and 32




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##### Table of Contents




    to impose liabilities against us, in original actions brought in
    the Cayman Islands, based on certain civil liability provisions
    of U.S. securities laws that are penal in nature.      You
    may have difficulty enforcing judgments obtained against
    us.
    ITEM 4.
    INFORMATION
    ON THE COMPANY  A.
    History
    and Development      790) 686-0171. www.ldksolar.com.
   33




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##### Table of Contents



B.
    Business
    Overview  Overview
          1,000-metric-ton
     34




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##### Table of Contents



Competitive
    Strengths
    Leading
    solar wafer manufacturer
    Cost-effective
    production
    
    Efficient Production Process.  We have taken a
    series of cost reduction measures and developed processing
    technologies to reduce our production costs at each step of the
    production process, which include recycling more polysilicon,
    producing bigger ingots, increasing wafer size, reducing wafer
    thickness, recovering slurry and increasing production yield.
    China-based Manufacturing Facilities.  By
    manufacturing all of our products in China, we are able to
    benefit from low-cost labor, land, ancillary equipment and
    facilities, consumables and utilities. The low-cost labor in
    China allows us to utilize, in a cost-effective manner,
    recyclable polysilicon feedstock that requires intensive labor
    in its sorting, inspection and preparation. We have also made a
    33.5% investment in a local crucibles manufacturer, located in
    Xinyu city, the same city as our wafer manufacturing facilities.
    This investment enables us to secure a large portion of the
    crucibles we need for our anticipated wafer production in the
    upcoming years at a low cost. Crucibles are used to create
    ingots, and are currently one of the most expensive consumables
    used in the wafer manufacturing process.
    Research and Development.  Our research and
    development efforts are aimed at achieving both near-term
    production process efficiency improvements and long-term
    technological breakthroughs through our collaboration with
    leading universities and our internal resource. Our efforts have
    enabled us to diversify and optimize our polysilicon feedstock
    mix, to manufacture larger ingots and thinner and larger wafers.
    We have established dedicated laboratories in collaboration with
    Shanghai Jiaotong University and Nanchang University, two
    universities in China. Our cooperation with Shanghai Jiaotong
    University is aimed at enhancing the performance of consumables
    sourced in China such as crucibles, slurry and sawing wires as
    well as to develop innovative equipment and technologies to
    improve our manufacturing processes. Our cooperation with
    Nanchang University is focused on producing lower-cost
    consumables and reducing the cost of utilizing locally procured
    consumables in our manufacturing process. 35




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##### Table of Contents



Large-scale
    wafer manufacturer utilizing state-of-the-art
    equipment
    Strong
    relationships with customers and suppliers
  E-Ton,
  Experienced
    management team
    Our
    Strategies
    Expand
    our production capacity to meet customer demand and enhance
    economies of scale
  and/or
 36




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##### Table of Contents



Continue
    to improve our research and development to reduce manufacturing
    costs, improve production yield and pursue technological
    innovation
    
    maximize the utilization of polysilicon by making larger ingots
    and thinner wafers;
    improve technologies used in our polysilicon and slurry recovery
    program;
    improve production output by making thinner and larger wafers;
    reduce the costs associated with consumable items, such as
    sawing wires, crucibles and slurry; and
    utilize more low-cost raw materials by improving our processing
    technology.    Develop
    our in-house polysilicon manufacturing
    capabilities
  1,000-metric-ton
  Secure
    supplies of polysilicon feedstock from third-party
    vendors
    Broaden
    our geographic presence and strengthen our customer
    relationships
   37




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##### Table of Contents



Consider
    selective alliances and acquisitions
    Our
    Products
    
    we can use a wider range of polysilicon feedstock in the
    production of multicrystalline wafers; and
    multicrystalline wafer production process has a lower cost.      Wafer
    Production
    
    ingot production, and
    wafering.    Production
    of Polysilicon Ingot
   38




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Wafering
        
  Materials
    used in our wafer production
  Polysilicon Feedstock.
  Crucibles.
  Slurry and Wire.
  Wafer
    production facilities
      
    134 DSS furnaces used for ingot production;
    25 squarers used to cut ingots into blocks;
    96 wire saws used to slice blocks into wafers; and
    other supplemental or ancillary facilities.    Wafer
    production capacity expansion
     39




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##### Table of Contents



Wafering
    technologies
      Polysilicon
    Production
      Polysilicon
    production process
   40




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##### Table of Contents



Polysilicon
    production technologies
    Polysilicon
    production facilities
  Hi-Tech
  
    two Siemens technology-based reactors from Sunways AG, or
    Sunways; and
    other ancillary polysilicon production equipment.     41




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##### Table of Contents



Quality
    Control
        Customers,
    Sales and Marketing
  Chuan-Yi
    
    In March 2006, we entered into a five-year solar wafer
    supply agreement with Solland Solar, commencing on
    January 1, 2006 through December 31, 2010 and
    automatically renewable at one-year increments. Both parties
    have agreed to determine the wafer supply quantities and prices
    for 2007 and each subsequent year through negotiation.
    In August 2007, we entered into an three-year contract to supply
    multicrystalline solar wafers to Taiwan-based Chuan-Yi
    Investment Corporation, or
    Chuan-Yi.
    Under the terms of the contract, we will deliver 42




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##### Table of Contents




    In August 2007, we entered into a contract to supply
    multicrystalline solar wafers to Neo Solar. Under terms of the
    agreement, we will deliver approximately 237 MW of
    multicrystalline solar wafers to Neo Solar valued at
    approximately $495 million through the end of 2009.
    In September 2007, we entered into a wafer supply contract to
    supply multicrystalline solar wafers to Sunways. Under the terms
    of the contract, we will deliver approximately 1.0 gigawatt of
    multicrystalline solar wafers to Sunways at fixed prices over a
    ten-year period starting in 2008.
    In December 2007, we entered into a
    10-year
    contract to supply multicrystalline wafers to
    Q-Cells,
    pursuant to which we will deliver more than 6.0 gigawatts of
    multicrystalline solar wafers to
    Q-Cells over
    a ten-year period commencing in 2009 through 2018. We will use
    approximately one-third of the polysilicon produced by our
    15,000-metric-ton polysilicon production facility that is
    currently under construction to manufacture the wafers to be
    delivered under this contract.
    Q-Cells has
    agreed to make certain prepayments to assists us in financing
    the expansion required to supply these volumes. Additionally,
    Q-Cells has
    the option to purchase further silicon wafers if we expand
    polysilicon our production capacity.
    In January 2008, we entered into a ten-year contract to supply
    multicrystalline solar wafers to Neo Solar. Under the contract,
    we will receive a cash deposit from Neo Solar and the pricing
    will be fixed for the entire contract period. We will deliver
    approximately 509 MW of multicrystalline solar wafers to
    Neo Solar commencing in 2009.
    In February 2008, we entered into an eight-year contract to
    supply multicrystalline solar wafers to Hyundai based in the
    Republic of Korea. Under the terms of the agreement, we will
    deliver 450 MW of multicrystalline solar wafers to Hyundai
    over an eight-year period commencing in late 2008 through 2015.
    The pricing is fixed from 2008 through 2010 and the pricing for
    the remaining term of the contract will be subject to agreement.
    Hyundai will make an advanced payment representing a portion of
    the contract value to us.
    In March 2008, we entered into an agreement to supply
    multicrystalline solar waters to Petro International. Under the
    terms of the agreement, we will deliver approximately 120 MW of
    multicrystalline solar waters to Petro International over a
    three-year
    period commencing in March 2008 through March 2011.
    The pricing is fixed from 2008 through 2009 and the pricing for
    the remaining term of the agreement will be subject to
    negotiations.
    In April 2008, we entered into a ten-year contract to supply
    multicrystalline solar wafers to MBPV. Under the terms of the
    contract, we will deliver approximately 640 MW of
    multicrystalline solar wafers to MBPV over a period commencing
    in the second half of 2008 through the end of 2017. The pricing
    is fixed from 2008 through 2010 and the pricing for the
    remaining term of the contract will be subject to negotiations.
    MBPV will make an advance payment representing a portion of the
    contract value to us.   43




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Suppliers
  Raw
    materials and consumables
      
    semiconductor materials trading companies, such as Komex, Petro
    International, Sunbridge and Targray;
    solar cell and module makers, such as BP Solar, CSI, GE Energy
    and Q-Cells; and
    solar-grade virgin polysilicon manufacturers, such as Wacker.          
    Our framework silicon purchase contract with Komex entered into
    in December 2006 has a term of eight years from January 2007 to
    January 2015. Pursuant to the contract, Komex is required to
    supply at least 35 tons of solar-grade polysilicon
    feedstock to us at market prices for each month during the term
    of the contract. The Komex contract provides for a monthly
    delivery schedule and we are required to pay 100% of the
    purchase price in advance for each shipment.
    Our cooperation agreement with Kunical entered into in December
    2006 has a term of four years from 2007 to 2010. Pursuant to
    this contract, Kunical is required to use its best efforts to
    supply to us 200 tons of polysilicon feedstock each year during
    the term of the contract for a total price of $96 million.
    Kunical is required to deliver polysilicon feedstock within
    seven business days upon receipt of our purchase order and we
    are required to pay 100% of the purchase price for each shipment
    five days after receipt of its invoice.
    Our agreement with Luoyang Zhonggui High-Tech Co., Ltd, or
    Luoyang Zhonggui, entered into in April 2007 has a term of five
    years. Pursuant to this agreement, Luoyang Zhonggui will supply
    200 tons of polysilicon feedstock in 2008, 400 tons in 2009, 800
    tons in 2010, 1,000 tons in 2011 and 1,500 tons in 2012. The
    purchase price will be based on prevailing PRC domestic market
    prices. We are required, however, to make prepayments to Luoyang
    Zhonggui in the aggregate of Rmb 400.0 million, payable as
    follows: Rmb 50.0 million by October 30, 2007, Rmb
    150.0 million by November 30, 2007, Rmb
    180.0 million by April 30, 2008 and Rmb
    20.0 million by December 31, 2008. As a result of the
    delay in delivery progress, as of the date of this report, we
    have made an aggregate of Rmb 77 million in
    prepayments.
    In March 2008, we entered into a polysilicon feedstock supply
    agreement with Petro International. Pursuant to this agreement,
    Petro International will provide us with an aggregate of
    1,449 metric tons of polysilicon 44




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##### Table of Contents



feedstock, to be delivered from March 2008 through February
    2011. We have agreed to pay a deposit of 2% of the aggregate
    contract price. Delivery of the feedstock will be on a monthly
    basis and we are required to pay 100% of the purchase price in
    advance of each shipment.        Equipment
      
    242 additional DSS furnaces from GT Solar;
    99 additional wafering wire saws from HCT Shaping;
    38 additional squarers from HCT Shaping;
    50 additional polysilicon reactors and 24 converters from
    GT Solar; and
    other ancillary equipment.       45




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Research
    and Development
    
    optimizing our solidification process to achieve the highest
    conversion efficiency;
    improving our solidification purification process to allow us to
    use low-cost polysilicon materials without losing wafer
    efficiency and quality;
    reducing polysilicon kerf losses and improving polysilicon
    recoveries;
    improving our crucible and coating technology to achieve
    re-usability of our crucibles;
    optimizing our ingot and wafer sizes, including making larger
    ingots and larger and thinner wafers;
    localizing the production of additional consumables in
    China; and
    localizing the production of some of our auxiliary equipment in
    China.   46




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##### Table of Contents



Competition
  and/or and/or
    
    cost competitiveness and price;
    continuous access to polysilicon feedstock;
    product quality;
    economies of scale;
    advanced technology and manufacturing processes; and
    strong global distribution channels.    Property
   47




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Owned
    property
  Hi-Tech
  Leased
    property
      Intellectual
    Property Rights
      Insurance
    Production
    Safety and Environment
    Safety
   48




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Environment
  on-site
    Legal and
    Administrative Proceedings
  In re LDK Solar
    Sec. Litig., Case No. C
    07-05182
    WHA.
  Sean
    Coonerty v. Xiaofeng Peng, et al.
   49




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Regulatory
    Framework
    Renewable
    Energy Law and Government Directives
          Environmental
    Regulations
   50




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##### Table of Contents



Restriction
    on Foreign Investments
    Tax
           51




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##### Table of Contents



Foreign
    Currency Exchange
    
    Foreign Currency Administration Rules of 1996, as
    amended; and
    Administrative Rules of the Settlement, Sale and Payment of
    Foreign Exchange of 1996.    and/or
  Dividend
    Distribution
    
    Corporation Law of 1993, as amended;
    Wholly Foreign-Owned Enterprise Law of 1986, as amended; and
    Wholly Foreign-Owned Enterprise Law Implementation Rules of
    1990, as amended.   52




