China Industry: Aug. 13
Aug. 13 – This is a regular series of relevant industry news from around China.
Cathay Pacific Airways intends to start flying more often between Hong Kong and Australia, New Zealand, Canada, France and Japan from November. The company also intends to operate 11 flights a week to Paris by December. Tony Tyler, chief executive of the company, said that the carrier wants to boost its passenger capacity by approximately 4 percent.
China West Air has received its first Airbus A319 airplane, Datamonitor reported. The airline intends to use the aircraft on domestic services between Chongqing and Wenzhou and between Shijiazhuang and Yantai.
Cathay Pacific Airways said that the company and its subsidiary Dragonair carried a total of 2,485,244 passengers in July, up 19.5 percent on the same month in 2009. The passenger load factor was 87.5 percent, a rise of 4 percentage points, while capacity for the month, measured in available seat kilometers was up by 8.8 percent. For the first seven months of 2010, the number of passengers carried was up by 10.1 percent compared to an ASK rise of 1.1 percent.
The two airlines carried a total of 157,374 tons of cargo and mail last month, up 18.1 percent compared to July last year. The cargo and mail load factor was 76 percent, a rise of 3.4 percentage points, while capacity, measured in available cargo/mail ton kilometers, was up by 21.3 percent. For the year to date, tonnage has grown by 23.4 percent compared to a capacity increase of 9.2 percent.
South Korean low-cost airline Jeju Air said yesterday it will launch services to Hong Kong, Manila and Philippines’ Cebu by November 2010. The company obtained government approval to fly on these routes on July 2.
The air carrier added its target market in Hong Kong were young females traveling on business, while for the Philippines route it will rely on family travel.
Solar cells maker China Sunergy chalked up a 67.8 percent year-on-year rise in second-quarter revenue to US$117.6 million. Solar cells alone generated US$113 million, up 107.3 percent on the year.
Net income swelled to US$13.8 million between April and June 2010 from US$1.5 million in the year-ago period.
“We are confident these improvements will continue into the second half of 2010. Given increased industry-wide demand and higher utilization rates, we will be in an advantageous position for enhancing our bottom-line,” said chief executive Stephen Zhifang Cai.
Sunergy shipped around 87.3 megawatts of solar power products in the second quarter, representing a 110.4 percent year-on-year increase. Solar cell production amounted to 82.6 megawatts, up 140.1 percent.
For the third quarter, the company anticipates shipments in the range of 85 megawatts to 90 megawatts. For the full 2010, it expects to ship 320 megawatts to 350 megawatts of solar products.
Sunergy is the latest company to join the club of Chinese manufacturers booking impressive results. At the end of June, Chinese monocrystalline wafer maker Comtec Solar Systems Group Limited said its unaudited consolidated profit zoomed by no less than 1,200 percent in the first half of the year, reflecting reviving demand from module and cell manufacturers.
According to Chinese industry associations and government agencies, China’s 2009 photovoltaic market reached about 160 megawatts installed. For 2010, it could grow up to 600 megawatts installed in the policy-driven scenario. According to the national energy plan of 2009, China’s cumulative installed photovoltaic power is forecast to reach 20 gigawatts at least in 2020.
An analyst with Bloomberg New Energy Finance last month predicted that the Asian country could become the world’s top solar panels supplier, enhancing manufacturing capacity by 100 percent on the back of generous government funding.
Chinese solar manufacturer Suntech Power Holdings expects to slip into a net loss of US$147 million to US$179 million in the second quarter, according to preliminary figures. The Chinese company has discontinued production of thin-film panels at its Shanghai plant to focus on the manufacture of crystalline silicon solar cells. The switch is expected to trigger a thin-film equipment impairment charge of approximately US$50 million to US$55 million, the company said in a statement.
Suntech also anticipates charges of US$106 million to US$126 million related to its investment in PV company Shunda. Second-quarter revenue is seen in the range US$620 million and US$630 million.
The company is to release its official results on August 18. For the second quarter of 2010, Suntech booked a net profit of US$9.6 million. Revenue declined 34 percent year-on-year to US$321 million. The company rounded off first-quarter 2010 with a net profit of US$20.6 million, up from US$2 million a year earlier.
Luxembourg-registered CNPV Solar Power said it has raised US$10 million in a private placement of convertible notes and equity warrants. The company, operating through its wholly-owned Chinese unit CNPV Dongying Solar Power, a leading integrated manufacturer of solar photovoltaic products, will use the proceeds from the transaction for the purchase of manufacturing lines for silicon ingots, wafers, solar cells and solar modules, investments in research and development and other general corporate purposes.
