26 November 2008
Yingli Green Energy has signed a binding letter of intent with Grand Avenue Group to buy all the shares of Cyber Power Group and its subsidiary Fine Silicon Co., a development-stage solar-grade polysilicon company based in Baoding, Hebei, China.
The proposed acquisition will enable the company to have a secure and stable supply of poly independent of market conditions, according to Yingli. The move would also allow the company to further vertically integrate its manufacturing processes and improve its margins.
Under the terms of the letter, Yingli will buy Cyber Power (a company controlled by some of Yingli's affiliated entities) for an aggregate consideration of $70 million to $80 million, with $25 million payable in advance.
Definitive agreements with respect to the proposed acquisition are subject to further negotiation and certain conditions, including completion of due diligence, receipt of satisfactory financing, and the approval by the audit committee and the company's board of directors, according to Yingli.
Yingli's CFO Bryan Li said during the company's third-quarter conference call that the Fine Silicon polysilicon manufacturing facility in Baoding (which is already under construction) should commence production in the second half of 2009, with an initial annual capacity in the range of 300-350 metric tons.
The company, which shipped 80 MW of PV modules and posted net revenues of $325.5 million and net income of $22.2 million in the third quarter, also has multiple medium- and long-term polysilicon supply contracts with DC Chemical, Wacker Chemie, and Sailing New Energy.
Thursday, November 27, 2008
Yingli Green Energy Reports Third Quarter 2008 Results
Wednesday, November 26, 2008
-- Q3 2008 Net Revenues Increased 73.1% over Q3 2007 and 11.2% over Q2 2008
-- Company Reaffirms Business Outlook for Full Year 2008
-- Company Also Announces Proposed Acquisition of Affiliated Polysilicon Company
BAODING, China, Nov. 26 /PRNewswire-Asia-FirstCall/ -- Yingli Green Energy Holding Company Limited (NYSE: YGE) ('Yingli Green Energy' or the 'Company'), one of the world's leading vertically integrated photovoltaic ('PV') product manufacturers, today announced its unaudited consolidated financial results for the third quarter ended September 30, 2008.
Third Quarter 2008 Consolidated Financial and Operating Highlights
-- PV module shipments totaled 80.0 MW.
-- Net revenues were RMB 2,209.8 million (US$325.5 million).
-- Gross profit was RMB 492.6 million (US$72.6 million) and gross margin was 22.3%.
-- Operating income was RMB 377.1 million (US$55.5 million) and operating margin was 17.1%.
-- Net income was RMB 150.8 million (US$22.2 million) and diluted earnings per ordinary share and per American depositary share ('ADS') were RMB 1.17 (US$0.17).
-- On an adjusted non-GAAP(1) basis, net income was RMB 175.3 million (US$25.8 million) and diluted earnings per ordinary share and per ADS were RMB 1.35 (US$0.20).
(1) All non-GAAP measures exclude share-based compensation and amortization of intangible assets arising from purchase price allocation in connection with a series of acquisitions of equity
interest in Baoding Tianwei Yingli New Energy Resources Co., Ltd. ('Tianwei Yingli'), the Company's principal operating subsidiary. For further details on non-GAAP measures, please refer to the reconciliation table and a detailed discussion of the Company's use of non-GAAP information set forth elsewhere in this earnings release.
'The Company's business operations continued to be strong during the third quarter of 2008,' commented Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy. 'Net revenues continued to grow with increased PV module shipments and output, which benefited from our broad customer base and well-recognized brand name. The total shipments for the first three quarters of 2008 were on track, accounting for 75.1% to 72.4% of our shipment guidance of 270 MW to 280 MW for 2008. Looking forward, we believe Germany will remain a major growth driver of the global PV market while the PV market in the United States has gained additional visibility with the extension of the Investment Tax Credit in early October 2008. In addition to these two markets, we plan to further expand our sales in emerging PV markets including South Korea, Italy, France, Belgium and China. We believe our existing position and continued efforts in these markets will help us improve our brand recognition globally and further solidify our well-balanced geographical and customer sales portfolio. To date, the Company has signed sales contracts for delivery of approximately 120 MW of PV modules in 2009. In addition, we are in negotiations with customers for another 350 MW which we expect to finalize by the end of 2008 or early 2009.'
'Recently, we kicked off a series of initiatives to enhance our marketing strategies with a focus on improving product quality and solidifying our customer base. For example, as previously announced, we are collaborating with Deutsche Bank to offer our customers 'one-stop shop' solar project financing solutions. We also formed a strategic partnership with TUV Rheinland (Shanghai) Co., Ltd. to improve quality control and employee training. At the end of October, we successfully hosted the Yingli Green Energy 2008 Global Customer Conference, which more than 260 executives of our global customers, equipment suppliers, certification institutes, banks and government agencies from 15 countries and regions attended. We believe these initiatives will further strengthen our corporate image as a leading global PV manufacturer,' Mr. Miao continued.
'We also expanded our total annual production capacity to 400 MW in each of polysilicon ingots and wafers, PV cells and PV modules in September. We expect to further expand our total manufacturing capacity to 600 MW in the third quarter of 2009 while maintaining adequate working capital to support our operations with current cash, expected cash flow from operations and available lines of credit. In this regard, our long-term credit facilities with DEG, FMO and PROPARCO have not only strengthened our ability to expand our vertically integrated manufacturing capacity but also enhanced our debt structure by enabling us to shift to longer-term debt financing of our capital expenditures.'
'On the polysilicon procurement side, we have secured sufficient polysilicon to meet our estimated production requirements for 2008. Meanwhile, in light of the recent decrease in the price of polysilicon, we have been renegotiating contracted pricing terms with our suppliers for a portion of the polysilicon delivery for the rest of 2008 and for 2009. Furthermore, five mid- to long-term virgin polysilicon supply agreements with leading global polysilicon suppliers will start delivery at the beginning of 2009 and are expected to allow us to produce more than 230 MW of PV modules in 2009. We believe these agreements will significantly reduce our blended polysilicon cost and support our efforts to improve product quality.'
'Moreover, we believe that economies of scale enhanced by the successful ramp-up to 400 MW of production capacity, together with higher yield rates, advanced equipment and technologies and our ongoing research and development initiatives, will further strengthen our position as a leading PV product manufacturer with one of the lowest non-polysilicon manufacturing cost structures in the industry. With our increased operational scale and efficiency and a stable long-term customer base, we believe we are well- positioned for the challenges and opportunities ahead in this difficult macro- economic environment,' Mr. Miao added.
