Companies

China Sunergy profit beats, says demand improving

(Agencies)
Updated: 2010-11-16 13:24

BANGALORE - China Sunergy Co Ltd's third-quarter profit doubled, beating estimates, and the solar cell maker said it would expand capacity to cash in on growing demand, sending its shares up 8 percent.

Sales of solar equipment have jumped this year as buyers rush to build projects ahead of declining subsidies in major European markets, including Germany -- the world's largest solar market -- Italy and France, as governments pare back spending to support renewable energy systems.

Third-quarter shipments at China Sunergy surged 61 percent to 87.8 megawatts (mW), and it expects this to further rise to 102-108 mW in the fourth quarter.

Strong demand also propped up solar equipment supplier Amtech Systems. The company reported strong results and forecast 2011 revenue above estimates.

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With the growing demand, solar companies around the globe, particularly in China, are quickly adding factories to increase production capacity of cells and modules.

China Sunergy expects to reach 400 mW of solar cell capacity by the end of 2010 and 680 mW of module capacity by the end of first quarter of 2011.

Last week, Chinese peers JA Solar Holdings Co and Solarfun had also indicated they would look to expand capacity going into next year.

China Sunergy also followed peers in sounding a cautious note on margins as declining subsidies in Germany and other European countries threaten to hit profit margins.

The company reported quarterly margins of 19.9 percent, almost flat from the second quarter, but expects this to fall to 15-16.5 percent in the fourth quarter.

Shares in China Sunergy, which have risen 35 percent from a June year-low, rose 8 percent in pre-market trading. Amtech shares, which have tripled from a December 2009 year-low, rose 11 percent to $19.25.