The company notes will pay an annual interest of 20 percent and will mature on June 1, 2011 when they could be converted either into preference or common shares. If all notes are converted to common shares, the new shares will represent 29.66 percent of the total issued and outstanding common shares of the company.
Moreover, CNPV Solar Power issued to the purchasers of the convertible notes, warrants entitling them to subscribe for a total of 2,050,249 new common shares of the company at a price of US$4.85 per share, subject to certain adjustments.
Worldwide Energy and Manufacturing USA said it had opened a photovoltaic solar module production facility in Nantong, China. The 129,000 square feet facility will have an initial production capacity of 100 megawatts per year, but the site is large enough to accommodate two building extensions that would bring the total annual capacity to 300 megawatts, the company said.
The factory will initially employ 120 and Worldwide expects to increase its staff to reach 200 near the end of 2010. In addition to the manufacturing plant, the facility also houses an 11,000 square foot research center for the continued development of the company’s Amerisolar brand solar modules as well as complete photovoltaic solar energy systems.
Worldwide’s CEO Jimmy Wang said that the new facility will greatly increase the company’s solar manufacturing capacity and help it meet high demand for its high-quality solar modules. “We expect company ownership and lower operating costs at the new facility to improve margins for Worldwide,” he added without elaborating.
Swiss industrial engineering firm OC Oerlikon said its subsidiary Oerlikon Solar won a follow-up order from Chinese mono- and polycrystalline PV module provider Astronergy. The Chinese company will purchase thin-film equipment in order to expand its production capacity to 75 megawatts from 30 megawatts by the beginning of 2011. The expanded capacity will include new module materials and innovations in thin-film technology, OC Oerlikon said.
According to the Swiss firm, the announced deal is a part of Astronergy’s plan to expand its thin-film module capacity to 400 megawatts in the near future.
Chinese photovoltaic-maker ReneSola reported a net profit of US$36.1 million for the second quarter of 2010, soaring from US$11.8 million posted in the previous quarter. From April to June this year, the company earned US$ 253.9 million in revenues, compared with US$206.6 million sales in the first quarter of 2010. The record revenues were driven by higher wafer average selling prices and higher module shipments. The company shipped 258.3 megawatts of solar products during the reporting period, 15.9 megawatts more than in the previous quarter.
Operating income during the three-month period, ended June 30, 2010, amounted to US$52.5 million, up from US$21.2 million in the previous period this year. The company’s gross margin improved to 30.2 percent from 17.1 percent due to overall wafer processing cost reduction and a large decrease in polysilicon costs to market-equivalent prices during the reporting period.
“We achieved record results in terms of revenues, net income and shipment volumes in the second quarter of 2010”, ReneSola’s CEO Xianshou Li said. “Strong market demand coupled with our cost-efficient structure should place ReneSola in a position to increase profitability in the coming quarters”, he added.
Chinese photovoltaic products manufacturer LDK Solar reported a net profit of US$45 million for the second quarter of 2010, up from US$7.2 million posted for the previous quarter. For the same period last year, the company had a US$216.9 million net loss.
“During the second quarter, profitability improved significantly as we continued to tightly manage expenses and pricing stabilized. We experienced an increasing contribution from our in-house polysilicon production,” Xiaofeng Peng, chairman and CEO of LDK Solar, commented.
From April to June this year, LDK Solar earned US$565.3 million in revenues. The figure represents an increase of 62.7 percent sequentially and 147.6 percent year-on-year. The company shipped 510.5 megawatts of wafers and 73.9 megawatts of modules in the quarter.
During the three-month period, LDK Solar’s gross profit almost doubled to US$101.8 million from US$54.5 million in the first quarter of 2010. The company posted a gross loss of US$205.5 million a year earlier.
Gross margin for the second quarter of 2010 was 18 percent, compared to 15.7 percent in the previous quarter and negative 90 percent in the second quarter of 2009. “We were very pleased to exceed expectations for the second quarter which reflected the continued improvement in the operating environment for the solar industry and consistent execution by our team,” Peng stated.
Taiwan Semiconductor Manufacturing Company or TSMS has earmarked US$218 million for the construction of its first solar cell factory. Construction works are expected to start before the end of this year, a company representative said on Wednesday without elaborating further.
He said the investment would not change TSMC’s capital expenditure plan for this year, which the company set at US$5.8 billion for its chip division and US$100 million for new businesses, including solar.
This industry report brief is courtesy of Aii Data Processing.