Chinese solar makers see return of profits


Mon, Sep 02, 2013 - Page 13

China’s top solar-panel makers are returning to profitability following two years of losses, after surging Asian demand drove up margins in the second quarter.

Yingli Green Energy Holding Co (英利綠色能源), the largest panel company, reported gross margin of 11.8 percent in the second quarter, up from 4.6 percent a year earlier, according to a statement on Friday.

JinkoSolar Holding Co (晶科能源) already is profitable after its margins doubled to 17.7 percent. Trina Solar Ltd’s (天合光能) gross margin rose to 11.6 percent and the company expects to be profitable in the fourth quarter.

The panel makers are benefiting from increasing demand in China and Japan, which are set to become the top two markets this year. They are turning out panels at top speed and shipping at record levels, in contrast to the past two years when a global glut drove down prices, eating into margins and profits.

The second-quarter results mark “the turning point for the PV module industry and a return to profitability,” IHS Inc analyst Stefan de Haan, said in an e-mail. “‘The positive Q2 announcements from several PV manufacturers did not come as a big surprise given the accelerated growth they have been seeing in markets such as Japan, China and the US, coupled with stabilizing pricing.’’

Asian demand is driving the turnaround. China and Japan may each deploy more than 9 gigawatts of photovoltaic panels. Global installations may reach a record 37 gigawatts this year, up more than 20 percent from last year, according to Bloomberg New Energy Finance.

That is boosting factory utilization rates and driving up prices. Baoding, China-based Yingli expects margins as high as 15 percent in the fourth quarter and it may ship as much as 3.3 gigawatts of panels this year. That will exceed its total annual production capacity, which will be about 2.4 gigawatts by the end of this year, according to a conference call on Friday.

Trina, based in Changzhou, China, said on Aug. 20 it expects to ship as much as 2.4 gigawatts of panels this year, exactly matching its annual production capacity. Shanghai-based Jinko’s factories are about 90 percent full now, and the company boosted its capacity to 1.5 gigawatts a year.