Green Energy Technology Inc (綠能科技), the nation’s biggest solar wafer maker, is to raise its prices by 3 percent this month as recovering demand has reversed a previous oversupply.
Demand for solar wafers is bouncing back as more countries in Asia and other regions, such as Australia, have launched new greenhouse gas emission control packages that include subsidies for solar panel installation, Green Energy president Lin Hur-lon (林和龍) told reporters last week.
“More countries, China in particular, are starting to take a serious look at cutting carbon dioxide emissions, though no substantial agreement was made during the Copenhagen meetings,” Lin said.
Customers, primarily solar module makers, were also finding it easier to obtain bank loans, thanks to the improving financial climate in the US and Europe, Lin said.
“These are some of the positive factors supporting our optimism about the solar energy business,” Lin said. “We now have clear order visibility to the end of the month.”
Customers are rigorously placing orders, despite concerns the German government will cut this year’s energy repurchase rate from solar farms, Lin said.
Broad optimism on the solar business, shown in messages from customers, has caused supply constraints as a recent surge of orders has exceeded Green Energy’s capacity by 40 percent, Lin said.
With the increased bargaining chip, Green Energy is increasing prices by 3 percent a month, beginning this month, he said.
As a result, revenues and gross margin would be higher compared with the fourth quarter, Lin said. Green Energy has not yet released its fourth-quarter earnings.
Green Energy is expected to post higher quarterly earnings of NT$112 million, or NT$0.86 a share, in the fourth quarter of last year, up from NT$106 million, or NT$0.81 per share, in the third quarter, a Citigroup report dated Thursday said.
The solar wafer maker swung back into the black in the third quarter of last year, from losses of NT$160 million in the second quarter. Gross margin improved to 8.77 percent in the third quarter, from minus 12.13 percent the previous quarter.
Citigroup has a “buy” rating on Green Energy along with other local companies in the solar industry because of improving cost efficiency and further market expansion.
The brokerage set a 12-month target price of NT$95 on Green Energy, implying a 23 percent upside from the stock’s closing price of NT$77.50 on Friday.
To catch up with demand, Green Energy plans to accelerate its capacity expansion this year. It planned to more than double its annual solar wafer capacity from last year’s 360 megawatts.
Next quarter, annual capacity would increase to 500 megawatts, the company said.
Green Energy also plans to expand its wafer slicing capacity to 500 megawatts a year in the second quarter, from 300 megawatts last year.
The company has also signed a memorandum of understanding with MPI Corp (旺矽) to farm out its wafer slicing business, aiming to expand its market share and to enhance competitiveness, Green Energy said in a statement submitted to the Taiwan Stock Exchange on Jan. 21.
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