Third Quarter 2008 Financial Results
Net Revenues
Net revenues were RMB 2,209.8 million (US$325.5 million) in the third quarter of 2008, an increase of 11.2% from RMB 1,987.0 million in the second quarter of 2008 and 73.1% from RMB 1,276.5 million in the third quarter of 2007. The increase was primarily due to increased shipment volume as a result of continued strong demand for PV modules supported by increased production output, partially offset by lower average selling price. The average selling price for PV modules(2) in the third quarter of 2008 was US$4.04 per watt, a decrease of 3.8% from US$4.20 per watt in the second quarter of 2008. This decrease was primarily due to the depreciation of the Euro against the Renminbi in the third quarter of 2008 as a majority of the Company's PV module shipments were under contracts denominated in Euros. Total PV module shipments increased 17.3% to 80.0 MW in the third quarter of 2008 from 68.2 MW in the second quarter of 2008. The increase of shipments was supported by the installation and trial production of an additional 200 MW of annual manufacturing capacity of each of PV polysilicon ingots and wafers, PV cells and PV modules in September, as well as improvements in operational efficiency and capacity utilization at each stage of the Company's manufacturing process.
(2) We compute average selling price of PV modules per watt for a given period as the total sales of PV modules divided by the total watts of the PV modules sold during such period, and translated into U.S. dollars at the noon buying rate at the end of such period as certified for customs purpose by the Federal Reserve Bank of New York.
Gross Profit and Gross Margin
Gross profit in the third quarter of 2008 was RMB 492.6 million (US$72.6 million), a decrease of 3.7% from RMB 511.8 million in the second quarter of 2008 and an increase of 62.7% from RMB 302.9 million in the third quarter of 2007. Gross margin was 22.3% in the third quarter of 2008, down from 25.8% in the second quarter of 2008 and 23.7% in the third quarter of 2007. The decrease in gross margin was primarily due to the decrease in the average selling price caused by the depreciation of the Euro against the Renminbi in the third quarter of 2008. The unit cost level remained stable in the third quarter of 2008 despite higher polysilicon costs, as both polysilicon usage per watt and non-polysilicon costs were reduced through research and development efforts at each stage of the Company's vertically integrated manufacturing process.
Operating Expenses
Operating expenses in the third quarter of 2008 were RMB 115.5 million (US$17.0 million), compared to RMB 116.1 million in the second quarter of 2008 and RMB 78.8 million in the third quarter of 2007. Operating expenses as a percentage of net revenues decreased to 5.2% in the third quarter of 2008 from 5.8% in the second quarter of 2008 and 6.2% in the third quarter of 2007. The decrease in operating expenses as a percentage of net revenues was primarily due to economies of scale and better control of sales and marketing related expenses, partially offset by higher research and development expenses.
Operating Income and Margin
Operating income in the third quarter of 2008 was RMB 377.1 million (US$55.5 million), a decrease of 4.7% from RMB 395.7 million in the second quarter of 2008 and an increase of 68.3% from RMB 224.0 million in the third quarter of 2007. Operating margin decreased to 17.1% in the third quarter of 2008 from 19.9% in the second quarter of 2008 and 17.6% in the third quarter of 2007.
Foreign Currency Exchange Loss (Gain)
Foreign currency exchange loss was RMB 133.1 million (US$19.6 million) in the third quarter of 2008, compared to a foreign currency exchange loss of RMB 68.2 million in the second quarter of 2008 and a foreign currency exchange gain of RMB 14.0 million in the third quarter of 2007. The foreign currency exchange loss in the third quarter of 2008 was primarily due to the depreciation of the Euro against the Renminbi in the quarter.
-- Q3 2008 Net Revenues Increased 73.1% over Q3 2007 and 11.2% over Q2 2008
-- Company Reaffirms Business Outlook for Full Year 2008
-- Company Also Announces Proposed Acquisition of Affiliated Polysilicon Company
BAODING, China, Nov. 26 /PRNewswire-Asia-FirstCall/ -- Yingli Green Energy Holding Company Limited (NYSE: YGE) ('Yingli Green Energy' or the 'Company'), one of the world's leading vertically integrated photovoltaic ('PV') product manufacturers, today announced its unaudited consolidated financial results for the third quarter ended September 30, 2008.
Third Quarter 2008 Consolidated Financial and Operating Highlights
-- PV module shipments totaled 80.0 MW.
-- Net revenues were RMB 2,209.8 million (US$325.5 million).
-- Gross profit was RMB 492.6 million (US$72.6 million) and gross margin was 22.3%.
-- Operating income was RMB 377.1 million (US$55.5 million) and operating margin was 17.1%.
-- Net income was RMB 150.8 million (US$22.2 million) and diluted earnings per ordinary share and per American depositary share ('ADS') were RMB 1.17 (US$0.17).
-- On an adjusted non-GAAP(1) basis, net income was RMB 175.3 million (US$25.8 million) and diluted earnings per ordinary share and per ADS were RMB 1.35 (US$0.20).
(1) All non-GAAP measures exclude share-based compensation and amortization of intangible assets arising from purchase price allocation in connection with a series of acquisitions of equity
interest in Baoding Tianwei Yingli New Energy Resources Co., Ltd. ('Tianwei Yingli'), the Company's principal operating subsidiary. For further details on non-GAAP measures, please refer to the reconciliation table and a detailed discussion of the Company's use of non-GAAP information set forth elsewhere in this earnings release.
'The Company's business operations continued to be strong during the third quarter of 2008,' commented Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy. 'Net revenues continued to grow with increased PV module shipments and output, which benefited from our broad customer base and well-recognized brand name. The total shipments for the first three quarters of 2008 were on track, accounting for 75.1% to 72.4% of our shipment guidance of 270 MW to 280 MW for 2008. Looking forward, we believe Germany will remain a major growth driver of the global PV market while the PV market in the United States has gained additional visibility with the extension of the Investment Tax Credit in early October 2008. In addition to these two markets, we plan to further expand our sales in emerging PV markets including South Korea, Italy, France, Belgium and China. We believe our existing position and continued efforts in these markets will help us improve our brand recognition globally and further solidify our well-balanced geographical and customer sales portfolio. To date, the Company has signed sales contracts for delivery of approximately 120 MW of PV modules in 2009. In addition, we are in negotiations with customers for another 350 MW which we expect to finalize by the end of 2008 or early 2009.'
