China Industry Report: March 21

Posted by Reading Time: 7 minutes

Mar. 21 – This is a regular series of relevant industry news from around China.

Marine transport and shipbuilding
• Finnish handling-systems provider Cargotec Oyj has won an order exceeding US$ 27.7 million to supply equipment for eight general cargo vessels that will be built in China.

The order covers delivery of fully electrically driven MacGregor cargo handling cranes as well as design and key components for hatch covers, Cargotec said on March 9.

The ships, with a capacity of 31,000 dead-weight tons each, are due for delivery in 2013. They will be built by Zhejiang Ouhua Shipbuilding Co Ltd for UK-based shipping company China Navigation Co Ltd. The deal also includes an option for equipment for another eight ships.

• Chinese ship owner and oil tanker operator Sinotrans Shipping said on March 10 its net profit rose 19.9 percent year-on-year to US$127.5 million in 2010, fuelled mainly by growth in dry bulk shipping.

Operating profit climbed 34.1 percent to US$116.4 million on the back of a 21.6 percent revenue rise to US$278.5 million, the company added. Revenue from dry bulk vessel chartering jumped by 24 percent to US$258.4 million in 2010. Container ship charters brought US$20.3 million, up 2.4 percent. Freight from oil tanker services increased 23.4 percent to US$12.7 million.

Sinotrans Shipping received last year seven dry bulk vessels with an additional capacity of about 810,000 deadweight tons. The company also ordered four Panamax dry bulk vessels and sold one.

As at December 31, 2010, the firm’s fleet comprised 46 vessels with an aggregate capacity of 2.66 million deadweight tons, and a total of seven new buildings of about 700,000 deadweight tons, which are scheduled to be delivered to Sinotrans Shipping between 2011 and 2012.

• Hong Kong-based river transport firm Chu Kong Shipping Development Co said March 16 its profit attributable to equity holders rose 18 percent on the year to US$17.6 million in 2010.

Earnings were driven up by the recovery in international trade and inflows from its newly-acquired passenger transport business.

Consolidated revenue improved 20.3 percent year-on-year to US$142 million in the period. Revenue from cargo transportation rose from US$86.8 million to US$104.4 million. Cargo handling and storage brought US$22.7 million, up from US$17.5 million booked in 2009. Revenue from passenger transportation stood at US$14.8 million in 2010 versus US$13.7 million a year earlier.

• China Shipping Development Company Limited, or CSDC, said earlier this month its profit attributable to equity holders rose 61.2 percent on the year to US$261.2 million in 2010.

Revenue improved 29.3 percent year-on-yesr to US$1.72 billion. Oil shipment account for some US$926 million of the revenue, compared with US$744 million in 2009. Dry bulk shipment grew to US$789 million from US$546 million.

• Ferry operator Hong Kong Ferry (Holdings) Company Ltd saw its profit in the ferry and shipyard segment for 2010 grow to US$1.3 million from US$385,000, the company said last Tuesday.

The firm’s revenues in the maritime segment dropped to US$18 million in 2010 from US$20.18 million.

The company’s consolidated revenue plunged to US$116.86 million from US$274 million registered in 2009 as inflow from the company’s property development segment registered a sharp drop to US$69.51 million in 2010 versus US$231 million posted in 2009.

Hong Kong Ferry’s consolidated profit after taxes for the year to December 31, 2010 fell 56 percent on an annual basis to US$61.91 million.

Solar power
• U.S.-based thin-film solar cell technology firm Xsunx on March 14 said it has agreed to sell its GICSolar solar cell production systems and operating license for the technology to Globe Future Technology Development Co.

Under the deal, Xsunx will initially deliver a baseline manufacturing system and later a 30 megawatt CIGSolar production system.

Following the agreement, the two companies will collaborate to set a specification on the CIGSolar system.

The CIGSolar technology produces copper indium gallium selenide thin-film solar cells using manufacturing processes from the hard disk drive industry as an alternative to silicon wafer solar cells.

