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Rising High-Efficiency Module Demand Leads to High Gross Margin for Trina Solar in 2Q15

published: 2015-08-21 18:31


 China’s top-tier manufacturers have continually announced the financial results for the second quarter of 2015 (2Q15), in which, Trina Solar had the best performance. In 2Q15, Trina experienced strong growth in terms of shipment and revenue. Its gross margin even reached 20%. The key to Trina’s success in 2Q15 is its increasing use of high-efficiency products.

Trina’s module shipment hit a new high in 2Q15, reaching 1.23GW, up 20% from last quarter and 30.6% QoQ. Revenue was US$722.9 million, a 29.5% rise QoQ and a 39.2% rise YoY. Meanwhile, Trina raised the module shipment target for 2015 from 4.4GW-4.6GW to 4.9GW-5.1GW, and 700MW-800MW of which aim to satisfy self-developed power plant demand. Thus, the new target will increase shipment by 33.9%-39.3% compare to 2014, showing that Trina is optimistic toward the future market demand.

On the contrary, Canadian Solar’s shipment declined 21.5% QoQ to 809MW in 2Q15. Revenue was US$637 million, a 26% dip from the previous quarter. Gross margin was 15.2%, 17.8% lower than 1Q15. Another Chinese manufacturer, JA Solar, pointed out that its module shipment (including OEM) reached 717.4MW, up 22.8% from 1Q15 and 60.9% QoQ. Revenue was US$437 million, a 12.7% rise QoQ. Gross margin was also higher, which increased from 0.3% to 16.4%, up 16.1% from 1Q15.

Among the three companies’ financial reports of 2Q15, Trina’s gross margin of 20%, higher than both Canadian Solar’s and JA Solar’s, caught the most attention because it’s a significant improvement from 18% in 1Q15 and 15.4% same period last year. Trina mentioned in the financial report that the key to the rising gross margin is higher module efficiency. In other words, the higher the module efficiency, the lower the production and labor cost per unit and since costs drop faster than retailer prices, gross margin becomes higher.

260W module is the most common module that’s shipped out by top-tier Chinese manufacturers recently, representing more than 50% of the total shipment. Meanwhile, 260W module is also mainly adopted by new power plants. Top-tier module manufacturers can see their capacities of such products fully booked for at least the next three months, which shows that high-efficiency module is getting popular. On the other hand, because governments will put more emphases on the commercial and residential markets rather than power plants, using high-efficiency modules can lower system cost, increase power generation per unit area, boost ROI, and allow manufacturers to maintain a certain level of gross margin. Therefore, those that take the lead in terms of efficiency will be more likely to be the leading brands in the future.

This Week’s Spot Price

This week’s spot prices remained flat. But due to renminbi depreciation, EnergyTrend has revised our website spot prices downward to reflect the actual market prices. If you have any questions, please don't hesitate to contact us!

Chinese polysilicon manufacturers are optimistic about the demand in September and are waiting to raise the prices. The negotiation is still going on between manufacturers and clients, hence polysilicon price quote stayed flat at RMB115-118/kg.

Multi-si wafer manufacturers hope to revise the prices upward, but downstream manufacturers so far hold conservative attitudes as September is still some time away. High-efficiency multi-si price quote in both Taiwan and China remained steady at RMB5.8-5.9. Mono-si demand continued to decrease, with the prices dropping below US$0.943/pc.

Demand for cells with efficiency above 17.8%-18% continued to increase. But since August orders have been confirmed in the beginning of the month, prices this week remained flat. However, due to renminbi depreciation, our website price quotes have been adjusted downward. Mono-si cell price slightly dropped to US$0.345/W.

Top-tier module manufacturers can see their high-efficiency capacities fully booked for the next three months. Current trading prices did not affect by renminbi depreciation. Yet, 260W module average price have been adjusted to US$0.53/W, while mono-si module prices was at US$0.60/W.

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