'Recently, we kicked off a series of initiatives to enhance our marketing strategies with a focus on improving product quality and solidifying our customer base. For example, as previously announced, we are collaborating with Deutsche Bank to offer our customers 'one-stop shop' solar project financing solutions. We also formed a strategic partnership with TUV Rheinland (Shanghai) Co., Ltd. to improve quality control and employee training. At the end of October, we successfully hosted the Yingli Green Energy 2008 Global Customer Conference, which more than 260 executives of our global customers, equipment suppliers, certification institutes, banks and government agencies from 15 countries and regions attended. We believe these initiatives will further strengthen our corporate image as a leading global PV manufacturer,' Mr. Miao continued.
'We also expanded our total annual production capacity to 400 MW in each of polysilicon ingots and wafers, PV cells and PV modules in September. We expect to further expand our total manufacturing capacity to 600 MW in the third quarter of 2009 while maintaining adequate working capital to support our operations with current cash, expected cash flow from operations and available lines of credit. In this regard, our long-term credit facilities with DEG, FMO and PROPARCO have not only strengthened our ability to expand our vertically integrated manufacturing capacity but also enhanced our debt structure by enabling us to shift to longer-term debt financing of our capital expenditures.'
'On the polysilicon procurement side, we have secured sufficient polysilicon to meet our estimated production requirements for 2008. Meanwhile, in light of the recent decrease in the price of polysilicon, we have been renegotiating contracted pricing terms with our suppliers for a portion of the polysilicon delivery for the rest of 2008 and for 2009. Furthermore, five mid- to long-term virgin polysilicon supply agreements with leading global polysilicon suppliers will start delivery at the beginning of 2009 and are expected to allow us to produce more than 230 MW of PV modules in 2009. We believe these agreements will significantly reduce our blended polysilicon cost and support our efforts to improve product quality.'
'Moreover, we believe that economies of scale enhanced by the successful ramp-up to 400 MW of production capacity, together with higher yield rates, advanced equipment and technologies and our ongoing research and development initiatives, will further strengthen our position as a leading PV product manufacturer with one of the lowest non-polysilicon manufacturing cost structures in the industry. With our increased operational scale and efficiency and a stable long-term customer base, we believe we are well- positioned for the challenges and opportunities ahead in this difficult macro- economic environment,' Mr. Miao added.
Third Quarter 2008 Financial Results
Net Revenues
Net revenues were RMB 2,209.8 million (US$325.5 million) in the third quarter of 2008, an increase of 11.2% from RMB 1,987.0 million in the second quarter of 2008 and 73.1% from RMB 1,276.5 million in the third quarter of 2007. The increase was primarily due to increased shipment volume as a result of continued strong demand for PV modules supported by increased production output, partially offset by lower average selling price. The average selling price for PV modules(2) in the third quarter of 2008 was US$4.04 per watt, a decrease of 3.8% from US$4.20 per watt in the second quarter of 2008. This decrease was primarily due to the depreciation of the Euro against the Renminbi in the third quarter of 2008 as a majority of the Company's PV module shipments were under contracts denominated in Euros. Total PV module shipments increased 17.3% to 80.0 MW in the third quarter of 2008 from 68.2 MW in the second quarter of 2008. The increase of shipments was supported by the installation and trial production of an additional 200 MW of annual manufacturing capacity of each of PV polysilicon ingots and wafers, PV cells and PV modules in September, as well as improvements in operational efficiency and capacity utilization at each stage of the Company's manufacturing process.
(2) We compute average selling price of PV modules per watt for a given period as the total sales of PV modules divided by the total watts of the PV modules sold during such period, and translated into U.S. dollars at the noon buying rate at the end of such period as certified for customs purpose by the Federal Reserve Bank of New York.
Gross Profit and Gross Margin
Gross profit in the third quarter of 2008 was RMB 492.6 million (US$72.6 million), a decrease of 3.7% from RMB 511.8 million in the second quarter of 2008 and an increase of 62.7% from RMB 302.9 million in the third quarter of 2007. Gross margin was 22.3% in the third quarter of 2008, down from 25.8% in the second quarter of 2008 and 23.7% in the third quarter of 2007. The decrease in gross margin was primarily due to the decrease in the average selling price caused by the depreciation of the Euro against the Renminbi in the third quarter of 2008. The unit cost level remained stable in the third quarter of 2008 despite higher polysilicon costs, as both polysilicon usage per watt and non-polysilicon costs were reduced through research and development efforts at each stage of the Company's vertically integrated manufacturing process.
Operating Expenses
Operating expenses in the third quarter of 2008 were RMB 115.5 million (US$17.0 million), compared to RMB 116.1 million in the second quarter of 2008 and RMB 78.8 million in the third quarter of 2007. Operating expenses as a percentage of net revenues decreased to 5.2% in the third quarter of 2008 from 5.8% in the second quarter of 2008 and 6.2% in the third quarter of 2007. The decrease in operating expenses as a percentage of net revenues was primarily due to economies of scale and better control of sales and marketing related expenses, partially offset by higher research and development expenses.
Operating Income and Margin
Operating income in the third quarter of 2008 was RMB 377.1 million (US$55.5 million), a decrease of 4.7% from RMB 395.7 million in the second quarter of 2008 and an increase of 68.3% from RMB 224.0 million in the third quarter of 2007. Operating margin decreased to 17.1% in the third quarter of 2008 from 19.9% in the second quarter of 2008 and 17.6% in the third quarter of 2007.
Foreign Currency Exchange Loss (Gain)
Foreign currency exchange loss was RMB 133.1 million (US$19.6 million) in the third quarter of 2008, compared to a foreign currency exchange loss of RMB 68.2 million in the second quarter of 2008 and a foreign currency exchange gain of RMB 14.0 million in the third quarter of 2007. The foreign currency exchange loss in the third quarter of 2008 was primarily due to the depreciation of the Euro against the Renminbi in the quarter.
Linde Signs 3 Thin Film Contracts, Captures over 50% of Market in China
Nov 26, 2008
The Linde Group's local subsidiary, Linde LienHwa, has signed contracts with Tianwei Baoding, Hangzhou Amplesun Solar and ENN Solar in China. These three new multi-million US dollar contracts are believed by the company to enable it to capture more than 50% of the thin film photovoltaic (PV) market in China.
As part of these long-term contracts, The Linde Group will be providing ongoing delivery of bulk and specialty gases essential to making thin film solar cells-- including large volumes of silane and hydrogen gas, used to deposit silicon light absorbing layers on large-area sheets of glass used in solar panels.The first phase of the ENN Solar plant in Langfang will start commercial production by Q2 of 2009, with a capacity of 60MW, and possible future expansion up to 0.5GW.