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Regulation
    of Overseas Investments and Listings
              
    CSRC currently has not issued any definitive rule or
    interpretation requiring offerings like our IPO to be subject to
    its new procedure; and
    In spite of the above, because we completed our restructuring
    and established an overseas holding structure before
    September 8, 2006, the effective date of the new M&A
    rule, neither the new M&A rule nor the CSRC procedures
    require an application to be submitted to the CSRC for the
    approval of the listing and trading of our ADSs on the New York
    Stock Exchange unless we are clearly required to do so by
    possible later rules of CSRC.  C.
    Organization
    Structure   53




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##### Table of Contents



D.
    Property,
    Plants and Equipment    ITEM 4A
    UNRESOLVED
    STAFF COMMENTS    ITEM 5.
    OPERATING
    AND FINANCIAL REVIEW AND PROSPECTS  A.
    Operating
    Results  You should read the following discussion and analysis of our
    financial condition and results of operations in conjunction
    with the section entitled Item 3  Selected
    Financial and Operating Data and our audited consolidated
    financial statements included elsewhere in this report. The
    following discussion and analysis contain forward-looking
    statements that involve risks and uncertainties. Our actual
    results and the timing of selected events could differ
    materially from those anticipated in these forward-looking
    statements as a result of various factors, including those set
    forth under Item 3  Risk Factors and
    elsewhere in this report.
  Overview
     54




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Key
    Factors Affecting Our Results of Operations
    
    demand for our solar power products, including government
    incentives to promote the usage of solar energy;
    our production capacity and its utilization;
    the availability, cost, quality and mix of our polysilicon
    feedstock;
    our ability to produce polysilicon feedstock at our polysilicon
    manufacturing plant in sufficient quantities cost-efficiently;
    our manufacturing costs; and
    the pricing of our products.  Demand
    for our solar products
     55




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Our
    production capacity and its utilization
    Availability,
    cost, quality and mix of our polysilicon feedstock
      Our
    ability to produce polysilicon feedstock at our polysilicon
    manufacturing plant
   56




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Our
    manufacturing costs
    Pricing
    of our wafer products
    Net
    Sales
  and/or
  Q-Cells. E-Ton, Q-Cells
 57




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
    China;
    Asia Pacific ex-China;
    Europe; and
    North America.    Year Ended December 31,2006


2007Geographic Regions

Net Sales


% of Total


Net Sales


% of Total(in thousands)





(in thousands)China

$
79,647



75.5
%

$
154,224



29.4
%Asia Pacific ex-China


17,116



16.3



216,295



41.3Europe


3,386



3.2



105,499



20.1North America


5,305



5.0



47,928



9.2Net sales

$
105,454



100.0
%

$
523,946



100.0
%     Cost of
    Goods Sold
    
    polysilicon feedstock, including solar-grade virgin polysilicon,
    polysilicon ingots, polysilicon powder, scraps and recyclable
    polysilicon (the costs are determined using the weighted average
    method);
    consumables, including slurry, crucibles, sawing wires and
    packaging materials;
    depreciation and amortization of property, plant, equipment and
    technical know-how;
    factory overhead, including utilities, net of government
    subsidies, maintenance of production equipment and other support
    expenses associated with the manufacturing of our solar wafers
    and ingots;
    direct labor, including salaries and benefits of personnel
    directly involved in manufacturing activities;
    stock-based compensation attributable to our manufacturing
    personnel; and
    provision for finished products with defects.    Operating
    Expenses
    Selling
    expenses
   58




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General
    and administrative expenses
    Research
    and development expenses
      Share-based
    Compensation Expenses
    
    approximately $174,000 to our cost of goods sold;
    approximately $1,697,000 to our general and administrative
    expenses; and
    approximately $157,000 to our research and development expenses.    
    approximately $1,772,000 to our cost of goods sold;
    approximately $19,000 to our selling expenses;
    approximately $5,828,000 to our general and administrative
    expenses;
    approximately $1,771,000 to our research and development
    expenses; and
    approximately $159,000 was capitalized in property, plant and
    equipment.   59




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##### Table of Contents



Other
    Income and Expenses
    Interest
    income or expense
      Foreign
    currency exchange loss, net
    Government
    subsidy
      Taxation
    and Incentives
      
    a two-year exemption from the national enterprise income tax
    from their first profitable year; and
    a 50% reduction of their applicable national enterprise income
    tax rate for the succeeding three years.   60




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
    a five-year exemption from the 3% local enterprise income tax
    from their first profitable year; and
    a 50% reduction of their local enterprise income tax rate for
    the succeeding five years.          Subsequent
    Events
   61




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Critical
    Accounting Policies
    
    the reported amounts of our assets and liabilities;
    the disclosure of our contingent assets and liabilities at the
    end of each reporting period; and
    the reported amounts of revenues and expenses during each
    reporting period.    
    our selection of critical accounting policies;
    the judgment and other uncertainties affecting the application
    of such policies; and
    the sensitivity of reported results to changes in conditions and
    assumptions.    Depreciation
    and amortization
    Impairment
    of long-lived assets
   62




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Balance
    sheet classification for inventory
    Realization
    for inventory
    Share-based
    compensation
     63




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##### Table of Contents




    no material changes in the existing political, legal, fiscal and
    economic conditions in China;
    no major changes in the tax rates applicable to our subsidiary
    in China;
    our ability to retain competent management, key personnel and
    technical staff to support our ongoing operations; and
    no material deviation in industry trends and market conditions
    from economic forecasts.    U.S.-listed
      Fair Value ofOrdinary SharesGrant Date

Number of Options

Exercise Price

at Grant DateAugust 1, 2006


5,893,900


$
4.45


$
4.37February 6, 2007


2,065,900



9.00



7.98April 17,
    2007(1)


100,000



9.00



25.00May 14,
    2007(2)


350,900



25.00



25.00May 31,
    2007(3)


100,000



9.00



27.00July 6,
    2007(4)


633,400



33.96



33.53October 17,
    2007(4)


200,000



9.00



44.75December 3,
    2007(4)


734,500


$
29.55


$
32.30     (1)
    
    Represents the 100,000 options
    granted on April 17, 2007 to Gang Wang, one of our
    directors. We estimated the fair value of our ordinary shares as
    of the grant date to be $25.00 per share, based on our
    preliminary discussions with the underwriters for our IPO
    regarding its possible price range.(2)
    
    Represents the 350,900 options
    authorized on April 17, 2007 granted to our employees. The
    exercise price for such options was $25.00, the low end of the
    price range as shown on the cover page of our preliminary IPO
    prospectus. The grant date of such options was May 14,
    2007, the date such exercise price was determined. We estimated
    the fair value of the ordinary shares on the grant date of such
    options to be $25.00 per share, the low end of the price range
    set forth on the cover page of the preliminary IPO prospectus.(3)
    
    Represents the 100,000 options
    authorized on April 17, 2007 granted to Mr. Louis T.
    Hsieh, who became our director on the date of our IPO. The
    exercise price for such options was $9.00 per share and the
    grant date of such options was the date of our IPO prospectus.
    We determined the fair value of our ordinary shares on such
    grant date to be the IPO price per share, which was $27.00.(4)
    
    Represents options granted to our
    directors and employees. The fair value of our ordinary shares
    on such grant date was based on the closing price of our ADSs
    listed on the New York Stock Exchange for the trading day prior
    to the grant date. 64




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August 1,
    2006 Grant
      price-to-earnings
    December 19,
    2006 Valuation
    February 6,
    2007 Grant
   65




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##### Table of Contents




    We were able to secure more polysilicon feedstock. Given the
    constraints in polysilicon supply in the market, we focused our
    efforts on securing more polysilicon during the period between
    December 19, 2006 and February 6, 2007. During this
    period, we were able to secure commitments for an additional 256
    tons of polysilicon for our wafer production in 2007.
    We were able to secure more firm commitment contracts from our
    customers. During this period, we were able to obtain sales
    contracts for over 350 MW of wafer sales, of which
    approximately 50 MW were for 2007. We also entered into
    sales contracts with two of the market leaders in photovoltaic
    cells, Motech and
    E-Ton. We
    signed a three-year agreement with Motech for approximately
    100 MW and a four-year agreement with
    E-Ton for
    approximately 200 MW.
    We were able to secure additional wire saws to increase our
    annual production capacity. To produce wafers, we are dependent
    on our wire saws to slice bricks into wafers. On January 4,
    2007, we entered into a master purchase agreement with HCT
    Shaping to acquire 170 wire saws in total, including 17 wire
    saws that had been previously delivered. We believe this
    agreement will provide sufficient wire saw capacity for us to
    reach our planned annual capacity of approximately 800 MW
    by the end of 2008.
    We further strengthened our management team. We hired our
    president and chief operating officer, Xingxue Tong, who has
    over 10 years experience in managing operations of
    companies in the solar industry. Mr. Tong also serves as a
    director on our board. In early February, we hired Yuepeng Wan
    as our chief technology officer to lead our research and
    development efforts. We also hired additional middle management
    personnel.  Option
    Grants on April 17, May 14 and May 31,
    2007
      
    We were able to expand our capacity significantly. At the end of
    January 2007, we had an annual production capacity of
    approximately 175 MW. Our annual production capacity
    increased by 40 MW to approximately 215 MW at the end
    of March 2007. During this period, we also ordered and paid
    deposits for equipment to support approximately an additional
    95 MW of annual production capacity.
    We believed that our future growth would be more assured
    following our IPO. We believed that after the completion of our
    IPO, we will be able to use the proceeds from the offering for
    further our capacity 66




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##### Table of Contents



expansion, achieve higher growth and secure more polysilicon
    feedstock. With the proceeds from our IPO, we would be able to
    purchase the equipment necessary to achieve our planned capacity
    expansion to approximately 800 MW by the end of 2008 and
    secure more polysilicon feedstock necessary for our future
    production.  
    We were able to secure more polysilicon. During this period, we
    were able to secure contracts for over 3,000 tons of polysilicon
    for the next few years. Of this amount, approximately 160 tons
    will be delivered in 2007 and 300 tons in 2008.
    We were able to secure more firm commitment contracts from our
    customers. During this period, we entered into sales contracts
    with our customers for over 270 MW of wafer sales, of which
    approximately 45 MW were for 2007 and approximately
    110 MW were for 2008. We also entered into a contract with
    Q-Cells, the second largest photovoltaic cell manufacturer
    according to Solarbuzz. This long term contract was for three
    years, during which Q-Cells would supply silicon feedstock to us
    and purchase wafers from us. Under this contract, we would sell
    approximately 180 MW of wafers to Q-Cells between 2007 and
    2009.
    We believed that our business prospects improved as well because
    of a substantial increase in our net revenues for the three
    months ended March 31, 2007 as compared with the three
    months ended December 31, 2006. We achieved revenues of
    $73.4 million for the three months ended March 31,
    2007, representing an increase of approximately 19% from our
    revenues for the three months ended December 31, 2006.
    When the valuation was conducted in February 2007, we were still
    in the early stage of the offering process and there were
    significant uncertainties regarding the success of our IPO. In
    April 2007, we were much further along in the offering process
    and the probability of a successful offering increased
    significantly.  Option
    Grants after July 1, 2007
    Embedded
    beneficial conversion feature of the convertible
    instruments
     67




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
    WACC: WACC of 17% was applied. This was the combined result of
    the risk-free rate, market return rate, industry average beta,
    and our company-specific risk premium that reflects the risks
    associated with achieving the projections at various stages of
    development.
    Lack of Marketability Discount, or LOMD: Sallmanns considered
    both the option method and the quantitative marketability
    discount model to quantify the LOMD. Both methods provided
    similar results on LOMD, which decreased from 35% as at
    June 28, 2006, which was the commitment date of the
    issuance of our exchangeable notes, to 20% as at
    September 15, 2006, which was the commitment date of the
    issuance of our Series B preferred shares, and to 10% as at
    December 15, 2006, which was the commitment date of the
    issuance of our Series C preferred shares. The decrease in
    LOMD was primarily attributable to our achievements in company
    restructuring and fund raising, which increased our resources to
    carry through our IPO.      Internal
    Control Over Financial Reporting
  Form 20-F
     68




---



##### Table of Contents



Individual
    Income Tax Withholding Obligation
    Results
    of Operations
    Period
    from July 5, 2005 to December 31, 2005
   69




---



##### Table of Contents



start-up
  Year
    ended December 31, 2007 compared with year ended
    December 31, 2006
    Year Ended December 31,2006


2007(in thousands)


(% of Net Sales)


(in thousands)


(% of Net Sales)Net sales

$
105,454



100.0
%

$
523,946



100.0
%Cost of goods sold


(63,962
)


