The people's government of Zhanyi District, Qujing, Yunnan Province signed the 2 GW photovoltaic manufacturing project and solar power plant project with Trina Solar on February 28.
The projects are invested and constructed by Trina Solar, with a total of RMB 9 billion yuan, mainly used on the 210mm high-efficiency solar module production, solar power station and relevant supporting facilities. After the completion, the annual value is expected to reach RMB 5 billion yuan, with 400 jobs created.
The company also held the board of shareholders the other day, discussing the company’s current operation.
Shareholders posed their concern on the capacity surplus since some other domestic peers have all expanded their production. Gao Jifan, the company’s president believed that the industry would always be balanced in the future, being the module manufacturers are based on the brand, leaving the capacity a less crucial factor, thus sales channel is the key compared to capacity.
At present, the market share of the top five companies is continuously increasing, probably over 7%, which is accumulated in leading enterprises, and it may concentrate more in the future, further decreasing the shares of other competitors, said Gao.
Shareholders also raised a question on the recent markup of silicon and wafer, and wondered if there was possibility to see a price cut. Gao explained that there might be capacity surplus in view of current hundreds of gigawatts of wafer capacity and over 600,000 tons of silicon material. A tight supply and demand scenario can be expected in the first half of the year and may loosen a bit in the second half. The silicon price will also affect the subsequent links, more frequent price fluctuations can be observed, said Gao.
Regarding the company’s lower gross profit margin and net profit compared to other enterprises, Gao attributed it to its special business structure. Some manufacturers have upstream business, such as extending to the production of silicon material and silicon wafer, which gained relatively high profit in the past two years. However, Trina was not engaged in upstream business.
Instead, Trina Solar shows higher net assets return, being the modules are asset-light business. Since the company has no business in wafers, their profitability is less likely affected by the supply and demand of raw material capacity.
