Gintech Energy Corp (昱晶), the nation’s second-biggest solar-cell maker, expects to withstand the NT dollar’s gains because of rising demand for renewable energy.
The NT dollar may appreciate 4.7 percent to NT$30 against its US counterpart by the first quarter next year, the median of 17 analyst forecasts compiled by Bloomberg showed.
“Gintech will be OK,” Andrew Shih (石同福), deputy director in the company’s financial division, said in an interview.
Gintech could withstand that level for the Taiwanese currency, Shih said. He described it as a “worst-case scenario” that would be prompted by China allowing its yuan to gain by between 3 percent and 5 percent this year.
Global demand for solar power is boosting sales for Gintech and competitor Motech Industries Inc (茂迪), helping the companies weather NT dollar appreciation that reduces the value of overseas earnings in local-currency terms. More than 90 percent of Gintech sales are from exports.
The NT dollar has climbed about 2 percent against its US counterpart this year, partly because of speculation China will allow its currency to advance, spurring fund inflows to Asia. It traded at NT$31.398 at 4pm yesterday, Taipei Forex Inc data showed.
China is Taiwan’s biggest export market.
Gintech posted net income of NT$1.04 billion (U$33.1 million) in the first quarter, on sales of NT$5.59 billion, the company said in a stock exchange filing on April 14, citing unaudited figures.
The solar-cell maker reported a loss of NT$360 million a year earlier.
Shipments by the Miaoli-based company may double this year from 368 megawatts last year, Shih said on Wednesday.
The recovery in the global economy is boosting funding for solar power projects, helping lift Gintech’s sales, he said.
“We have orders exceeding our capacity,” he said.
The company aims to boost its annual production capacity to more than 900 megawatts this year, from 720 megawatts, he said. One megawatt is enough to power 800 US homes.
Gintech may raise US$200 million through borrowing or equities this year to help fund the expansion, Shih said, without giving details.
Shares of Gintech have risen 4.7 percent in Taipei trading this year, outperforming the 2.6 percent decline on the benchmark TAIEX index and the 19 percent drop of Motech shares.
To help mitigate the effects of gains in the NT dollar, Gintech may consider measures such as taking out loans in US dollars and sales of currency forwards, Shih said.
Forwards are agreements to buy and sell assets at current prices for future delivery.
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