However, analysts caution that trouble may still be lurking just below the surface for the wafer maker, given its crushing debt load, its increasing reliance on government handouts, its ongoing legal dispute with Q-Cells, and continuing delays in commissioning its new in-house polysilicon plant.

Yet the third quarter was an unqualified success for the Xinyu City-based company. LDK recorded sales of $281.9m – up 23% on the second quarter, and up 48% on third-quarter 2008.

It bagged a net profit of $29.4m, despite analysts having predicted that it would once again end up with a loss. LDK adds to a growing list of Chinese solar companies that have outperformed expectations in the third quarter, including Yingli Green Energy, SunTech, Trina Solar and JA Solar.

Like many solar firms, LDK, which once proudly touted itself as a pure-play wafer maker, is rushing to become more integrated as it looks for ways to slash production costs and add value.

The company is moving heavily into polysilicon manufacturing – though not fast enough for some investors. LDK is putting the finishing touches on a 1,000-tonne-capacity polysilicon plant, and is in the process of building another 15,000-tonne facility.

One of the biggest worries for LDK is its balance sheet, which includes $1.1bn in assets and $2.5bn in liabilities. As part of its plan to reduce its debt load, LDK recently sold 15% of the unfinished 15,000-tonne facility to Jiangxi International Trust for $219m.

Chief financial officer Jack Lai says LDK is in discussions to sell as much as 49% of the facility. “We are still looking at a number of alternatives, including private equity, maybe even a public offering, to see if we can raise more capital,” Lai says.

Some analysts have expressed concern about the slow pace at which LDK appears to be building out its polysilicon factories. The company says more than 90% of the equipment has already been installed at the 15,000-tonne facility, yet it will not be operational until late 2010.