(60.7
)


(353,709
)


(67.5
)Gross profit


41,492



39.3



170,237



32.5Selling expenses


(286
)


(0.3
)


(873
)


(0.2
)General and administrative expenses


(3,771
)


(3.5
)


(19,360
)


(3.7
)Research and development expenses


(290
)


(0.3
)


(3,202
)


(0.6
)Total operating expenses


(4,347
)


(4.1
)


(23,435
)


4.5Income from operations


37,145



35.2



146,802



28.0Other income/(expenses):Interest income


105



0.1



4,109



0.8Interest expense and amortization of discount on exchangeable
    notes


(7,133
)


(6.7
)


(9,419
)


(1.8
)Decrease in fair value of warrants


9



0.0



2



0.0Foreign currency exchange loss, net


(1,325
)


(1.3
)


(1,654
)


(0.3
)Government subsidy


1,268



1.2



3,461



0.7Earnings before income tax benefit


30,069



28.5



143,301



27.4Income tax benefit


113



0.1



758



0.1Net income


30,182



28.6



144,059



27.5Accretion of Series A preferred shares to redemption value


(814
)


(0.8
)


(860
)


(0.2
)Accretion of Series B preferred shares to redemption value


(1,799
)


(1.7
)


(2,726
)


(0.5
)Accretion of Series C preferred shares to redemption value


(116
)


(0.1
)


(1,351
)


(0.2
)Deemed dividend to Series A preferred shareholders


(1,568
)


(1.5
)


Net income available to ordinary shareholders

$
25,885



24.5
%

$
139,122



26.6
%   Net sales.
 70




---



##### Table of Contents



Year Ended December 31,2006


2007Product

Net Sales


% of Total


Net Sales


% of Total(in millions)





(in millions)156 x 156 mm wafers

$
36.3



34.4
%

$
408.1



77.9
%125 x 125 mm wafers


66.2



62.8



92.3



17.6150 x 150 mm wafers










1.3



0.2Processing of wafers for others


0.5



0.4



18.7



3.6Silicon materials


2.5



2.4



3.5



0.7Net sales

$
105.5



100.0
%

$
523.9



100.0
%     Cost of goods sold.
  Year Ended December 31,2006


2007Product

Cost of Goods Sold


% of Total


Cost of Goods Sold


% of Total(in millions)





(in millions)156 x 156 mm wafers

$
21.4



33.4
%

$
268.3



75.9
%125 x 125 mm wafers


40.3



62.9



68.5



19.4150 x 150 mm wafers










1.1



0.3Processing of wafers for others


0.3



0.5



13.1



3.7Silicon materials


2.0



3.2



2.7



0.7Cost of goods sold

$
64.0



100.0
%

$
353.7



100.0
%   Gross profit.
 71




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##### Table of Contents



Operating expenses.
  Interest income and expense.
  Foreign currency exchange loss, net.
  Government subsidy.
  Net income.
  Accretion of Series A, Series B, Series C
    preferred shares to redemption values.
 72




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##### Table of Contents



Deemed dividend to Series A preferred
    shareholders.
  Net income available to ordinary
    shareholders.
  Earnings per ordinary share.
 73




---



##### Table of Contents



Quarterly
    financial data
    Three Months


Three Months


Three Months


Three Months


Three Months


Three Months


Three MonthsEnded


Ended


Ended


Ended


Ended


Ended


EndedJune 30,


September 30,


December 31,


March 31,


June 30,


September 30,


December 31,2006


2006


2006


2007


2007


2007


2007(in thousands, except per share and per ADS data)Net sales

$
12,144


$
31,450


$
61,860


$
73,400


$
99,053


$
158,724


$
192,769Cost of goods sold


(9,588
)


(19,069
)


(35,305
)


(45,020
)


(64,153
)


(109,807
)


(134,729
)Gross profit


2,556



12,381



26,555



28,380



34,900



48,917



58,040Selling expenses


(85
)


(117
)


(84
)


(183
)


(132
)


(348
)


(210
)General and administrative expenses


(345
)


(1,633
)


(1,664
)


(1,819
)


(3,579
)


(4,459
)


(9,503
)Research and development expenses


(15
)


(76
)


(199
)


(261
)


(367
)


(921
)


(1,653
)Total operating expenses


(445
)


(1,826
)


(1,947
)


(2,263
)


(4,078
)


(5,728
)


(11,366
)Income from operations


2,111



10,555



24,608



26,117



30,822



43,189



46,674Other income/(expenses):Interest income


22



26



26



25



271



1,846



1,967Interest expense and amortization of discount on exchangeable
    notes


(837
)


(4,961
)


(995
)


(1,529
)


(2,180
)


(2,650
)


(3,060
)Decrease in fair value of warrants






9











2







Foreign currency exchange loss, net


(36
)


(667
)


(566
)


(516
)


(576
)


(2,041
)


1,479Government subsidy










1,268



437



406



662



1,956Earnings before income tax benefit


1,260



4,962



24,341



24,534



28,745



41,006



49,016Income tax benefit


57







2











599



159Net income

$
1,317


$
4,962


$
24,343


$
24,534


$
28,745


$
41,605


$
49,175    B. Liquidity
    and Capital Resources  Prepayments
    to Suppliers
     74




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##### Table of Contents



Cash
    flow and working capital
      Period from July 5 toDecember 31,


Year Ended December 31,2005


2006


2007(in thousands)Net cash provided by (used in) operating activities

$
2,511


$
(57,067
)

$
(80,663
)Net cash used in investing activities


(20,940
)


(79,564
)


(328,623
)Net cash provided by financing activities


28,077



154,891



462,324Effect of exchange rate changes


39



2,280



205Net increase in cash and cash equivalents


9,687



20,540



53,243Cash and cash equivalents at the beginning of period






9,687



30,227Cash and cash equivalents at the end of period

$
9,687


$
30,227


$
83,470   Operating
    activities
        Investing
    activities
     75




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##### Table of Contents



Hi-Tech
  Financing
    activities
    Series A-2,
          
    In March 2006, we borrowed $10.2 million from China
    Construction Bank of which half of the principal amount is
    repayable in March 2008 and the other half is repayable in March
    2009. This facility carries variable interest with reference to
    the prevailing base lending rate pronounced by Peoples
    Bank of China. The effective interest rate of this facility of
    was 7.2% as of December 31, 2007. Interest is payable
    semi-annually. This facility is secured by our plant and
    machinery and guaranteed by a company controlled by our chairman
    and chief executive officer, Mr. Xiaofeng Peng.
    In December 2006, we borrowed $25 million from China
    Development Bank, which is repayable in 5 equal annual
    installments of $5.0 million from 2007 through 2011. This
    facility carries variable interest with reference to the
    prevailing six-month US Libor rate. The effective interest rate
    of this facility was 6.9% as of December 31, 2007. Interest
    is payable monthly. This facility is secured by our plant and
    machinery and land 76




---



##### Table of Contents



use rights and is guaranteed by our chairman and chief executive
    officer, Mr. Xiaofeng Peng and Ms. Zhou Shan.  
    In February 2007, we borrowed $8.8 million from Bank of
    China, which is payable in two equal annual installments of
    $4.4 million in 2008 and 2009. This facility carries
    variable interest with interest rate with reference to the
    prevailing two-year US$ loan rate pronounced by Bank of China.
    The effective interest rate of the facility was 8.7% as of
    December 31, 2007. Interest is payable quarterly. This
    facility is secured by certain of our raw materials and is
    guaranteed by our chairman and chief executive officers,
    Mr. Xiaofeng Peng, and companies controlled by
    Mr. Xiaofeng Peng.  Capital
    expenditures
        Restricted
    Net Assets
    Recent
    Accounting Pronouncements
   77




---



##### Table of Contents



C.
    Research
    and Development, Patents and Licenses, etc.    D.
    Trend
    Information    Global
    Annual Crystalline Silicon-Based Solar Cell/Module
    Production
  
  Source
 78




---



##### Table of Contents



Key
    growth drivers
    Rising Prices of Conventional Energy
    Sources.
  Government Incentives for Renewable Energy
    Sources.
  Tightening of Environmental Regulations.
  Increasing Cost Competitiveness of Solar
    Energy.
  Challenges
    facing the solar power industry
    Possible Reduction or Elimination of Government Subsidies and
    Incentives.
  Need to Improve Cost Competitiveness Against Other Energy
    Sources.
  Supply Constraint of Polysilicon.
  Need to Broaden Awareness and Acceptance of Solar Power
    Usage.
 79




---



##### Table of Contents



Photovoltaic
    products manufacturing value chain
    
    crystalline wafer-based production technology, and
    thin-film production technology.            
  Polysilicon
    industry
       80




---



##### Table of Contents



Solar
    wafer industry
              E.
    Off-balance
    Sheet Arrangements   81




---



##### Table of Contents



F.
    Tabular
    Disclosure of Contractual Obligations    Payment Due byTotal


Year-End 2008


Year-End 2009


Year-End 2010


After 2010(in thousands)Long-term debt obligations (including interest payments)

$
29,071


$
1,832


$
16,260


$
5,662


$
5,317Short-term debt obligations (including interest payments)


274,030



274,030











Non-cancelable purchase obligations  raw materials


170,721



43,320



46,600



40,601



40,200 equipment


566,495



486,461



80,034







Total

$
1,040,317


$
805,643


$
142,894


$
46,263


$
45,517        82




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##### Table of Contents



ITEM 6.
    DIRECTORS,
    SENIOR MANAGEMENT AND EMPLOYEES  A.
    Directors
    and Senior Management    Directors and Executive Officers

Age


PositionXiaofeng Peng


32


Chairman and Chief Executive OfficerXingxue Tong


43


Director, President and Chief Operating OfficerLiangbao Zhu


41


Director and Senior Vice PresidentYonggang Shao


43


Director and Senior Vice PresidentGang Wang


39


Non-executive DirectorLouis T. Hsieh


43


Independent DirectorBing Xiang


45


Independent DirectorJunwu Liang


74


Independent DirectorJack Lai


54


Executive Vice President, Chief Financial Officer and SecretaryNicola Sarno


55


Senior Vice President of ManufacturingYuepeng Wan


42


Chief Technology OfficerRongqiang Cui


66


Head of Shanghai Jiaotong University LDK LaboratoryPietro Rossettog


57


Chief Wafer EngineerQiqiang Yao


35


Vice President of Finance   Directors
  Xiaofeng Peng
  Xingxue Tong
  Liangbao Zhu
  Yonggang Shao
 83




---



##### Table of Contents



Gang Wang
  Louis T. Hsieh
  Bing Xiang
  Dr. Junwu Liang
  Executive
    Officers
  Jack Lai
 84




---



##### Table of Contents



Nicola Sarno
  Yuepeng Wan
  Rongqiang Cui
  Pietro Rossetto
  Qiqiang Yao
  B.
    Compensation
    of Directors and Officers  Compensation
    of Directors and Executive Officers
     85




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##### Table of Contents



Indemnification
      Employment
    Agreements
    C.
    Board
    Practice    
    the audit committee,
    the compensation committee, and
    the corporate governance and nominating committee.     86




---



##### Table of Contents



Audit
    committee
    
    selecting the independent auditors and pre-approving all
    auditing and non-auditing services permitted to be performed by
    the independent auditors;
    reviewing and approving all proposed related-party transactions;
    discussing the annual audited financial statements and interim
    financial statements with management and the independent
    auditors;
    annually reviewing and reassessing the adequacy of our audit
    committee charter;
    meeting separately and periodically with management and the
    independent auditors;
    such other matters that are specifically delegated to our audit
    committee by our board of directors from time to time; and
    reporting regularly to the full board of directors.  Compensation
    committee
    
    reviewing and determining the compensation package for our
    senior executives;
    reviewing and making recommendations to the board with respect
    to the compensation of our directors;
    reviewing and approving officer and director indemnification and
    insurance matters;
    reviewing periodically and approving any long-term incentive
    compensation or equity plans, programs or similar arrangements,
    annual bonuses, employee pension and welfare benefit
    plans; and
    reporting regularly to the full board of directors. 87




---



##### Table of Contents



Corporate
    governance and nominating committee
    
    identifying and recommending to the board nominees for election
    or re-election to the board;
    appointment to fill any vacancy;
    reviewing annually with the board the current composition of the
    board in light of the characteristics of independence, age,
    skills, experience and availability of service to us;
    identifying and recommending to the board the directors to serve
    as members of the boards committees;
    advising the board periodically with respect to significant
    developments in the law and practice of corporate governance as
    well as our compliance with applicable laws and regulations, and
    making recommendations to the board on all matters of corporate
    governance and on any corrective action to be taken;
    monitoring compliance with our code of business conduct and
    ethics, including reviewing the adequacy and effectiveness of
    our procedures to ensure proper compliance; and
    reporting regularly to the full board of directors.  Duties of
    Directors
    D.
    Employees   88