Baoding Tianwei Solarfilms is working with Linde to future-proof its gas installation and supply chain. Tianwei's new thin film solar production facility in Baoding, worth over Rmb1.2 billion (about US$180 million), will go online in the first quarter of 2009.
Hangzhou Amplesun Solar Technology Co Ltd is a privately invested high-tech company devoted to next-generation "green" power with a current investment of Rmb2.2 billion (about US$320 million). Jin Qing Guo, CEO of Amplesun Solar said: "Linde has been facilitating our needs on specialty gases as well as on-site services, which will greatly speed up our capacity scale-up in the production of thin film solar modules."
The Linde Group's local subsidiary, Linde LienHwa, has signed contracts with Tianwei Baoding, Hangzhou Amplesun Solar and ENN Solar in China. These three new multi-million US dollar contracts are believed by the company to enable it to capture more than 50% of the thin film photovoltaic (PV) market in China.
As part of these long-term contracts, The Linde Group will be providing ongoing delivery of bulk and specialty gases essential to making thin film solar cells-- including large volumes of silane and hydrogen gas, used to deposit silicon light absorbing layers on large-area sheets of glass used in solar panels.The first phase of the ENN Solar plant in Langfang will start commercial production by Q2 of 2009, with a capacity of 60MW, and possible future expansion up to 0.5GW.
Baoding Tianwei Solarfilms is working with Linde to future-proof its gas installation and supply chain. Tianwei's new thin film solar production facility in Baoding, worth over Rmb1.2 billion (about US$180 million), will go online in the first quarter of 2009.
Hangzhou Amplesun Solar Technology Co Ltd is a privately invested high-tech company devoted to next-generation "green" power with a current investment of Rmb2.2 billion (about US$320 million). Jin Qing Guo, CEO of Amplesun Solar said: "Linde has been facilitating our needs on specialty gases as well as on-site services, which will greatly speed up our capacity scale-up in the production of thin film solar modules."
Wednesday, November 26, 2008
China offers 800 million RMB subsidy to nuclear power and wind power equipment manufacturers
2008 November 24th Huang Li, a deputy-director in energy saving at the National Energy Administration disclosed that the central government has decided to offer 800 million yuan ($11.76 million) by the end of this year to subsidize China's nuclear power and wind power equipment manufacturers.
The improvement is part of the government's 100 billion yuan additional fiscal package, which should be spent by the end of this quarter, to prevent an excessive economic slowdown.
"The subsidy is mainly targeted at key technology for national nuclear power and wind turbine producers, and about 10% manufacturers will get the subsidy", said Huang expected the move could promote localization of the technology for nuclear and wind power generation.
The improvement is part of the government's 100 billion yuan additional fiscal package, which should be spent by the end of this quarter, to prevent an excessive economic slowdown.
"The subsidy is mainly targeted at key technology for national nuclear power and wind turbine producers, and about 10% manufacturers will get the subsidy", said Huang expected the move could promote localization of the technology for nuclear and wind power generation.
China Sunergy Announces Financial Results for the Third Quarter 2008
Reports Third Quarter Revenues of US$119.0 million, an Increase of 142.9% Year-Over-Year; Solar Cell Production and Gross Margin are both within Guidance at 35.7.MW and 9.3% respectively
NANJING, China, Nov 25, 2008 /PRNewswire-Asia via COMTEX/ -- China Sunergy Co., Ltd. , ("China Sunergy" or the "Company") a specialized solar cell manufacturer based in Nanjing, China, announced today its financial results for the third quarter of 2008.
Third Quarter Financial Results
-- Revenues were US$119.0 million, representing a 142.9% and 6.6% increase compared to the third quarter of 2007 and the second quarter of 2008, respectively; revenues generated from solar cell sales were US$113.4 million, representing a 144.9% and 8.6% increase compared to the third quarter of 2007 and the second quarter of 2008, respectively.
-- Gross profit was US$11.1 million compared to US$1.0 million and US$11.6 million during the third quarter of 2007 and the second quarter of 2008, respectively. Gross margin was 9.3%, which was within the Company's guidance range, compared to 2.1% and 10.4% during the third quarter of 2007 and the second quarter of 2008, respectively. Blended gross margin was impacted mainly by the reduced OEM volume, compared to previous quarter.
-- GAAP net income was US$0.2 million, compared to net loss of US$4.4 million and net income of US$3.1 million in the third quarter of 2007 and the second quarter of 2008, respectively. Lower GAAP net income was largely due to non-operational accounting measures.
-- Non-GAAP net income, which excludes share-based compensation and change in fair value of non-cash derivative loss, was US$2.0 million, compared to non-GAAP net loss of US$4.3 million and non-GAAP net income of US$4.0 million in the third quarter of 2007 and the second quarter of 2008, respectively. The non-GAAP measures are described below and reconciled to the corresponding GAAP measure in the section below titled "Use of Non-GAAP Financial Measures."
-- GAAP net income per ADS was US$0.01 both on basic and diluted basis, compared to a net loss of US$0.11 and a net income of US$0.08 per ADS in the third quarter of 2007 and the second quarter of 2008, respectively.
-- Non-GAAP net income per ADS, which excludes share-based compensation and change in fair value of non-cash derivative loss, was US$0.05 both on basic and diluted basis, compared to a non-GAAP net loss of US$0.10 and a non-GAAP net income of US$0.10 per ADS in the third quarter of 2007 and the second quarter of 2008, respectively.
-- Operating cash flow in this quarter was positive US$1.8 million.
Commenting on the financial results, Dr. Allen Wang, CEO of China Sunergy, said: "Despite experiencing a deteriorating market environment towards the end of the quarter, which resulted in some canceled orders, I am pleased that we were able to achieve our guidance for the quarter regarding margins and production volume. We have maintained our focus on execution through the signing of an important sales agreement and procuring high-quality silicon supplies at flexible and favorable prices, which will benefit the long term health of our Company despite the short-term impact of operating within an extremely challenging and uncertain solar sector."
Third Quarter and Recent Operational Highlights
-- Quarterly production of 35.7 megawatts ("MW") of solar cells represented a 100.6% increase on a year-over-year basis and an 8.8% increase sequentially.
-- Shipments of solar power products amounted to approximately 34.1 MW, representing a 105.4% increase on a year-over-year basis and a 2.6% decrease sequentially. Shipments were impacted by several orders which were canceled in late September due to market conditions, which would have amounted to 4.3 MW.