• U.S. clean energy technology company Power-One last Monday said it started shipments from its new inverter manufacturing plant in China.

The plant is expected to reach an output capacity of 1 gigawatt of central inverters by the end of 2011. It is located in the same manufacturing park in Shenzhen as the company’s existing facility for power conversion products.

Power-One launched its 250 kilowatt and 500 kilowatt utility-grade central inverters designed for the Asian market late last year. The company said it has received China Quality Certificate for sales to the Chinese market and would manufacture central inverters for the Indian market as well.

• Chinese solar power firm Linuo Group will postpone deliveries of solar products to Japan as transport has been interrupted in the quake-hit areas, Xinhua News Agency writes, citing a company official in charge of exports to Japan.

According to Xinhua, exports to Japan from China’s eastern province of Shandong have been seriously affected by traffic disruptions and communication failures. Both marine traffic and land transport in Japan are experiencing difficulties after the recent earthquake.

Deliveries of Linuo products will also be delayed as a solar photovoltaic project close to the quake-damaged Fukushima nuclear plant will be put on hold. Still, the company expects exports to rise significantly once the after-quake reconstruction is completed, the Linuo Group official said.

• Chinese solar product maker JinkoSolar said last week it has become a member of PV Cycle, a Brussels-based organization promoting the take-back and recycling of end-of-life photovoltaic modules. PV Cycle’s aim is to create a network of solar module collection points by 2015.

End-of-life modules will be separated into crystalline and thin-film modules and taken to a PV Cycle recycling center where they will be sorted by product number and maker and then weighed before being disassembled into their main components and recycled. The recycling program is financed by member firms of the initiative.

• Chinese solar power equipment-maker Apollo Solar Energy Technology Holdings said on March 17 that it returned to the black in 2010, according to preliminary calculations. The company concluded 2009 with a net loss of US$16 million.

Apollo Solar did not provide further details on its 2010 results, saying it will publish its full-year report on March 25.

• Hong Kong-based silicon wafer-maker GCL-Poly Energy Holdings Ltd swung to a 2010 net profit of US$515 million from a net loss of US$25.6 million a year ago.

Gross profit jumped by 356.9 percent year-on-year to US$893 million, the company said in a statement on Thursday. The gross profit margin was 36.9 percent.

Revenue for the year surged 274 percent in annual terms to US$2.367 billion thanks to a rise in revenues from the company’s solar business, which contributed US$1.8 billion to the total figure.

In 2010, GCL-Poly bolstered polysilicon capacity to 21,000 tons from 18,000 tons, while wafer capacity reached 3.5 gigawatts. During the year, the company produced nearly 17,900 tons of polysilicon, up 140 percent on the year, and 1.4 gigawatts of wafers.

• After returning to the black in 2010, Chinese solar products-maker Hanwha SolarOne said it expects module shipments in 2011 to stand at 1 gigawatt to 1.2 gigawatts.

Capital expenditures for the year are projected at US$450 million.

Module shipments for the first quarter of the year are expected at 235 megawatt to 245 megawatt. Average selling prices excluding photovoltaic module processing services are seen to fall by some 5 percent on the fourth quarter of 2010.

Hanwha SolarOne reported a GAAP net profit of US$56.4 million for the closing quarter of 2010, up from US$1.61 million a year earlier. The non-GAAP result was US$20.43 million, up 40.4 percent on the year.

The gross margin for the quarter was 20.3 percent, an increase from 18.8 percent a year ago. Still, the margin declined in quarter-on-quarter terms due to higher raw material costs. In the third quarter of 2010, the gross margin stood at 22.7 percent.

ASPs excluding module processing services went down 11.2 percent on the year to US$1.79 per watt.

Fourth-quarter revenue rose 68.7 percent in annual terms to US$320 million, while photovoltaic module shipments jumped 97.5 percent to 218.8 megawatts. Both results are lower than projected, as a 4.1-megawatt order got cancelled after the company’s preliminary estimate from February.