---



##### Table of Contents



Number of

Percentage ofEmployees

TotalManufacturing


5,238



83.8
%Quality control


343



5.5Research, development and engineering


94



1.5Administration


377



6.0Production planning


128



2.1Finance


40



0.6Procurement


33



0.5Total


6,253



100.0
%           E.
    Share
    Ownership  2006
    Stock Incentive Plan
    
    motivate the eligible participants to optimize their performance
    efficiency for the benefit of our company;
    attract and retain the best available personnel in our industry
    through additional incentive to our employees and
    directors; and
    attract and otherwise maintain our on-going business
    relationship with consultants and business entities whose
    contributions are or will be beneficial to our long-term growth.  Eligible
    participants
    
    any full-time or part-time employees, executives or officers of
    our company or any of our subsidiaries;
    any directors, including non-executive directors and independent
    non-executive directors, of our company or any of our
    subsidiaries;
    any advisers, consultants and agents to us or any of our
    subsidiaries; and 89




---



##### Table of Contents




    such other persons who, in the sole opinion of our board of
    directors, will contribute or have contributed to our
    development and operations.  Maximum
    number of shares
    Price
    of shares
    Performance
    criteria
   90




---



##### Table of Contents



Outstanding
    options granted under our 2006 stock incentive
    plan
    Ordinary SharesUnderlyingOutstanding

Exercise PriceName

Options

($/Share)

Date of Grant

Date of ExpirationXiaofeng
    Peng(1)


1,000,000


$
4.45



August 1, 2006



July 31, 2011Xingxue
    Tong(2)


866,667



9.00



February 6, 2007



February 5, 2012Liangbao
    Zhu(3)


670,000



4.45



August 1, 2006



July 31, 2011Yonggang
    Shao(4)


670,000



4.45



August 1, 2006



July 31, 2011Gang
    Wang(5)


100,000



9.00



April 17, 2007



April 16, 2012Louis T. Hsieh


100,000



9.00



May 31, 2007



May 30, 2012Louis T. Hsieh


*



9.00



October 17, 2007



October 17, 2012Jack
    Lai(6)


*



4.45



August 1, 2006



July 31, 2011Nicola Sarno


*



4.45



August 1, 2006



July 31, 2011Nicola Sarno


*



33.96



July 6, 2007



July 5, 2012Yuepeng Wan


*



9.00



February 6, 2007



February 5, 2012Rongqiang Cui


*



4.45



August 1, 2006



July 31, 2011Pietro Rossetto


*



4.45



August 1, 2006



July 31, 2011Qiqiang
    Yao(7)


*



4.45



August 1, 2006



July 31, 2011Bing Xiang


*



33.96



July 6, 2007



July 5, 2012Junwu Liang


*



31.05



February 25, 2008



February 24, 2013Boundless Future Investment
    Limited(8)


100,000



4.45



August 1, 2006



July 31, 2011Brilliant Ever Investments
    Limited(8)


100,000



4.45



August 1, 2006



July 31, 2011Other employees as a
    group(9)


981,300



4.45



August 1, 2006



July 31, 2011Other employees as a
    group(9)


592,000



9.00



February 6, 2007



February 5, 2012Other employees as a
    group(9)


253,200



25.00



May 14, 2007



May 13, 2012Other employees as a
    group(9)


445,300



33.96



July 6, 2007



July 5, 2012Other employees as a
    group(9)


734,550



29.55



December 3, 2007



December 2, 2012Other employees as a
    group(9)


60,000


$
43.81



January 9, 2008



January 8, 2013Total


8,147,017     (1)
    
    Mr. Peng holds his stock
    options through his wholly owned British Virgin Islands company,
    LDK New Energy.(2)
    
    Mr. Tong holds his stock
    options through his wholly owned British Virgin Islands company,
    Superb Bright Limited.(3)
    
    Mr. Zhu holds his stock
    options through his wholly owned British Virgin Islands company,
    Feliz International Inc.(4)
    
    Mr. Shao holds his stock
    options through his wholly owned British Virgin Islands company,
    SM Future Investment Inc.(5)
    
    Mr. Wang holds his stock
    options through his wholly owned British Virgin Islands company,
    Sun Forever Limited.(6)
    
    Relates to options granted to
    Mr. Lai in his capacity as consultant prior to his
    employment at our company and in anticipation of his employment
    at our company.(7)
    
    Mr. Yao holds his stock
    options through his wholly owned British Virgin Islands company,
    Qiqiang Investment Consulting Inc.(8)
    
    Vests on July 31, 2007.
    Brilliant Ever Investments Limited and Boundless Future
    Investment Limited are each a company organized and existing
    under the laws of the British Virgin Islands and wholly owned by
    Mr. Chen Lu. Brilliant Ever Investments Limited and
    Boundless Future Investment Limited were each an investor in our
    Series A preferred shares.(9)
    
    Each employee holds less than 1% of
    our total outstanding voting securities.*
    
    These directors and executive
    officers as a group, each beneficially owning less than 1% of
    our outstanding ordinary shares, together hold stock options
    exercisable for 1,474,000 ordinary shares. 91




---



##### Table of Contents



ITEM 7.
    MAJOR
    SHAREHOLDERS AND RELATED PARTY TRANSACTIONS  A.
    Major
    Shareholders      Shares BeneficiallyOwnedName

Number

PercentXiaofeng Peng


75,500,000



70.67
%     B.
    Related
    Party Transactions    Restructuring
       92




---



##### Table of Contents



Borrowings
  Loan
    from Mr. Xiaofeng Peng
      Loan
    from Jiangxi Liouxin Industry Co., Ltd.
    Loan
    from Suzhou Liouxin
    Entrusted
    Loan from Jiangxi Liouxin Industry Co., Ltd.
      Land Use
    Rights and Property Ownership
   93




---



##### Table of Contents



Sublease
    of Property
    Guarantees
    Stock
    Option Grants
    Individual
    Income Tax Withholding Obligation
    C.
    Interests
    of Experts and Counsel    ITEM 8.
    FINANCIAL
    INFORMATION  A.
    Consolidated
    Statements and Other Financial Information  page F-1
  Legal
    Proceedings
    Dividend
    Distribution Policy
         94




---



##### Table of Contents



B.
    Significant
    Changes    ITEM 9.
    THE
    OFFER AND LISTING        High

Low2007 (from June 1)Quarterly Highs and LowsSecond Quarter 2007

$32.20

$23.20Third Quarter 2007

73.95

33.53Fourth Quarter 2007

70.00

26.91Monthly Highs and LowsJune 2007

32.20

23.20July 2007

45.10

33.53August 2007

51.56

37.05September 2007

73.95

52.62October 2007

68.53

35.73November 2007

41.89

26.91December 2007

70.00

32.302008Monthly Highs and LowsJanuary 2008

49.37

33.91February 2008

38.34

27.77March 2008

$28.99

$20.43     ITEM 10.
    ADDITIONAL
    INFORMATION  A.
    Share
    Capital    B.
    Memorandum
    and Articles of Association   95




---



##### Table of Contents



Ordinary
    Shares
    Meetings
      Voting
    rights
    
    the chairman of the meeting;
    at least three shareholders present in person or, in the case of
    a shareholder being a corporation, by its duly authorized
    representative, or by proxy for the time being entitled to vote
    at the meeting;
    any shareholder or shareholders present in person or, in the
    case of a shareholder being a corporation, by its duly
    authorized representative, or by proxy and representing not less
    than one-tenth of the total voting rights of all the
    shareholders having the right to vote at the meeting; or
    a shareholder or shareholders present in person or, in the case
    of a shareholder being a corporation, by its duly authorized
    representative, or by proxy and holding not less than one-tenth
    of the issued share capital of our voting shares.     96




---



##### Table of Contents



Protection
    of minority shareholders
          Dividends
         97




---



##### Table of Contents



Transfer
    of shares
      
    the instrument of transfer is lodged with us, accompanied by the
    relevant certificate for the ordinary shares and such other
    evidence as our board of directors may reasonably require to
    show the right of the transferor to make the transfer;
    the instrument of transfer is in respect of only one class of
    ordinary shares;
    the instrument of transfer is properly stamped, if applicable;
    in the case of a transfer to joint holders, the number of joint
    holders to whom the ordinary share is to be transferred does not
    exceed four; or
    a fee of such maximum sum as a designated stock exchange may
    determine to be payable, or such lesser sum as our board of
    directors may from time to time require, is paid to us.   98




---



##### Table of Contents



Liquidation
      Alteration
    of capital
    
    increase our capital by such sum, to be divided into shares of
    such amounts, as the resolution shall prescribe;
    consolidate and divide all or any of our share capital into
    shares of larger amount than our existing shares;
    cancel any shares which at the date of the passing of the
    resolution have not been taken or agreed to be taken by any
    person, and diminish the amount of its share capital by the
    amount of the shares so cancelled;
    sub-divide our shares or any of them into shares of smaller
    amount than is fixed by our fourth amended and restated
    memorandum of association, subject nevertheless to the Cayman
    Companies Law, and so that the resolution whereby any share is
    sub-divided may determine that, as between the holders of the
    shares resulting from such subdivision, one or more of the
    shares may have any such preference or other special rights,
    over, or may have such deferred rights or be subject to any such
    restrictions as compared with the others as we have power to
    attach to unissued or new shares; and
    divide shares into several classes and without prejudice to any
    special rights previously conferred on the holders of existing
    shares, attach to the shares respectively any preferential,
    deferred, qualified or special rights, privileges, conditions or
    such restrictions which in the absence of any such determination
    in general meeting as the directors may determine.   99




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##### Table of Contents



Calls
    on shares and forfeiture of shares
    Redemption
    of shares
    Variations
    of rights of shares
    Inspection
    of register of members
    
    by shareholders for such times and on such days as our board of
    directors may determine, without charge, at our registered
    office or such other place where we keep our register in
    accordance with the Cayman Companies Law, or
    by any other person, upon a maximum payment of $2.50 or such
    other sum specified by our board of directors, at our registered
    office or such other place where we keep our register in
    accordance with the Cayman Companies Law, or if appropriate,
    upon a maximum payment of $1.00 or such other sum specified by
    our board of directors at the registration office.  Designations
    and classes of shares
    Anti-takeover
    provisions
   100




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##### Table of Contents



Share
    repurchase
    Untraceable
    shareholders
    
    all checks or warrants in respect of dividends of such shares,
    not being less than three in number, for any sums payable in
    cash to the holder of such shares have remained uncashed for a
    period of 12 years prior to the publication of the advertisement
    and during the three months referred to in third bullet point
    below;
    we have not during that time received any indication of the
    whereabouts or existence of the shareholder or person entitled
    to such shares by death, bankruptcy or operation of law; and
    we have caused an advertisement to be published in newspapers in
    the manner stipulated by our amended and restated articles of
    association, giving notice of our intention to sell these
    shares, and a period of three months has elapsed since such
    advertisement and the stock exchange on which we list has been
    notified of such intention    History
    of Securities Issuances
    Ordinary
    shares
        Series A
    preferred shares
    Series B
    preferred shares
   101




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##### Table of Contents



Series C
    preferred shares
    Differences
    in Corporate Law
    Mergers
    and similar arrangements
    
    a majority in number of each class of shareholders and
    creditors, respectively, with whom the arrangement is to be
    made, and
    in addition, at least three-fourths in value of each such class
    of shareholders and creditors, respectively,    
    the company is not proposing to act illegally or beyond the
    scope of its authority;
    the statutory provisions as to majority vote have been complied
    with;
    the shareholders have been fairly represented at the meeting in
    question;
    the arrangement is such that a businessman would reasonably
    approve; and
    the arrangement is not one that would more properly be
    sanctioned under some other provision of the Cayman Companies
    Law or that would amount to a fraud on the minority
    under the Cayman Islands law.      Shareholders
    suits
    
    a company is acting or proposing to act illegally or beyond the
    scope of its authority; 102




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##### Table of Contents




    the act complained of, although not beyond the scope of its
    authority, could be effected duly if authorized by more than a
    simple majority vote which has not been obtained; and
    those who control the company are perpetrating a fraud on
    the minority under the Cayman Islands law.  C.
    Material
    Contracts  Form F-1 No. 333-142881)
  D.
    Exchange
    Controls    E.
    Taxation  Cayman
    Islands Taxation
    Peoples
    Republic of China Taxation
         103