-- Shipments of high efficiency cells (defined as any cells with a conversion efficiency rate of over 17%) during the third quarter of 2008 amounted to 11.1MW, or 34.0% of total solar cell shipments, slightly less than the 11.4 MW, or 36.8% of total solar cell shipments, during the second quarter of 2008.
-- Average selective emitter (SE) cell conversion efficiency was 17.2% in the third quarter of 2008. Cells produced on the HP lines achieved an average conversion efficiency rate of approximately 16.7%.
-- The Company entered into a seven year sales agreement with Wuxi Guofei Green Energy Source Co., Ltd. ("Wuxi Guofei"), a leading Chinese solar energy company. Under the greement, China Sunergy will supply Wuxi Guofei with 10 MW of monocrystalline cells each year, beginning in 2009 and concluding in 2015.
"Although we were only moderately affected by the market situation towards the end of the third quarter, we have experienced much more severe pressure on our operations in recent months particularly in October as ASP erosion has been rapid," continued Dr. Wang. "While this will significantly impact our results in the coming quarter and hence the full year, we have already implemented critical adjustments to minimize the long-term effect of the current environment and ensure that as the solar sector regains equilibrium we will be poised to regain the momentum that we demonstrated over the past quarters."
Technological Developments
During the quarter China Sunergy continued to make progress with the production and development of its high-efficiency cells. China Sunergy currently has one SE line and four HP lines available for operation, and has maintained one multi-crystalline P type line to cater to current client requirements.
The installation of the four new selective emitter ("SE") cell production lines is scheduled to be completed by the end of November, which will bring the total number of SE lines in production to five from the beginning of 2009. It should be noted that given any specific quality of wafer the SE cells not only generally achieve higher conversion efficiencies than our P and HP-type cells, but they also display greater wafer quality tolerance and are therefore able to achieve this even when poorer quality wafers are used during production.
China Sunergy's investment in more advanced cells has again resulted in impressive returns with regards to the development of new forms of high efficiency cells. In particular, significant breakthrough has been achieved in the advancement of the N-type cells. At the laboratory level, an average efficiency of over 19% was consistently achieved, and the Company has put up a plan to start commercial shipments late in the fourth quarter of 2009. Additionally, the planned R&D center in Shanghai remains scheduled to be completed during the first half of 2009.
Third Quarter 2008 Financial and Business Review
Revenues, Shipment and Production
During the third quarter of 2008, revenues increased 142.9% on a year- over-year basis, and 6.6% sequentially to US$119.0 million.
Sales from solar cells, modules and processed cells under OEM arrangements and other sales accounted for 95.3%, 4.2%, 0.2% and 0.3% of total revenues, respectively. Shipments, including 1.2MW for module sales and 0.3MW of solar cells processed under OEM arrangements, amounted to approximately 34.1 MW, compared to 16.6 MW during the third quarter of 2007 and 35.0 MW during the second quarter of 2008.
Revenues and Shipment Comparison between Q3 2008 and Q2 2008
Q3 2008 Q2 2008
Volume* Value (US$mm) Volume* Value (US$mm)
Solar cell sales 32.6 113.4 31.0 104.4
Module sales 1.2 5.0 1.0 4.2
OEM 0.3 0.2 3.0 2.2
Other sales 0.4 0.8
* All volumes are expressed in MW.
During the third quarter of 2008, the Company increased its quarter-on- quarter sales of solar cell products by 8.6% as compared to the previous quarter. The percentage of solar cell sales in overseas markets of total solar cell sales was 45.1% in the third quarter of 2008 compared to 48.3% and 39.5% in the third quarter of 2007 and the second quarter of 2008, respectively.
Of the 32.6 MW of solar cells shipped during the third quarter, 11.1 MW were in the form of high efficiency cells (defined as any cells with a conversion efficiency rate of 17% and above.)
Gross Profit, Gross Margins and Average Selling Price ("ASP")
Gross profit for the quarter was US$11.1 million, which led to a blended gross margin of 9.3%, down from 10.4% in the previous quarter, mainly as a result of less OEM volume. The gross margin of solar cells was largely the same as the previous quarter.
Margin Breakdown
Gross margin
Q3 2008 Q2 2008
Solar cell sales 9.1% 9.2%
Module sales 6.8% 12.4%
OEM 68.8% 63.2%
Other sales 68.1% 19.9%
Blended 9.3% 10.4%
Blended ASP for the third quarter of 2008 rose from US$3.37 per watt in the previous quarter to US$3.48 per watt due in part to the strengthening of the Renminbi against U.S. dollar. The blended ASP for the third quarter of 2007 was US$2.85.
Wafer Costs
Wafer costs continued to account for a large proportion of overall manufacturing costs. In the third quarter of 2008, wafer costs rose to US$2.87 per watt compared to US$2.45 and US$2.79 per watt in the third quarter of 2007 and the second quarter of 2008, mainly due to the strengthening of the Renminbi against U.S. dollar and the price increase of wafer.
Wafer costs per watt as a percentage of total production costs per watt declined slightly from 91.2% in the second quarter of 2008 to 91.1% in the third quarter of 2008, mainly due to the increased production volume. Other production costs, which mainly consisted of other raw materials, labor, depreciation and utilities, were US$0.28 per watt compared to US$0.27 in the second quarter of 2008.
SG&A, Operating Profit and Net Income
Our SG&A expenses in the third quarter of 2008 were US$4.9 million, compared to US$4.2 million in the third quarter of 2007 and US$5.1 million sequentially, which included share based compensation charge US$0.9 million, US$0.1 million, and US$0.9 million, respectively.
Profit from operations was US$5.7 million, compared to an operating loss of US$3.6 million and an operating profit of US$6.0 million for the third quarter of 2007 and the second quarter of 2008, respectively.
Interest expense for the third quarter 2008 was US$2.1 million, compared to US$2.0 million for the third quarter of 2007 and US$1.7 million for the second quarter of 2008, respectively. The increase was attributable to amortization of expenses and interest charges related to the senior convertible bonds closed on July 1, 2008.
In the third quarter we had other expenses amounting to US$3.7 million, mainly from unrealized foreign currency exchange loss due to devaluation of the Euro against Renminbi.
The Company reported a decline in net income to US$0.2 million this quarter, largely due to exchange and foreign currency derivative loss. This compares to a net income of US$3.1 million in the previous quarter and a net loss of US$4.4 million in the third quarter of 2007.
Non-GAAP net income, which excludes share-based compensation and change in fair value of non-cash derivative loss, was US$2.0 million in the third quarter of 2008, compared to net loss of US$4.3 million and net income of US$4.0 million in the third quarter of 2007 and the second quarter of 2008, respectively (please refer to note 1 of reconciliation).