For the full year 2010, Hanwha SolarOne turned to a GAAP net profit of US$114.98 million from a loss of US$22 million in 2009. Non-GAAP profit was US$121.18 million, against a non-GAAP loss of US$3 million.

Revenue for the year nearly doubled to US$1.14 billion from US$574 million, while photovoltaic module shipments rose 154.6 percent to 797.9 megawatts.

• South Korean polysilicon producer OCI Co Ltd said on Thursday it secured two polysilicon orders worth US$569.2 million and US$281 million, respectively, from solar companies from China and Taiwan.

The first contract was struck with Chinese photovoltaic products-maker Trina Solar, while the smaller order came from Taiwanese solar cell manufacturer Motech Industries Inc.

Earlier this month, Taiwanese solar-grade ingot and wafer-maker Danen Technology Corp awarded OCI a seven-year, US$161 million polysilicon purchase deal.

Wind power
• China Longyuan Power Group Corporation Limited said on earlier this month that according to preliminary data its consolidated power output for February stood at 1.75 million MWh, up 18.8 percent from February 2010.

Wind power generation rose by 43.8 percent year-on-year to 1.04 million MWh. Other renewables output jumped by 37.5 percent to 9,255 MWh. Coal power generation during the period dropped by 5.62 percent to 701,526 MWh.

• Chinese wind turbines major Sinovel Wind Group said it will apply for credit lines for a total of US$502 million from three Chinese banks. The firm will seek loans from Bank of Dalian, Shanghai Pudong Development Bank and Bank of Hangzhou.

• Wind farm-operator China Longyuan Power Group Co Ltd said last week its net profit for 2010 surged by 125.8 percent year-on-year to US$307.4 million. Pretax profit rose by 65.2 percent to US$487 million.

Full-year revenue stood at US$2.15 billion, up 45.9 percent in annual terms. Sales of the company’s wind power division went up to US$921 million from US$553 million in 2009.

China Longyuan Power’s output for 2010 reached 21,553 million kWh. Wind power generation amounted to 10,094 million kWh, an increase of 62.5 percent on the year.

At the end of December, the company had 8,473 megawatts of installed capacity. Wind power accounted for 6,556 megawatts of the total figure.

• Chinese wind turbine-maker Xinjiang Goldwind Science and Technology opened a unit in South Africa last Monday to manage its operations in the African market.

The new office will supply wind turbines and provide maintenance services, environmental services and project financing. The company also plans to launch local production in future.

Goldwind said the move was in line with its strategy for global expansion.

• China Datang Corporation Renewable Power Co Ltd saw its 2010 net profit rise by 83.5 percent year-on-year to US$69.3 million, exceeding by 12.4 percent earlier forecasts.

Operating profit was US$228 million, an increase of 74.8 percent due to steady business growth during 2010.

Revenue for the year surged by 66.6 percent to US$361 million mainly as a result of growing electricity sales revenue.

At the end of 2010, Datang Renewable Power had a total installed wind power capacity of 4,028 megawatts, up 53 percent on 2009 figures. Output reached 5,152,410 MWh, or 70.4 percent more than a year earlier.

As of December 31, the company had bank deposit balance and cash of US$764 million, compared to US$80.61 million in 2009. Borrowing for the year went up to US$3.88 billion from US$2.4 billion a year back.

Hydro power
• Hydropower firm China Yangtze Power said on March 11 that its board approved a stake purchase and appointed Yumin Deng as deputy general manager. Deng will succeed Dingming Zhang.

The board meeting on March 11 agreed to spend US$269.5 million on a 26.2 percent stake in China Power New Energy Development through participation in its capital hike. The deal will squeeze China Power New Energy Ltd’s shareholding to 25.93 percent from 35.14 percent and China Yangtze will become China Power New Energy’s largest shareholder.

This industry report brief is courtesy of AII Data Processing.