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##### Table of Contents



Certain
    U.S. Federal Income Tax Considerations
        
    certain financial institutions;
    insurance companies;
    broker dealers;
    U.S. expatriates;
    traders that elect to mark-to-market;
    tax-exempt entities;
    persons liable for alternative minimum tax;
    persons holding a note, ADS or ordinary share as part of a
    straddle, hedging, conversion or integrated transaction;
    persons whose functional currency is not the U.S. dollar;
    persons that actually or constructively own 10% or more of our
    voting stock; or
    persons holding ADSs or ordinary shares through partnerships or
    other entities treated as partnerships for U.S. federal
    income tax purposes.    
    a citizen or resident of the United States;
    a corporation (or other entity taxable as a corporation for
    U.S. federal income tax purposes) organized under the laws
    of the United States, any state in the United States or the
    District of Columbia;
    an estate whose income is subject to U.S. federal income
    taxation regardless of its source; or
    a trust that (1) is subject to the primary supervision of a
    court within the United States and one or more U.S. persons
    have the authority to control all substantial decisions of the
    trust or (2) was in existence on August 20, 1996, was
    treated as a U.S. person under the Internal Revenue Code on
    the previous day and has a valid election in effect under
    applicable U.S. Treasury regulations to be treated as a
    U.S. person.    non-U.S. tax
 104




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##### Table of Contents



ADSs
      Taxation
    of Dividends and Other Distributions on the ADSs or Ordinary
    Shares
        U.S.-PRC U.S.-PRC
  Taxation
    of Dispositions of ADSs or Ordinary Shares
   105




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##### Table of Contents



U.S.-PRC
  Passive
    Foreign Investment Company
  non-U.S. corporation
  
    at least 75% of its gross income is passive; or
    at least 50% of the value of its assets (based on an average of
    the quarterly values of the assets during a taxable year) is
    attributable to assets that produce or are held for the
    production of passive income.        
    the excess distribution or gain will be allocated ratably over
    your holding period for the ADSs or ordinary shares;
    the amount allocated to the current taxable year, and any
    taxable year prior to the first taxable year in which we became
    a PFIC, will be treated as ordinary income; and
    the amount allocated to each other year will be subject to the
    highest tax rate in effect for that year and the interest charge
    generally applicable to underpayments of tax will be imposed on
    the resulting tax attributable to each such year.     106




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##### Table of Contents



Information
    Reporting and Backup Withholding
  Form W-9.
   107




---



##### Table of Contents



F.
    Dividends
    and Paying Agents    G.
    Statement
    by Experts    H.
    Documents
    on Display  Form F-1
  Form 20-F, 1-800-SEC-0330
    I.
    Subsidiary
    Information    ITEM 11.
    QUALITATIVE
    AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK  Quantitative
    and Qualitative Disclosure about Market Risks
  Foreign
    currency risk
     108




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##### Table of Contents



As at December 31, 2006


As at December 31, 2007()


(US$)


()


(US$)Assets


7,145,900



54,910,399



33,249,672



137,831,172Liabilities


(468,547
)


(58,676,243
)


(16,227,974
)


(254,009,481
)Net exposure


6,677,352



(3,765,844
)


17,021,698



(116,178,309
)           Interest
    rate risk
   109




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##### Table of Contents



Credit
    risk
    Liquidity
    risk
    ITEM 12.
    DESCRIPTION
    OF SECURITIES OTHER THAN EQUITY SECURITIES   110




---



##### Table of Contents



PART II  ITEM 13.
    DEFAULTS,
    DIVIDEND ARREARAGES AND DELINQUENCIES    ITEM 14.
    MATERIAL
    MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
    PROCEEDS  A.
    Material
    Modification to the Instruments Defining the Rights of Security
    Holders    B.
    Material
    Modification to the Rights of Registered Securities by Issuing
    or Modifying or any Other Class of Securities    C.
    Withdrawal
    or Substitution of a Material Amount of the Assets Securing any
    Registered Securities    D.
    Change
    of Trustees or Paying Agents for any Registered Securities    E.
    Use
    of Proceeds    ITEM 15.
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e)
        ITEM 16.
    RESERVED  ITEM 16A.
    AUDIT
    COMMITTEE FINANCIAL EXPERT   111




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##### Table of Contents



ITEM 16B.
    CODE
    OF ETHICS  Form F-1 www.ldksolar.com
  ITEM 16C.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    2006

2007Audit fees
    (1)

$
478,620


$
673,905Audit-related fees
    (2)

$
390,453


$
1,555,507     (1)
    
    Audit fees means the
    aggregate fees billed for professional services rendered by our
    independent auditor for the audit of our consolidated financial
    statements.(2)
    
    Audit-related fees
    means the aggregate fees billed for assurance and related
    services by our independent auditor that are reasonably related
    to the performance of the audit or review of our consolidated
    financial statements and are not reported under Audit
    fees. Services comprising the fees disclosed under the
    category of Audit-related fees in 2007 involve
    principally the issue of comfort letter and rendering of listing
    advice in connection with our IPO.  case-by-case
    ITEM 16D.
    EXEMPTIONS
    FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES    ITEM 16E.
    PURCHASES
    OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
    PURCHASERS   112




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##### Table of Contents



PART III  ITEM 17.
    FINANCIAL
    STATEMENTS    ITEM 18.
    FINANCIAL
    STATEMENTS  page F-1
  ITEM 19.
    EXHIBITS    ExhibitNumber

Document1
.1

Fourth Amended and Restated Memorandum and Articles of
    Association of the registrant, incorporated by reference to
    Exhibit 3.2 to our Registration Statement on Form F-1 filed with
    the SEC (File Number: 333-142881).2
.1

Form of Deposit Agreement, incorporated by reference to
    Registration Statement on Form F-6 filed with the SEC
    (Registration No. 333-142899).2
.2

Amended and Restated Shareholders Agreement, dated
    December 19, 2006, incorporated by reference to
    Exhibit 4.4 to our Registration Statement on Form F-1
    filed with the SEC (File Number: 333-142881).4
.1

Form Employment Agreement between the registrant and each senior
    officer, incorporated by reference to Exhibit 10.2 to our
    Registration Statement on Form F-1 filed with the SEC (File
    Number: 333-142881).4
.2

Form Service Agreement between the registrant and each executive
    director, incorporated by reference to Exhibit 10.3 to our
    Registration Statement on Form F-1 filed with the SEC (File
    Number: 333-142881).4
.3

Form Service Agreement between the registrant and each
    independent director, incorporated by reference to
    Exhibit 10.4 to our Registration Statement on Form F-1
    filed with the SEC (File Number: 333-142881).4
.4

Form Confidentiality and Non-compete Agreement between the
    registrant and each senior officer, engineer and technician,
    incorporated by reference to Exhibit 10.5 to our
    Registration Statement on Form F-1 filed with the SEC (File
    Number: 333-142881).4
.5

Summary English translation of Cooperation Agreement, dated
    October 10, 2005, between the registrant and Shanghai
    Jiaotong University, incorporated by reference to Exhibit 10.6
    to our Registration Statement on Form F-1 filed with the SEC
    (File Number: 333-142881)4
.6

Agreement, dated June 21, 2005, between GT Solar
    Technologies, as seller, and Jiangxi LDK Solar, as buyer
    (portions of the exhibit have been omitted pursuant to a request
    for confidential treatment), incorporated by reference to
    Exhibit 10.7.1 to our Registration Statement on Form F-1 filed
    with the SEC (File Number: 333-142881)4
.7

Addendum #2 to Agreement, dated August 13, 2005, between GT
    Solar Technologies, as seller, and Jiangxi LDK Solar, as buyer,
    incorporated by reference to Exhibit 10.7.2 to our Registration
    Statement on Form F-1 filed with the SEC (File Number:
    333-142881)4
.8

Agreement, Phase 3, dated January 6, 2006, between GT
    Solar Technologies, as seller, and Jiangxi LDK Solar, as buyer,
    incorporated by reference to Exhibit 10.7.3 to our
    Registration Statement on Form F-1 filed with the SEC (File
    Number: 333-142881).4
.9

Agreement, Phase 4, dated October 1, 2006, between GT
    Solar, as seller, and Jiangxi LDK Solar, as buyer, incorporated
    by reference to Exhibit 10.7.4 to our Registration
    Statement on Form F-1 filed with the SEC (File
    Number: 333-142881).4
.10

Purchasing Agreement, dated January 5, 2007, between HCT
    Shaping, as seller, and Jiangxi LDK Solar, as buyer,
    incorporated by reference to Exhibit 10.8 to our
    Registration Statement on Form F-1 filed with the SEC (File
    Number: 333-142881).4
.11

Contract, dated January 25, 2006, between Meyer Burger AG,
    as seller, and Jiangxi LDK Solar, as buyer, incorporated by
    reference to Exhibit 10.9 to our Registration Statement on Form
    F-1 filed with the SEC (File Number: 333-142881). 113




---



##### Table of Contents



ExhibitNumber

Document4
.12

Summary English translation of Cooperation Agreement, dated
    October 16, 2005, between Suntech Power Holdings Co., Ltd.
    and Jiangxi LDK Solar, incorporated by reference to Exhibit
    10.10 to our Registration Statement on Form F-1 filed with the
    SEC (File Number: 333-142881).4
.13

Sales Contract, dated October 29, 2006, between Technischer
    Warenhandel Heller and NCA Fortin Inc., as co-sellers, and
    Jiangxi LDK Solar, as buyer, incorporated by reference to
    Exhibit 10.11 to our Registration Statement on Form F-1 filed
    with the SEC (File Number: 333-142881).4
.14

Five-Year Sales Contract, dated November 1, 2006, between
    Prime GLP Inc., as seller, and Jiangxi LDK Solar, as buyer,
    incorporated by reference to Exhibit 10.12 to our Registration
    Statement on Form F-1 filed with the SEC (File
    Number: 333-142881).4
.15

Best Effort Cooperation Agreement, dated December 4, 2006,
    between Kunical International Group Ltd., as seller, and Jiangxi
    LDK Solar, as buyer, incorporated by reference to Exhibit 10.13
    to our Registration Statement on Form F-1 filed with the SEC
    (File Number: 333-142881).4
.16

Eight-Year Silicon Sales Contract, dated December 8, 2006,
    between Komex Inc., as seller, and Jiangxi LDK Solar, as buyer,
    incorporated by reference to Exhibit 10.14 to our Registration
    Statement on Form F-1 filed with the SEC (File
    Number: 333-142881).4
.17

Summary English translation of Cooperation Agreement, dated
    March 28, 2007, between Emei Semi-conductor Materials
    Plant, as seller, and Jiangxi LDK Solar, as buyer, incorporated
    by reference to Exhibit 10.15 to our Registration Statement on
    Form F-1 filed with the SEC (File Number: 333-142881).4
.18

Summary English translation of Framework Cooperation Agreement,
    dated April 8, 2007, between Luoyang Zhonggui Hi-Tech Co.,
    Ltd., as seller, and Jiangxi LDK Solar, as buyer, incorporated
    by reference to Exhibit 10.16 to our Registration Statement on
    Form F-1 filed with the SEC (File Number: 333-142881).4
.19

Wafer Sales Agreement, dated March 5, 2006, between Solland
    Solar Energy B.V., as buyer, and Jiangxi LDK Solar, as seller,
    as supplemented on October 26, 2006 with respect to
    appendices A to F thereto and on April 3, 2007
    with respect to appendix D thereto (a portion of the
    exhibit has been omitted pursuant to a request for confidential
    treatment), incorporated by reference to Exhibit 10.17 to our
    Registration Statement on Form F-1 filed with the SEC (File
    Number: 333-142881).4
.20

Summary English translation of Solar Cell Silicon Wafer Supply
    Agreement, dated July 6, 2006, between Canadian Solar Inc.,
    as buyer, and Jiangxi LDK Solar, as seller, as supplemented on
    August 11, 2006, incorporated by reference to Exhibit 10.18
    to our Registration Statement on Form F-1 filed with the SEC
    (File Number: 333-142881).4
.21

Summary English translation of Silicon Supply Agreement, dated
    November 11, 2006, between Jiangsu Linyang Solarfun Co.,
    Ltd., as buyer, and Jiangxi LDK Solar, as seller, incorporated
    by reference to Exhibit 10.19 to our Registration Statement on
    Form F-1 filed with the SEC (File Number: 333-142881).4
.22

Summary English translation of Silicon Supply Cooperation
    Agreement, dated November 14, 2006, between Jiangsu Linyang
    Solarfun Co., Ltd., as buyer, and Jiangxi LDK Solar, as seller,
    incorporated by reference to Exhibit 10.20 to our Registration
    Statement on Form F-1 filed with the SEC (File
    Number: 333-142881).4
.23