The non-GAAP measures are described below and reconciled to the corresponding GAAP measures in the section below titled "Use of Non-GAAP Financial Measures."
Balance Sheet and Cash Flow
As of September 30, 2008, the Company had cash and cash equivalents of US$122.1 million. Net operating cash inflow for the third quarter was US$1.8 million. The Company also has access to an untapped bank credit facility of US$70M as at the end of September, and at this point sees no issues in its ability to renew existing bank loans or to obtain new lines of credit, should they be necessary.
Inventory was at a similar level compared to the second quarter, and the Company's working capital ratio improved from 178% in the second quarter to 212% in the third quarter. Depreciation and amortization were US$1.4 million and capital expenditures were US$8.7 million.
Capital expenditures in Q3 were payments made for equipment relating to the expansion of the Company's selective emitter cell lines. The outstanding payment for the 4 SE lines is US$12M and the budget for the R&D Center in Shanghai is US$8M. These two items have been accounted for. The only new capex requirement is approximately US$8M for the conversion of one SE line to N-type. The Company sees no issues in generating this funding internally out of its 2009 profits.
On July 1, 2008, the Company issued US$54.5 million 4.75% senior convertible notes (including US$4,500,000 pursuant to the exercise of the over-allotment option in full) due June 15, 2013 ("the Notes"). The terms of the Notes include certain conversion, repurchase and conversion rate adjustment features. The Notes are convertible into shares of the Company's stock. Total issuance costs of the senior convertible notes were approximately US$3.9 million.
Concurrent with this offering, 4,431,000 ADSs were borrowed by an affiliate of the initial purchaser of the notes pursuant to an ADS lending agreement, and offered in a transaction registered under the Securities Act. A nominal lending fee of US$0.0006 per ADS was received from the ADS borrower for the use of the borrowed ADSs.
Commenting on the financial results, Kenneth Luk, CFO of China Sunergy, said: "Despite the financial pressure caused by the depreciation of the Euro, we achieved the lower end of our margin guidance and generated cash during the third quarter. We have sufficient capital to fund our operations during this uncertain time and throughout 2009. While the outlook for the fourth quarter is certainly not ideal and we will face challenging results, China Sunergy will take the necessary steps to limit the financial impact and ensure we have the resources necessary to benefit from the anticipated long-term demand for our advanced solar products."
Outlook
The recent global economic environment will have a much more significant impact on the Company's fourth quarter and full year results than was experienced during the third quarter. The rapid decline in the ASP for solar cells during October was not immediately matched with a reduction in the upstream costs, largely polysilicon, resulting in negative gross margins and a conscious reduction in production of solar cells. Despite the recent cost corrections, the short term lack of demand for solar products has led to reduced shipments and revenues and therefore a reduced opportunity to compensate for the weak beginning to the quarter.
Taking into account the reduced ASP and relatively higher cost of polysilicon, the Company believes it will report a negative gross margin for the fourth quarter. The Company actively reduced production during the beginning of the quarter, leading to production volume in the range of 15-20MW. This results in the Company reducing its full year 2008 production target to 107-112MW, out of which around 44MW are expected to be high efficiency products.
China Sunergy observed that starting in early November the price of polysilicon began to erode, and at this time has now fallen by an even greater extent than the recent ASP decline. Given the current opportunity for flexible procurement of polysilicon and recently observed pricing trends, the Company has seen gross margins return to a level similar to the second quarter of 2008. In addition, going forward there will be incidental margin improvement due to a more favorable production mix and higher wafer quality from overseas suppliers.
By the first quarter of 2009, all 4 new selective emitter production lines will be operating, bringing the total number of selective emitter lines to 5. While production may not run at the full capacity in Q1, the Company will focus production on those lines until their production capacity is fulfilled, thus targeting to generate a higher average gross margin.
For 2009, the Company, although prudently optimistic, would like to be conservative at this point of time and revise down the production target to 180-210MW including 20% from OEM business. It is important to note that this target is based on the Company's existing commitments and ongoing negotiations with customers while the market is more volatile than usual. Our gross margin should be positively, instead of negatively, impacted based on the recent trend of declining ASP and wafer costs. Taking into consideration the effect of a better production mix of 50% SE cells as well as better wafer quality, China Sunergy expects a gross margin of 15-19% for 2009.
Additional Company Updates
During the annual general meeting of shareholders held in Nanjing on August 15, 2008, the Company adopted several shareholder resolutions, including the re-elections of Mr. Tingxiu Lu, Mr. Ruennsheng Allen Wang and Ms. Jian Li as directors of the Company, the ratification of the appointment of the Independent Auditor Deloitte Touche Tohmatsu for the fiscal year 2007 and appointment of the Independent Auditor Deloitte Touche Tohmatsu for the fiscal year 2008.
NANJING, China, Nov 25, 2008 /PRNewswire-Asia via COMTEX/ -- China Sunergy Co., Ltd. , ("China Sunergy" or the "Company") a specialized solar cell manufacturer based in Nanjing, China, announced today its financial results for the third quarter of 2008.
Third Quarter Financial Results
-- Revenues were US$119.0 million, representing a 142.9% and 6.6% increase compared to the third quarter of 2007 and the second quarter of 2008, respectively; revenues generated from solar cell sales were US$113.4 million, representing a 144.9% and 8.6% increase compared to the third quarter of 2007 and the second quarter of 2008, respectively.
-- Gross profit was US$11.1 million compared to US$1.0 million and US$11.6 million during the third quarter of 2007 and the second quarter of 2008, respectively. Gross margin was 9.3%, which was within the Company's guidance range, compared to 2.1% and 10.4% during the third quarter of 2007 and the second quarter of 2008, respectively. Blended gross margin was impacted mainly by the reduced OEM volume, compared to previous quarter.
-- GAAP net income was US$0.2 million, compared to net loss of US$4.4 million and net income of US$3.1 million in the third quarter of 2007 and the second quarter of 2008, respectively. Lower GAAP net income was largely due to non-operational accounting measures.
-- Non-GAAP net income, which excludes share-based compensation and change in fair value of non-cash derivative loss, was US$2.0 million, compared to non-GAAP net loss of US$4.3 million and non-GAAP net income of US$4.0 million in the third quarter of 2007 and the second quarter of 2008, respectively. The non-GAAP measures are described below and reconciled to the corresponding GAAP measure in the section below titled "Use of Non-GAAP Financial Measures."
