With the demand for solar cells surging in the wake of soaring oil prices, photovoltaic (PV) cell makers have become one of the hottest traded stocks on the local bourse. Analyst view on the sector's prospects vary, however, with Gintech Energy Corp (
The solar cell sector has enjoyed a compounded annual growth rate of approximately 30 percent in recent years on the back of strong demand supported by government subsidies and incentives, Citigroup Global Markets said in a client note on Wednesday.
But many of the local PV cell makers have also seen growing margin pressure in recent quarters owing to a shortfall of key raw materials and pressure from rising polysilicon prices, the note said.
PHOTO: TSENG HUI-WEN, TAIPEI TIMES
Even so, Gintech is likely to outperform its local peers and expand its output by 270 percent to 220 megawatts this year from a year earlier thanks to stable supplies, Citigroup analyst George Chang (
Chang said Gintech, aided by its robust growth, would close the gap with market leader Motech to become the nation's second-largest and possibly one of the world's top five suppliers by the end of next year.
Motech is the nation's largest and the world's fourth-biggest solar cell maker.
The analyst recommended a 12-month target price of NT$300 for Gintech. He expected earnings per share to soar 250 percent year-on-year to NT$15 this year.
Gintech closed limit-up at NT$196 on Wednesday. The stock market was closed yesterday because of a public holiday.
In addition to ample material supply from MEMC Electronic Materials Inc, Chang said Gintech offers diversified business model, strong earnings prospects and attractive valuations compared with its global peers.
While Chang also has a buy rating on Motech, he reduced his price target for the stock to NT$250, from NT$400, citing tight material supply as the company's long-term contracts will not start until the second half of the year.
Motech's earnings per share are likely to rise 14 percent to NT$13.9 this year from last year, he said.
Motech shares closed up 3.6 percent at NT$200 on Wednesday.
Taiwan Ratings Corp (
In a report issued on Tuesday, Taiwan Ratings said many domestic companies had rushed to join this emerging industry, with some aggressively expanding their capacities between 2005 and last year.
But "success has not come without a price," it said.
"The industry boom has led to severe shortages of key raw materials and bottlenecks in supply chains have in turn created high financial and business risks for solar cell companies," Taiwan Ratings credit analyst Raymond Hsu (
Hsu said many Taiwanese companies had ventured into the solar business given the low entry barrier in terms of capital and technology.
However, this has given rise to a highly fragmented domestic industry, compared with that of other countries, he said.
Consequently, "competition is intensifying with little product differentiation among companies," coupled with the deterioration of operating margins as companies are "unable to fully pass on higher raw material costs to customers owing to concerns about increasing competition."
On top of that, the lack of ability to secure stable supplies of silicon wafers has also forced Taiwanese companies to enter into long-term fixed price contracts with their suppliers, making these companies' financial performance vulnerable to fluctuations in solar cell and silicon wafer prices in the medium term, he said.
"Credit risks are likely to remain high over the next two to three years despite sunny growth prospects for domestic solar cell makers," Hsu said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”