Cooperation Agreement, dated March 28, 2007, between
    Q-Cells AG and Jiangxi LDK Solar, incorporated by reference to
    Exhibit 10.21 to our Registration Statement on Form F-1 filed
    with the SEC (File Number: 333-142881).4
.24

Summary English translation of Guarantee Agreement, dated
    October 21, 2005, among Suzhou Liouxin Industry Co., Ltd.,
    Saiweng Technology (Suzhou) Co., Ltd., Jiangxi Liouxin Industry
    Co., Ltd. and Mr. Xiaofeng Peng, incorporated by reference
    to Exhibit 10.6 to our Registration Statement on
    Form F-1
    filed with the SEC (File Number:
    333-142881).4
.25

Summary English translation of Loan Agreement, dated
    July 24, 2006, between Jiangxi LDK Solar, as borrower, and
    Suzhou Liouxin Industry Co., Ltd., as lender, incorporated by
    reference to Exhibit 10.24 to our Registration Statement on Form
    F-1 filed with the SEC (File Number: 333-142881). 114




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##### Table of Contents



ExhibitNumber

Document4
.26

Summary English translation of Loan Repayment Confirmation
    Agreement, dated March 28, 2006, among Saiweng Technology
    (Suzhou) Co., Ltd., Jiangxi LDK Solar and Mr. Xiaofeng
    Peng, incorporated by reference to Exhibit 10.25 to our
    Registration Statement on Form F-1 filed with the SEC (File
    Number: 333-142881).4
.27

Summary English translation of Loan Repayment Confirmation
    Agreement, dated April 8, 2006, between Jiangxi LDK Solar
    and Mr. Xiaofeng Peng, incorporated by reference to Exhibit
    10.26 to our Registration Statement on Form F-1 filed with the
    SEC (File Number: 333-142881).4
.28

Summary English translation of Renminbi Loan Agreement, dated
    March 20, 2006, between China Construction Bank
    Corporation, Xinyu Branch, as lender, and Jiangxi LDK Solar, as
    borrower, incorporated by reference to Exhibit 10.28 to our
    Registration Statement on Form F-1 filed with the SEC (File
    Number: 333-142881).4
.29

Summary English translation of Entrusted Loan Agreement, dated
    December 22, 2006, among Jiangxi Liouxin Industry Co.,
    Ltd., as trustor, Bank of China Limited, Xinyu Branch, as
    trustee lender, and Jiangxi LDK Solar, as borrower, incorporated
    by reference to Exhibit 10.29 to our Registration Statement on
    Form F-1 filed with the SEC (File Number: 333-142881).4
.30

Summary English translation of Foreign Currency Loan Contract,
    dated December 29, 2006, between China Development Bank, as
    lender, and Jiangxi LDK Solar, as borrower, incorporated by
    reference to Exhibit 10.30 to our Registration Statement on Form
    F-1 filed with the SEC (File Number: 333-142881).4
.31

Summary English translation of Foreign Currency Loan Contract,
    dated February 5, 2007, between Bank of China Limited,
    Xinyu Branch, as lender, and Xiangxi LDK Solar, as borrower,
    incorporated by reference to Exhibit 10.31 to our Registration
    Statement on Form F-1 filed with the SEC (File
    Number: 333-142881).4
.32

Summary English translation of Land Use Right Transfer
    Agreement, dated May 15, 2006, between Jiangxi LDK Solar
    and Jiangxi Liouxin Industry Co., Ltd., incorporated by
    reference to Exhibit 10.33 to our Registration Statement on Form
    F-1 filed with the SEC (File Number: 333-142881).4
.33

Summary English translation of Real Property Purchase Agreement,
    dated May 15, 2006, between Jiangxi LDK Solar and Jiangxi
    Liouxin Industry Co., Ltd., incorporated by reference to Exhibit
    10.34 to our Registration Statement on Form F-1 filed with the
    SEC (File Number: 333-142881).4
.34

Summary English translation of Land Use Right Transfer
    Agreement, dated September 5, 2006, between Jiangxi LDK
    Solar and Jiangxi Liouxin Industry Co., Ltd., incorporated by
    reference to Exhibit 10.35 to our Registration Statement on Form
    F-1 filed with the SEC (File Number: 333-142881).4
.35

Summary English translation of Real Property Purchase Agreement,
    dated September 5, 2006, between Jiangxi LDK Solar and
    Jiangxi Liouxin Industry Co., Ltd., incorporated by reference to
    Exhibit 10.36 to our Registration Statement on Form F-1 filed
    with the SEC (File Number: 333-142881).4
.36

Supply Agreement, dated July 18, 2007, between GT Solar, as
    seller, and LDK Solar Co., Ltd and Jiangxi LDK Solar, as buyers
    (certain information in the agreement has been omitted pursuant
    to a request for confidential treatment).4
.37

Summary translation of Loan Guarantee Agreement, dated
    February 5, 2007, between Mr. Xiaofeng Peng and Bank
    of China Xinyu branch.4
.38

Summary translation of Loan Guarantee Agreement, dated
    December 29, 2006, among Mr. Xiaofeng Peng,
    Ms. Zhou Shan, and China Development Bank.4
.39

Summary translation of Loan Guarantee Agreement, dated
    March 20, 2006, between Mr. Xiaofeng Peng and China
    Construction Bank.4
.40

Summary translation of Cooperation Agreement, dated
    January 23, 2007, between Jiangxi LDK Solar and Nanchang
    University.8


List of subsidiaries. 115




---



##### Table of Contents



ExhibitNumber

Document11


Code of Ethics of the registrant, incorporated by reference to
    Exhibit 99.1 to our Registration Statement on Form F-1
    filed with the filed with the SEC (File Number: 333-142881).12
.1

Certification of the principal executive officer pursuant to
    Section 302 of Sarbanes-Oxley Act of 200212
.2

Certification of the principal financial officer pursuant to
    Section 302 of Sarbanes-Oxley Act of 200213
.1

Certification of the principal executive officer pursuant to
    Section 906 of Sarbanes-Oxley Act of 200213
.2

Certification of the principal financial officer pursuant to
    Section 906 of Sarbanes-Oxley Act of 2002  116




---



##### Table of Contents



SIGNATURE
  Form 20-F
    By:
    /s/  Jack
    Lai   Title:
    Chief Financial Officer   117




---



##### Table of Contents



LDK SOLAR
    CO., LTD.
  INDEX
    TO CONSOLIDATED FINANCIAL STATEMENTS
  PageReport of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets as of
    December 31, 2006 and 2007


F-3Consolidated Statements of Operations for the
    Period from July 5, 2005 to December 31, 2005 and the
    years ended December 31, 2006 and 2007


F-6Consolidated Statements of Shareholders
    Equity and Comprehensive (Loss) Income for the Period from
    July 5, 2005 to December 31, 2005 and years ended
    December 31, 2006 and 2007


F-7Consolidated Statements of Cash Flow for the
    Period from July 5, 2005 to December 31, 2005 and the
    years ended December 31, 2006 and 2007


F-9Notes to the Consolidated Financial Statements
    for the Period from July 5, 2005 to December 31, 2005
    and the years ended December 31, 2006 and 2007


F-11  F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM               F-2




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS
 AS OF DECEMBER 31, 2006 AND 2007
   December 31,

December 31,Note

2006

2007ASSETSCurrent assetsCash and cash equivalents




30,227



83,470Pledged bank deposits

(2f)


4,956



135,950Trade accounts receivable, net




1,490



3,767Bills receivable




816



Inventories, net

(3) (9)


94,886



349,997Prepayments to suppliers

(4)


37,718



138,193Deferred expenses




991



Other current assets, including nil in 2006 and $21,742 in 2007
    due from the Groups executives and employees

(5)


1,662



29,825Deferred income tax assets

(12)






546Total current assets




172,746



741,748Property, plant and equipment, net

(6) (9)


100,875



336,763Deposit for property, plant and equipment




11,090



151,233Intangible asset, net

(7)


1,149



1,096Land use rights

(8) (9) (20)


6,711



29,259Inventories to be processed beyond one year, net

(3)






29,981Prepayments to suppliers to be utilized beyond one year

(4)






18,994Other financial assets








525Deferred income tax assets

(12)


148



387Total assets




292,719



1,309,986     F-3




---



##### Table of Contents



LDK SOLAR CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS  (Continued)
    AS OF DECEMBER 31, 2006 AND 2007
  LIABILITIES,
    REDEEMABLE CONVERTIBLE PREFERRED SHARES
    AND SHAREHOLDERS EQUITY
  December 31,

December 31,Note

2006

2007Current liabilitiesShort-term bank borrowings


(9
)


56,765



264,101Trade accounts payable






6,119



18,032Advance payments from customers






40,002



141,223Accrued expenses and other payables


(10
)


14,600



95,301Other financial liabilities










3,357Total current liabilities






117,486



522,014Warrants






2



Long-term bank borrowings, excluding current portions


(9
)


30,245



25,125Advance payments from customers  noncurrent










67,554Other liabilities










2,222Total liabilities






147,733



616,915Series A redeemable convertible preferred shares: US$0.10
    par value; 5,000,000 and nil shares authorized as of
    December 31, 2006 and 2007, respectively; 4,580,000 and nil
    shares issued and outstanding as of December 31, 2006 and
    2007, respectively (Aggregate liquidation value of US$19,500 and
    nil as of December 31, 2006 and 2007, respectively)


(14
)


15,447



Series B redeemable convertible preferred shares: US$0.10
    par value; 8,000,000 and nil shares authorized as of
    December 31, 2006 and 2007, respectively; 8,000,000 and nil
    shares issued and outstanding as of December 31, 2006 and
    2007, respectively (Aggregate liquidation value of US$62,400 and
    nil as of December 31, 2006 and 2007, respectively)


(14
)


49,721



Series C redeemable convertible preferred shares: US$0.10
    par value; 3,000,000 and nil shares authorized as of
    December 31, 2006 and 2007, respectively; 3,000,000 and nil
    shares issued and outstanding as of December 31, 2006 and
    2007, respectively (Aggregate liquidation value of US$29,250 and
    nil as of December 31, 2006 and 2007, respectively)


(14
)


22,576



  F-4




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##### Table of Contents



LDK SOLAR CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS  (Continued)
    AS OF DECEMBER 31, 2006 AND 2007
  LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED SHARES
    AND SHAREHOLDERS EQUITY  (Continued)
  December 31,

December 31,Note

2006

2007Shareholders equityOrdinary shares: US$0.10 par value; 134,000,000 and
    499,580,000 shares authorized as of December 31, 2006
    and 2007, respectively; 75,000,000 and 106,044,700 shares
    issued and outstanding as of December 31, 2006 and 2007,
    respectively


(15
)


7,500



10,604Additional paid-in capital






29,302



486,253Subscription receivable for ordinary shares






(7,490
)


Statutory reserve






3,623



18,697Accumulated other comprehensive income






2,319



31,481Retained earnings






21,988



146,036Total shareholders equity






57,242



693,071Commitments and contingencies


(13
)Total liabilities, redeemable convertible preferred shares and
    shareholders equity






292,719



1,309,986     F-5




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
  From July 5,2005 to

Year Ended

Year EndedNote

December 31, 2005

December 31, 2006

December 31, 2007Net sales156mm by 156mm wafers










36,263



408,125125mm by 125mm wafers










66,189



92,270150mm by 150mm wafers














1,338Processing of wafers on behalf of others










489



18,697Silicon materials










2,513



3,516Total net sales










105,454



523,946Cost of goods sold156mm by 156mm wafers










(21,399
)


(268,311
)125mm by 125mm wafers










(40,231
)


(68,509
)150mm by 150mm wafers














(1,127
)Processing of wafers on behalf of others










(313
)


(13,094
)Silicon materials










(2,019
)


(2,668
)Total cost of goods sold










(63,962
)


(353,709
)Gross profit










41,492



170,237Selling expenses










(286
)


(873
)General and administrative expenses






(77
)


(3,771
)


(19,360
)Research and development expenses






(66
)


(290
)


(3,202
)Total operating expenses






(143
)


(4,347
)


(23,435
)(Loss) income from operations






(143
)


37,145



146,802Other income (expenses):Interest income






4



105



4,109Interest expense and amortization of discount on exchangeable
    notes


(11
)


(102
)


(7,133
)


(9,419
)Decrease in fair value of warrants










9



2Foreign currency exchange loss, net






(68
)


(1,325
)


(1,654
)Government subsidy










1,268



3,461(Loss) earnings before income tax benefit






(309
)


30,069



143,301Income tax benefit


(12
)


35



113



758Net (loss) income






(274
)


30,182



144,059Accretion of Series A redeemable convertible preferred
    shares to redemption value


(14
)






(814
)


(860
)Accretion of Series B redeemable convertible preferred
    shares to redemption value


