Installation boom temporarily ended in China. Just like EnergyTrend forecasted, demand declined rapidly in July. Solartech, a Taiwanese cell maker, firstly announced its July financial results on August 1st – revenue declined substantially compared to June. TSEC saw decline in sales in 2Q already.
Solartech takes orders selectively
Solartech earned consolidated revenue of NT$ 664 million in July, down 34.8% MoM and 24.3% YoY. The cell market started to witness weak demand after mid-June and entered low-season in July, according to Solartech. The company is not willing to give up on prices, so they take orders selectively, leading to low revenue in July.
From January to July, the company’s consolidated revenue reached NT$ 6.848 billion, up 34.9% YoY. Despite low order visibility, Solartech is hoping for strong demand in August. However, at this point, prices seem difficult to increase. They will conduct maintenance, increase production efficiency, and lower operating costs during the low-season.
TSEC sees significant decline in profits in 2Q
As for TSEC, its profit has already started to decline in late-2Q. The company announced a net profit after tax of NT$ 39.44 million, down 79.8% QoQ. Its earnings per share was NT$ 0.11.
Weak cell demand in early-June has caused cell prices to drop and affected TSEC’s revenue. TSEC’s gross margin in 2Q dropped to 8.44%, down 8.17% from 1Q.
Although the company’s net profit after tax in 1H16 reached NT$ 234 million, with the earnings per share reaching NT$ 0.66, better than same period last year, the market sees weak demand in 3Q. Therefore, whether TSEC can turn losses around or not remains to be seen.