-- GAAP net income per ADS was US$0.01 both on basic and diluted basis, compared to a net loss of US$0.11 and a net income of US$0.08 per ADS in the third quarter of 2007 and the second quarter of 2008, respectively.
-- Non-GAAP net income per ADS, which excludes share-based compensation and change in fair value of non-cash derivative loss, was US$0.05 both on basic and diluted basis, compared to a non-GAAP net loss of US$0.10 and a non-GAAP net income of US$0.10 per ADS in the third quarter of 2007 and the second quarter of 2008, respectively.
-- Operating cash flow in this quarter was positive US$1.8 million.
Commenting on the financial results, Dr. Allen Wang, CEO of China Sunergy, said: "Despite experiencing a deteriorating market environment towards the end of the quarter, which resulted in some canceled orders, I am pleased that we were able to achieve our guidance for the quarter regarding margins and production volume. We have maintained our focus on execution through the signing of an important sales agreement and procuring high-quality silicon supplies at flexible and favorable prices, which will benefit the long term health of our Company despite the short-term impact of operating within an extremely challenging and uncertain solar sector."
Third Quarter and Recent Operational Highlights
-- Quarterly production of 35.7 megawatts ("MW") of solar cells represented a 100.6% increase on a year-over-year basis and an 8.8% increase sequentially.
-- Shipments of solar power products amounted to approximately 34.1 MW, representing a 105.4% increase on a year-over-year basis and a 2.6% decrease sequentially. Shipments were impacted by several orders which were canceled in late September due to market conditions, which would have amounted to 4.3 MW.
-- Shipments of high efficiency cells (defined as any cells with a conversion efficiency rate of over 17%) during the third quarter of 2008 amounted to 11.1MW, or 34.0% of total solar cell shipments, slightly less than the 11.4 MW, or 36.8% of total solar cell shipments, during the second quarter of 2008.
-- Average selective emitter (SE) cell conversion efficiency was 17.2% in the third quarter of 2008. Cells produced on the HP lines achieved an average conversion efficiency rate of approximately 16.7%.
-- The Company entered into a seven year sales agreement with Wuxi Guofei Green Energy Source Co., Ltd. ("Wuxi Guofei"), a leading Chinese solar energy company. Under the greement, China Sunergy will supply Wuxi Guofei with 10 MW of monocrystalline cells each year, beginning in 2009 and concluding in 2015.
"Although we were only moderately affected by the market situation towards the end of the third quarter, we have experienced much more severe pressure on our operations in recent months particularly in October as ASP erosion has been rapid," continued Dr. Wang. "While this will significantly impact our results in the coming quarter and hence the full year, we have already implemented critical adjustments to minimize the long-term effect of the current environment and ensure that as the solar sector regains equilibrium we will be poised to regain the momentum that we demonstrated over the past quarters."
Technological Developments
During the quarter China Sunergy continued to make progress with the production and development of its high-efficiency cells. China Sunergy currently has one SE line and four HP lines available for operation, and has maintained one multi-crystalline P type line to cater to current client requirements.
The installation of the four new selective emitter ("SE") cell production lines is scheduled to be completed by the end of November, which will bring the total number of SE lines in production to five from the beginning of 2009. It should be noted that given any specific quality of wafer the SE cells not only generally achieve higher conversion efficiencies than our P and HP-type cells, but they also display greater wafer quality tolerance and are therefore able to achieve this even when poorer quality wafers are used during production.
China Sunergy's investment in more advanced cells has again resulted in impressive returns with regards to the development of new forms of high efficiency cells. In particular, significant breakthrough has been achieved in the advancement of the N-type cells. At the laboratory level, an average efficiency of over 19% was consistently achieved, and the Company has put up a plan to start commercial shipments late in the fourth quarter of 2009. Additionally, the planned R&D center in Shanghai remains scheduled to be completed during the first half of 2009.
Third Quarter 2008 Financial and Business Review
Revenues, Shipment and Production
During the third quarter of 2008, revenues increased 142.9% on a year- over-year basis, and 6.6% sequentially to US$119.0 million.
Sales from solar cells, modules and processed cells under OEM arrangements and other sales accounted for 95.3%, 4.2%, 0.2% and 0.3% of total revenues, respectively. Shipments, including 1.2MW for module sales and 0.3MW of solar cells processed under OEM arrangements, amounted to approximately 34.1 MW, compared to 16.6 MW during the third quarter of 2007 and 35.0 MW during the second quarter of 2008.
Revenues and Shipment Comparison between Q3 2008 and Q2 2008
Q3 2008 Q2 2008
Volume* Value (US$mm) Volume* Value (US$mm)
Solar cell sales 32.6 113.4 31.0 104.4
Module sales 1.2 5.0 1.0 4.2
OEM 0.3 0.2 3.0 2.2
Other sales 0.4 0.8
* All volumes are expressed in MW.
During the third quarter of 2008, the Company increased its quarter-on- quarter sales of solar cell products by 8.6% as compared to the previous quarter. The percentage of solar cell sales in overseas markets of total solar cell sales was 45.1% in the third quarter of 2008 compared to 48.3% and 39.5% in the third quarter of 2007 and the second quarter of 2008, respectively.
Of the 32.6 MW of solar cells shipped during the third quarter, 11.1 MW were in the form of high efficiency cells (defined as any cells with a conversion efficiency rate of 17% and above.)
Gross Profit, Gross Margins and Average Selling Price ("ASP")
Gross profit for the quarter was US$11.1 million, which led to a blended gross margin of 9.3%, down from 10.4% in the previous quarter, mainly as a result of less OEM volume. The gross margin of solar cells was largely the same as the previous quarter.
Margin Breakdown
Gross margin
Q3 2008 Q2 2008
Solar cell sales 9.1% 9.2%
Module sales 6.8% 12.4%
OEM 68.8% 63.2%
Other sales 68.1% 19.9%
Blended 9.3% 10.4%
Blended ASP for the third quarter of 2008 rose from US$3.37 per watt in the previous quarter to US$3.48 per watt due in part to the strengthening of the Renminbi against U.S. dollar. The blended ASP for the third quarter of 2007 was US$2.85.
Wafer Costs
Wafer costs continued to account for a large proportion of overall manufacturing costs. In the third quarter of 2008, wafer costs rose to US$2.87 per watt compared to US$2.45 and US$2.79 per watt in the third quarter of 2007 and the second quarter of 2008, mainly due to the strengthening of the Renminbi against U.S. dollar and the price increase of wafer.