(14
)






(1,799
)


(2,726
)Accretion of Series C redeemable convertible preferred
    shares to redemption value


(14
)






(116
)


(1,351
)Deemed dividend to Series A redeemable convertible
    preferred shareholders










(1,568
)


Net (loss) income available to ordinary shareholders






(274
)


25,885



139,122Basic (loss) earnings per ordinary share


(18
)


(0.01
)


0.35



1.50Diluted (loss) earnings per ordinary share


(18
)


(0.01
)


0.35



1.37     F-6




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS
    EQUITY
    AND COMPREHENSIVE (LOSS) INCOME
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
  Subscription



Accumulated

(AccumulatedAdditional

Receivable for



Other

deficit) /

Total

TotalOrdinary Shares

Contributed

Paid-in

Ordinary

Statutory

Comprehensive

Retained

Shareholders

ComprehensiveNumber

Amount

Capital

Capital

Share

Reserve

Income

Earnings

Equity

(Loss) / IncomeJuly 5, 2005






































Net loss






























(274
)


(274
)


(274
)Foreign currency translation adjustment, net of nil tax


























39







39



39Total comprehensive loss






































(235
)Capital contributions (Note 1)










11,534























11,534December 31, 2005










11,534















39



(274
)


11,299Net income






























30,182



30,182



30,182Appropriation to statutory reserve (Note 16)






















3,623







(3,623
)


Foreign currency translation adjustment, net of nil tax


























2,280







2,280



2,280Total comprehensive income






































32,462Capital contributions (Note 1)










17,466























17,466Effect of reorganization (Note 1):Distributions to shareholders in connection with the
    Reorganization (Note 1)










(8,000
)






















(8,000
)Issuance of ordinary shares (Note 1& Note 15)


75,000,000



7,500











(7,490
)














10Transfer to additional paid-in capital










(21,000
)


21,000



















Share options (Note 17)














2,294



















2,294Deemed dividend to Series A redeemable convertible
    preferred shareholders














1,568















(1,568
)


Accretion of Series A redeemable convertible preferred
    shares to redemption value (Note 14)






























(814
)


(814
)Accretion of Series B redeemable convertible preferred
    shares to redemption value (Note 14)






























(1,799
)


(1,799
)Accretion of Series C redeemable convertible preferred
    shares to redemption value (Note 14)






























(116
)


(116
)Discount amortization on exchangeable notes














4,440



















4,440December 31, 2006


75,000,000



7,500







29,302



(7,490
)


3,623



2,319



21,988



57,242  F-7




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
    AND COMPREHENSIVE (LOSS) INCOME  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
  Subscription



AccumulatedAdditional

Receivable for



Other



Total

TotalOrdinary Shares

Contributed

Paid-in

Ordinary

Statutory

Comprehensive

Retained

Shareholders

ComprehensiveNumber

Amount

Capital

Capital

Share

Reserve

Income

Earnings

Equity

IncomeNet income






























144,059



144,059



144,059Appropriation to statutory reserve (Note 16)






















15,074







(15,074
)


Settlement of subscription receivable


















7,490















7,490Foreign currency translation adjustment, net of nil tax


























29,162







29,162



29,162Total comprehensive income






































173,221Issuance of new shares, net of related expenses US$26,866


14,007,700



1,400







349,941



















351,341Conversion of Series A, Series B and Series C
    redeemable convertible preferred shares


15,580,000



1,558







91,123



















92,681Issuance of ordinary shares upon exercise of share options


1,457,000



146







6,338



















6,484Share options (Note 17)














9,549



















9,549Accretion of Series A redeemable convertible preferred
    shares to redemption value (Note 14)






























(860
)


(860
)Accretion of Series B redeemable convertible preferred
    shares to redemption value (Note 14)






























(2,726
)


(2,726
)Accretion of Series C redeemable convertible preferred
    shares to redemption value (Note 14)






























(1,351
)


(1,351
)December 31, 2007


106,044,700



10,604







486,253







18,697



31,481



146,036



693,071     F-8




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
  From July 5,

Year

Year2005 to

Ended

EndedDecember 31,

December 31,

December 31,Note

2005

2006

2007Cash flows from operating activities:Net (loss) income






(274
)


30,182



144,059Adjustments to reconcile net (loss) income to net cash used in
    operating activities:Depreciation and amortization






1



2,766



15,085Deferred income tax benefit






(35
)


(113
)


(758
)Share-based compensation










2,028



9,390Interest on exchangeable notes










13



Amortization of discount on the exchangeable notes










4,440



Decrease in fair value of warrants










(9
)


(2
)Changes in operating assets and liabilities:Pledged bank deposits










(4,956
)


(19,900
)Trade accounts receivable and bills receivable










(2,306
)


(1,461
)Inventories










(94,886
)


(285,092
)Prepayments to suppliers






(966
)


(36,752
)


(119,469
)Other assets






(20
)


(1,603
)


(25,475
)Trade accounts payable






3



6,116



11,913Advance payments from customers






3,717



36,285



168,775Accrued expenses and other payables






85



1,728



18,915Other financial liabilities














3,357Net cash provided by (used in) operating activities






2,511



(57,067
)


(80,663
)Cash flows from investing activities:Purchase of land use rights










(5,482
)


(23,452
)Advance to related party






(5,478
)






Purchase of property, plant and equipment






(15,462
)


(72,840
)


(305,171
)Purchase of intangible asset










(1,242
)


Net cash used in investing activities






(20,940
)


(79,564
)


(328,623
)  F-9




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH
    FLOWS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
  From July 5,

Year

Year2005 to

Ended

EndedDecember 31,

December 31,

December 31,Note

2005

2006

2007Cash flows from financing activities:Capital contributions






11,534



2,022



Pledged bank deposits related to bank borrowings














(111,094
)Proceeds from new loans and borrowings










114,116



288,302Repayment of loans and borrowings










(27,106
)


(80,199
)Loans and advances from related parties






16,543



18,773



Repayment of loans and advances from related parties










(29,838
)


Proceeds from issuance of ordinary shares










10



369,489Distributions to shareholders in connection with the
    Reorganization










(8,000
)


Payment of expenses relating to issuance of ordinary shares










(405
)


(4,174
)Proceeds from issuance of exchangeable notes, net of issue cost
    US$52










7,948



Proceeds from
    Series A-2
    redeemable convertible preferred shares, net of issue cost US$51










6,949



Proceeds from Series B redeemable convertible preferred
    shares, net of issue cost US$78










47,922



Proceeds from Series C redeemable convertible preferred
    shares










22,500



Net cash provided by financing activities






28,077



154,891



462,324Effect of foreign currency exchange rate changes on cash and
    cash equivalents






39



2,280



205Net increase in cash and cash equivalents






9,687



20,540



53,243Cash and cash equivalents at beginning of period










9,687



30,227Cash and cash equivalents at end of period






9,687



30,227



83,470Supplemental disclosures of cash flow information:Interest payments, net of amount capitalized










2,680



9,926Supplemental disclosures of non-cash investing and financing
    transaction:Property, plant and equipment contributed as paid-in capital










15,444



Payable for purchase of property, plant and equipment










10,893



60,954Payable for purchase of land use rights










1,268



832Conversion of Series A, Series B and Series C
    redeemable convertible preferred shares into ordinary shares














92,681Conversion from exchangeable notes to
    Series A-1
    redeemable convertible preferred shares










7,948



Offset of amounts due to/from related party










5,478



    F-10




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
  (1)
    PRINCIPAL
    ACTIVITIES, ORGANIZATION AND BASIS OF PRESENTATION  Principal
    activities
      Organization
      ten-for-one
      Series A-1 Series A-2
 F-11




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
               Basis
    of presentation
      (2)
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  (a)
    Principles
    of consolidation    (b)
    Use of
    estimates   F-12




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
    (c)
    Foreign
    currency translation        (d)
    Commitments
    and contingencies    (e)
    Cash
    and cash equivalents    (f)
    Pledged
    bank deposits    (g)
    Trade
    accounts receivable   F-13




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
   (h)
    Inventories    (i)
    Property,
    plant and equipment, net      Buildings


30 yearsPlant and machinery


10 yearsFurniture, fixture and office equipment


5 yearsMotor vehicles


6 years       (j)
    Intangible
    asset, net    (k)
    Land
    use rights    (l)
    Impairment
    of long-lived assets   F-14




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
    (m)
    Fair
    value of financial instruments    
    Short-term financial instruments (cash equivalents, pledged bank
    deposits, trade accounts receivable and payable, short-term bank
    borrowings, and accrued liabilities)  cost
    approximates fair value because of the short maturity period.
    Long-term debt  fair value is based on the amount of
    future cash flows associated with each debt instrument
    discounted at the Groups current borrowing rate for
    similar debt instruments of comparable terms. The carrying
    values of the long term loans approximate their fair values as
    all the long-term debt carries variable interest rates which
    approximate rates currently offered by the Companys
    bankers for similar debt instruments of comparable maturities.
    Foreign exchange forward contract  fair value is
    determined by discounting estimated future cash flow, which is
    based on the changes in the forward rate.
    Interest rate swap contract  fair value is based on
    the quotation from the financial institution.  (n)
    Derivative
    financial instruments    (o)
    Revenue
    recognition   F-15




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
         (p)
    Buy/sell
    arrangements    (q)
    Shipping
    and handling    (r)
    Research
    and development costs    (s)
    Advertising
    expenses   F-16




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
   (t)
    Government
    subsidy          (u)
    Income
    taxes    Accounting for Uncertainty in Income
    Taxes  an Interpretation of FASB Statement
    No. 109
 F-17




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
   (v)
    Share-based
    compensation  Share-based Payment
  No. 96-18, Accounting for Equity Instruments That are Issued to
    Other Than Employees for Acquiring, or in Conjunction with
    Selling, Goods or Services.
  (w)
    Embedded
    beneficial conversion of convertible instruments  No. 98-5 Accounting for Convertible Securities with
    Beneficial Conversion Features or Contingently Adjustable
    Conversion Ratios No. 00-27 Application of Issue
    No. 98-5
    to Certain Convertible Instruments
  (x)
    Employee
    benefit plans   F-18




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
    (y)
    Earnings
    (loss) per share      (z)
    Segment
    reporting  Disclosure about Segments of an Enterprise and Related
    Information
  (aa)  Start-up
    costs
  start-up
  (ab)  Recently
    issued accounting pronouncement
  Fair Value Measurements
 F-19




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
       (3)
    INVENTORIES,
    NET  December 31,

December 31,2006

2007Inventories consist of the following:Raw materials


79,496



312,678Work in progress


8,884



24,463Supplies


1,410



13,705Finished goods


5,096



29,13294,886



379,978Inventories, net: Current


94,886



349,997 Non-current






29,981         (4)
    PREPAYMENTS
    TO SUPPLIERS   F-20




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
    (5)
    OTHER
    CURRENT ASSETS  December 31,

December 31,2006

2007Receivable from the Groups executives and employees






21,742VAT recoverable


1,548



5,738Others


114



2,3451,662



29,825     (6)
    PROPERTY,
    PLANT AND EQUIPMENT, NET    December 31,

December 31,2006

2007Buildings


7,716



20,384Plant and machinery


80,549



221,014Furniture, fixtures and office equipment


355



4,519Motor vehicles


636



2,38389,256



248,300Less: Accumulated depreciation


(2,674
)


(16,075
)Construction in progress


14,293



104,538100,875



336,763      F-21




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
   (7)
    INTANGIBLE
    ASSET, NET  December 31,

December 31,2006

2007Technical know-howCost


1,242



1,328Less: Accumulated amortization


(93
)


(232
)1,149



1,096       (8)
    LAND USE
    RIGHTS    (9)
    BANK
    BORROWINGS  (a) Current
  December 31,

December 31,2006

2007Bank borrowings  secured


20,026



224,879Bank borrowings  unsecured


31,739



24,645Current installments of long-term bank borrowings (note (b))


5,000



14,57756,765



264,101          F-22




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
      (b)
    Non-current  December 31,

December 31,2006

2007Secured loan from China Construction Bank


10,245



10,952Secured loan from China Development Bank


25,000



20,000Secured loan from Bank of China






8,75035,245



39,702Less: current portion


(5,000
)


(14,577
)30,245



25,125           2008


14,5772009


15,1252010


5,0002011


5,00039,702  F-23




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
  (10)
    ACCRUED
    EXPENSES AND OTHER PAYABLES    December 31,

