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GCL-Poly profit comes in below expectations
By Richard Fu |
March 16, 2012, Friday
|
Online Edition
Online Edition
GCL-POLY Energy Holdings Ltd, China's largest polysilicon maker, reported a lower-than-expected 6.2 percent increase in annual profits.
Net profit rose to HK$4.27 billion (US$550 million), or HK$0.28 per share, from HK$4.02 billion in 2010, the Hong Kong-listed company reported late yesterday. That compared with Goldman Sachs' estimate of HK$0.33 per share.
Revenue jumped 38.1 percent to HK$25.5 billion in 2011.
Polysilicon is the raw material used to make solar cells. Subsidy cuts in debt-troubled Europe, the key market for solar products, and oversupply in China, the largest manufacturer, have depressed prices of polysilicon.
Still, GCL-Poly's cost reduction efforts in its polysilicon and wafer businesses were better than expected, Amy Song wrote in a note today. The company, which mainly produces products from its facilities in Xuzhou, Jiangsu Province, cut polysilicon production costs by 13 percent to US$18.6 a kilogram by the end of 2011.
"Ongoing solar trading negotiations between the US and China could also pose a risk to GCL, although we believe the company will have the ability to transfer some of its customer base to other regions, if necessary, eg, Taiwan and North America," Song said.
GCL-Poly now supplies polysilicon to solar companies such as China-based Suntech Power, Trina Solar and CSI.
Some American solar equipment makers have said Chinese competitors are dumping products in the US with unfair government subsidies and low-cost credits. China has denied this, billing the US accusations as trade protectionism. Last week, the US Commerce Department delayed a decision on antidumping duties for Chinese solar-cell imports.
Net profit rose to HK$4.27 billion (US$550 million), or HK$0.28 per share, from HK$4.02 billion in 2010, the Hong Kong-listed company reported late yesterday. That compared with Goldman Sachs' estimate of HK$0.33 per share.
Revenue jumped 38.1 percent to HK$25.5 billion in 2011.
Polysilicon is the raw material used to make solar cells. Subsidy cuts in debt-troubled Europe, the key market for solar products, and oversupply in China, the largest manufacturer, have depressed prices of polysilicon.
Still, GCL-Poly's cost reduction efforts in its polysilicon and wafer businesses were better than expected, Amy Song wrote in a note today. The company, which mainly produces products from its facilities in Xuzhou, Jiangsu Province, cut polysilicon production costs by 13 percent to US$18.6 a kilogram by the end of 2011.
"Ongoing solar trading negotiations between the US and China could also pose a risk to GCL, although we believe the company will have the ability to transfer some of its customer base to other regions, if necessary, eg, Taiwan and North America," Song said.
GCL-Poly now supplies polysilicon to solar companies such as China-based Suntech Power, Trina Solar and CSI.
Some American solar equipment makers have said Chinese competitors are dumping products in the US with unfair government subsidies and low-cost credits. China has denied this, billing the US accusations as trade protectionism. Last week, the US Commerce Department delayed a decision on antidumping duties for Chinese solar-cell imports.
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