Wafer costs per watt as a percentage of total production costs per watt declined slightly from 91.2% in the second quarter of 2008 to 91.1% in the third quarter of 2008, mainly due to the increased production volume. Other production costs, which mainly consisted of other raw materials, labor, depreciation and utilities, were US$0.28 per watt compared to US$0.27 in the second quarter of 2008.
SG&A, Operating Profit and Net Income
Our SG&A expenses in the third quarter of 2008 were US$4.9 million, compared to US$4.2 million in the third quarter of 2007 and US$5.1 million sequentially, which included share based compensation charge US$0.9 million, US$0.1 million, and US$0.9 million, respectively.
Profit from operations was US$5.7 million, compared to an operating loss of US$3.6 million and an operating profit of US$6.0 million for the third quarter of 2007 and the second quarter of 2008, respectively.
Interest expense for the third quarter 2008 was US$2.1 million, compared to US$2.0 million for the third quarter of 2007 and US$1.7 million for the second quarter of 2008, respectively. The increase was attributable to amortization of expenses and interest charges related to the senior convertible bonds closed on July 1, 2008.
In the third quarter we had other expenses amounting to US$3.7 million, mainly from unrealized foreign currency exchange loss due to devaluation of the Euro against Renminbi.
The Company reported a decline in net income to US$0.2 million this quarter, largely due to exchange and foreign currency derivative loss. This compares to a net income of US$3.1 million in the previous quarter and a net loss of US$4.4 million in the third quarter of 2007.
Non-GAAP net income, which excludes share-based compensation and change in fair value of non-cash derivative loss, was US$2.0 million in the third quarter of 2008, compared to net loss of US$4.3 million and net income of US$4.0 million in the third quarter of 2007 and the second quarter of 2008, respectively (please refer to note 1 of reconciliation).
The non-GAAP measures are described below and reconciled to the corresponding GAAP measures in the section below titled "Use of Non-GAAP Financial Measures."
Balance Sheet and Cash Flow
As of September 30, 2008, the Company had cash and cash equivalents of US$122.1 million. Net operating cash inflow for the third quarter was US$1.8 million. The Company also has access to an untapped bank credit facility of US$70M as at the end of September, and at this point sees no issues in its ability to renew existing bank loans or to obtain new lines of credit, should they be necessary.
Inventory was at a similar level compared to the second quarter, and the Company's working capital ratio improved from 178% in the second quarter to 212% in the third quarter. Depreciation and amortization were US$1.4 million and capital expenditures were US$8.7 million.
Capital expenditures in Q3 were payments made for equipment relating to the expansion of the Company's selective emitter cell lines. The outstanding payment for the 4 SE lines is US$12M and the budget for the R&D Center in Shanghai is US$8M. These two items have been accounted for. The only new capex requirement is approximately US$8M for the conversion of one SE line to N-type. The Company sees no issues in generating this funding internally out of its 2009 profits.
On July 1, 2008, the Company issued US$54.5 million 4.75% senior convertible notes (including US$4,500,000 pursuant to the exercise of the over-allotment option in full) due June 15, 2013 ("the Notes"). The terms of the Notes include certain conversion, repurchase and conversion rate adjustment features. The Notes are convertible into shares of the Company's stock. Total issuance costs of the senior convertible notes were approximately US$3.9 million.
Concurrent with this offering, 4,431,000 ADSs were borrowed by an affiliate of the initial purchaser of the notes pursuant to an ADS lending agreement, and offered in a transaction registered under the Securities Act. A nominal lending fee of US$0.0006 per ADS was received from the ADS borrower for the use of the borrowed ADSs.
Commenting on the financial results, Kenneth Luk, CFO of China Sunergy, said: "Despite the financial pressure caused by the depreciation of the Euro, we achieved the lower end of our margin guidance and generated cash during the third quarter. We have sufficient capital to fund our operations during this uncertain time and throughout 2009. While the outlook for the fourth quarter is certainly not ideal and we will face challenging results, China Sunergy will take the necessary steps to limit the financial impact and ensure we have the resources necessary to benefit from the anticipated long-term demand for our advanced solar products."
Outlook
The recent global economic environment will have a much more significant impact on the Company's fourth quarter and full year results than was experienced during the third quarter. The rapid decline in the ASP for solar cells during October was not immediately matched with a reduction in the upstream costs, largely polysilicon, resulting in negative gross margins and a conscious reduction in production of solar cells. Despite the recent cost corrections, the short term lack of demand for solar products has led to reduced shipments and revenues and therefore a reduced opportunity to compensate for the weak beginning to the quarter.
Taking into account the reduced ASP and relatively higher cost of polysilicon, the Company believes it will report a negative gross margin for the fourth quarter. The Company actively reduced production during the beginning of the quarter, leading to production volume in the range of 15-20MW. This results in the Company reducing its full year 2008 production target to 107-112MW, out of which around 44MW are expected to be high efficiency products.
China Sunergy observed that starting in early November the price of polysilicon began to erode, and at this time has now fallen by an even greater extent than the recent ASP decline. Given the current opportunity for flexible procurement of polysilicon and recently observed pricing trends, the Company has seen gross margins return to a level similar to the second quarter of 2008. In addition, going forward there will be incidental margin improvement due to a more favorable production mix and higher wafer quality from overseas suppliers.
By the first quarter of 2009, all 4 new selective emitter production lines will be operating, bringing the total number of selective emitter lines to 5. While production may not run at the full capacity in Q1, the Company will focus production on those lines until their production capacity is fulfilled, thus targeting to generate a higher average gross margin.
For 2009, the Company, although prudently optimistic, would like to be conservative at this point of time and revise down the production target to 180-210MW including 20% from OEM business. It is important to note that this target is based on the Company's existing commitments and ongoing negotiations with customers while the market is more volatile than usual. Our gross margin should be positively, instead of negatively, impacted based on the recent trend of declining ASP and wafer costs. Taking into consideration the effect of a better production mix of 50% SE cells as well as better wafer quality, China Sunergy expects a gross margin of 15-19% for 2009.
Additional Company Updates
During the annual general meeting of shareholders held in Nanjing on August 15, 2008, the Company adopted several shareholder resolutions, including the re-elections of Mr. Tingxiu Lu, Mr. Ruennsheng Allen Wang and Ms. Jian Li as directors of the Company, the ratification of the appointment of the Independent Auditor Deloitte Touche Tohmatsu for the fiscal year 2007 and appointment of the Independent Auditor Deloitte Touche Tohmatsu for the fiscal year 2008.
Subscribe to:
Posts (Atom)