December 31,2006

2007Purchase of equipment


10,893



60,954Purchase of land use rights


1,268



832Withholding individual income tax payable






21,742Accrued payroll and welfare


982



3,305Indirect taxes payable


93



286Other accruals


1,364



8,18214,600



95,301     (11)
    INTEREST
    COSTS    From July 5,2005 to

Year Ended

Year EndedDecember 31,

December 31,

December 31,2005

2006

2007Interest costs capitalized






122



173Interest costs charged to income Interest costs


102



2,680



9,926 Change of fair value of interest rate swap contract










(507
) Interest on exchangeable notes






13



 Discount amortization on exchangeable notes






4,440



Sub-total


102



7,133



9,419Total interest costs


102



7,255



9,592   (12)
    INCOME
    TAXES    Cayman
    Islands
   F-24




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
   Peoples
    Republic of China
      HK
    SAR
    United
    States
      From July 5,

Year

Year2005 to

Ended

EndedDecember 31,

December 31,

December 31,2005

2006

2007Current










Deferred


(35
)


(113
)


(758
)Total income tax benefit


(35
)


(113
)


(758
)     From July 5,

Year

Year2005 to

Ended

EndedDecember 31,

December 31,

December 31,2005

2006

2007PRC operations


(309
)


34,510



149,227Non-PRC operations






(4,441
)


(5,926
)Total


(309
)


30,069



143,301  F-25




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
    Year

YearEnded

EndedDecember 31,

December 31,From July 5, 2005 to December 31, 2005

2006

2007Earnings (loss) before income taxes


(309
)


100
%


30,069



100
%


143,301



100
%Computed income tax expense (benefit)


(102
)


33
%


9,922



33
%


47,289



33
%Effect of tax rate differential






0
%


1,465



5
%


824



1
%Change in tax rate






0
%






0
%


214



0
%Non-deductible expensesShare-based compensation






0
%


669



2
%


3,099



2
%Pre-operating expenses


67



(22
%)


217



1
%






0
%Others






0
%


1



0
%






0
%Change in valuation allowance






0
%






0
%


1,132



1
%Tax holiday






0
%


(12,387
)


(41
%)


(53,316
)


(37
%)Actual income tax benefit


(35
)


11
%


(113
)


(0
%)


(758
)


(1
%)     Year

YearEnded

EndedDecember 31,

December 31,2006

2007Decrease in net income per ordinary share: Basic


0.17



0.58 Diluted


0.17



0.51  F-26




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
    December 31,

December 31,2006

2007Deferred tax assets :Pre-operating expenses


148



387Inventories






546Tax loss carryforwards






1,132Total gross deferred tax assets


148



2,065Less: valuation allowance






(1,132
)Net deferred tax asset


148



933Deferred income tax assets: Current






546 Non-current


148



387          F-27




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
      (13)
    COMMITMENTS
    AND CONTINGENCIES  (a)
    Capital
    commitments    Production line construction projects


566,495   (b)
    Purchase
    commitments    December 31,2007Future minimum purchases


170,721   (c)
    Litigation       F-28




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
    (d)
    Outstanding
    bills receivable discounted    (14)
    REDEEMABLE
    CONVERTIBLE PREFERRED SHARES  Series A-1 (Series A-1 Series A-2 (Series A-2 Series A-1 A-2 Series A-1 Series A-1 Series A-2
       F-29




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
      Series A-1 Series A-1 shares, Series A-1 Series A-1 No. 00-27 Application of Issue
    No. 98-5
    to Certain Convertible Instrument
    (15)
    ORDINARY
    SHARES  ten-for-one
  ten-for-one
     F-30




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
     (16)
    STATUTORY
    RESERVE    (17)
    SHARE
    OPTION  Share
    options to employees
                 F-31




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
   Share
    options to non-employees
    Share
    options to investors
  Series A-1 Series A-1
      2006

2007Expected volatility

64%

46.36%51.82%Expected dividends

0%

0%Expected term

3.54.5 years

0.93.2 yearsRisk-free interest rate

4.9%

3.28%4.81%Estimated fair value of underlying ordinary shares

US$4.37

US$7.98US$44.75      F-32




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
      WeightedNumber

Averageof Total

Exercise

Remaining

AggregateNon



Shares Involved

Price

Contractual

IntrinsicEmployees

Employees

Investors

in the Option

Per Share

Term

ValueFor the year ended December 31, 2006Granted


6,230,000



210,000



200,000



6,640,000


US$
4.45Exercised


















Forfeited or cancelled


(380,000
)










(380,000
)


Outstanding as of December 31, 2006


5,850,000



210,000



200,000



6,260,000


US$
4.45



4.6 years



Vested or expected to vest as of December 31, 2006


























Exercisable as of December 31, 2006


























For the year ended December 31, 2007Outstanding as of December 31, 2006


5,850,000



210,000



200,000



6,260,000


US$
4.45Granted during 2007


4,190,750











4,190,750


US$
17.71Exercised


(1,457,000
)










(1,457,000
)

US$
4.45Forfeited or cancelled


(403,400
)


(80,000
)






(483,400
)


Outstanding as of December 31, 2007


8,180,350



130,000



200,000



8,510,350


US$
10.50



3.9 years



310,699Vested or expected to vest as of December 31, 2007


1,980,766



43,333



200,000



2,224,099


US$
4.49



3.51 years



81,322Exercisable as of December 31, 2007


523,766



43,333



200,000



767,099


US$
4.57



3.53 years



32,557       (18)
    EARNINGS
    (LOSS) PER SHARE   F-33




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
     FromJuly 5,

Year

Year2005 to

Ended

EndedDecember 31,

December 31,

December 31,2005

2006

2007Numerator used in basic earnings (loss) per shareIncome from continuing operations attributable to holders of
    ordinary shares


(274
)


25,885



139,122Plus accretion of Series A, Series B and Series C
    Shares to redemption value










4,937Numerator used in diluted earnings (loss) per share


(274
)


25,885



144,059Shares (denominator):Weighted average number of ordinary shares outstanding used in
    computing basic earnings (loss) per share


75,000,000



75,000,000



92,673,914Plus weighted average Series A, Series B and
    Series C Shares outstanding










6,616,165Plus incremental weighted average number of ordinary shares from
    assumed conversion of stock options using the treasury stock
    method










5,569,360Weighted average number of ordinary shares outstanding used in
    computing diluted earnings (loss) per share


75,000,000



75,000,000



104,859,439Earnings (loss) per share  basic


(0.01
)


0.35



1.50Earnings (loss) per share  diluted


(0.01
)


0.35



1.37    F-34




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
   (19)
    SIGNIFICANT
    CONCENTRATIONS AND RISKS  Significant
    concentrations
    US$

EURO

RMB(000s)

(000s)

(000s)In mainland China


32,767



19,997



1,120,533In Hong Kong


2,955







Total in original currency


35,722



19,997



1,120,533US$ equivalent


35,722



29,202



153,401       December 31,

December 31,2006

2007Jiangsu Linyang Solarfun Co., Ltd.


14,654



64,644Q-Cells AG


24



52,277Suntech Power Holdings Co., Ltd.


41,899



35,335      F-35




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
    December 31,

December 31,2006

2007Komex Electronic Materials Inc.


5,668



19,275Targray Technology International Inc


1,892



17,474     Business
    and economic risks
        Currency
    risk
     F-36




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
   (20)
    RELATED
    PARTY TRANSACTIONS                     F-37




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
   (21)
    GEOGRAPHIC
    AND SEGMENT INFORMATION    From July 5,

Year

Year2005 to

Ended

EndedDecember 31,

December 31,

December 31,2005

2006

2007Mainland China






79,647



154,224Taiwan






8,598



152,486Asia Pacific excluding mainland China and Taiwan






8,518



63,809Germany






96



56,210Europe excluding Germany






3,290



49,289North America






5,305



47,928Total net revenue






105,454



523,946       From July 5,

Year

Year2005 to

Ended

EndedDecember 31,

December 31,

December 31,2005

2006

2007Segment and consolidated revenue






105,454



523,946Segment income






36,229



149,227Reconciling items (note (a))


(309
)


(6,160
)


(5,926
)Consolidated earnings (loss) before income tax benefit


(309
)


30,069



143,301Segment assets (note (b))






291,355



1,306,581  F-38




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
  (a)
    Reconciliation
    of segment income to consolidated (loss) earnings before income
    tax benefit  From July 5,

Year

Year2005 to

Ended

EndedDecember 31,

December 31,

December 31,2005

2006

2007Total segment income






36,229



149,227PRC GAAP to US GAAP differences:Pre-operating expenses


(309
)


309



Share-based compensation






(2,028
)


Discount amortization on the exchangeable notes






(4,440
)


Interest on exchangeable notes






(13
)


Decrease in fair value of warrants






9



2Change of fair value of foreign currency forward contracts










(3,357
)Change of fair value of interest rate swap contract










525Others






3



(3,096
)Consolidated (loss) earnings before income tax benefit


(309
)


30,069



143,301   (b)
    Reconciliation
    of total segment assets to consolidated total
    assets  December 31,

December 31,2006

2007Total segment assets


291,355



1,306,581PRC GAAP to US GAAP differences:Pre-operating expenses


148



Cash and other current assets of the Company


3,318



24,881Cash and other receivable of LDK International


47



3,315Cash and other assets of LDK US






597Elimination of inter-companies balances within the Group


(2,149
)


(25,388
)Consolidated total assets


292,719



1,309,986   (22)
    LDK SOLAR
    CO., LTD. (PARENT COMPANY)       F-39




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
       Condensed
    Balance Sheets
  December 31,

December 31,2006

2007Cash and cash equivalents


178



527Due from subsidiaries


2,149



24,143Deferred expenses


991



Other current assets






211Investment in subsidiaries


119,251



621,267Total assets


122,569



646,148Warrant


2



Accrued expenses and other payables


626



2,894Due to subsidiaries






442Deferred revenue






2,222Series A redeemable convertible preferred shares


15,447



Series B redeemable convertible preferred shares


49,721



Series C redeemable convertible preferred shares


22,576



Total shareholders equity


34,197



640,590Total liabilities, redeemable convertible preferred shares and
    shareholders equity


122,569



646,148    F-40




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
   Condensed
    Statements of Operations
  FromMay 1,

Year2006 to

EndedDecember 31,

December 31,2006

2007General and administrative expenses






(3,293
)Interest income


4



2,139Interest expense and amortization of discount on exchangeable
    notes


(4,454
)


Decrease in fair value of warrant


9



2Loss before income tax and equity in earnings from subsidiary


(4,441
)


(1,152
)Equity in earnings from subsidiaries


34,623



145,211Net income


30,182



144,059Accretion of Series A redeemable convertible preferred
    shares to redemption value


(814
)


(860
)Accretion of Series B redeemable convertible preferred
    shares to redemption value


(1,799
)


(2,726
)Accretion of Series C redeemable convertible preferred
    shares to redemption value


(116
)


(1,351
)Deemed dividend to Series A redeemable convertible
    preferred shareholders


(1,568
)


Net income available to ordinary shareholders


25,885



139,122  F-41




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
  Condensed
    Statements of Cash Flows
  FromMay 1,

Year2006 to

EndedDecember 31,

December 31,2006

2007Cash flows from operating activitiesNet income


30,182



144,059Adjustments to reconcile net income to net cash used in
    operating activities:Interest on the exchangeable notes


13



Amortization of discount on exchangeable notes


4,440



Decrease in fair value of warrants


(9
)


(2
)Equity in earnings from subsidiaries


(34,623
)


(145,211
)Changes in operating assets/liabilities:Due from subsidiaries


(2,149
)


(21,994
)Due to subsidiaries






442Other assets/liabilities






4,996Net cash used in operating activities


(2,146
)


(17,710
)Cash flows from investing activitiesInvestment in subsidiaries


(82,600
)


(347,256
)Net cash used in investing activities


(82,600
)


(347,256
)Cash flows from financing activitiesProceeds from issuance of ordinary shares


10



369,489Payment of expenses relating to share offer


(405
)


(4,174
)Proceeds from issuance of exchangeable notes, net of issue cost
    US$52


7,948



Proceeds from
    Series A-2
    redeemable convertible preferred shares, net of issue cost US$51


6,949



Proceeds from Series B redeemable convertible preferred
    shares, net of issue cost US$78


47,922



Proceeds from Series C redeemable convertible preferred
    shares


22,500



Net cash provided by financing activities


84,924



365,315Net increase in cash and cash equivalents


178



349Cash and cash equivalents at beginning of period






178Cash and cash equivalents at end of period


178



527   (23)
    SUBSEQUENT
    EVENTS  (a)
    Acquisition   F-42




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE PERIOD FROM JULY 5, 2005 (date of inception) TO DECEMBER
    31, 2005
    AND THE YEARS ENDED DECEMBER 31, 2006 AND 2007 (Amounts
    in US$ thousands, except share and per share data)
    (b)
    Additional
    bank borrowings   F-43