December 2011 Ends the Year with Negative Growth, Small-scale Revenue Increase Hopeful for January 2012

published: 2012-01-13 9:33 | editor: | category: Analysis

According to EnergyTrend, a research division of TrendForce, due to both weak demand and limited demand boost from the rush order transfers from China, most Taiwanese solar manufacturers released their latest sales figures of December 2011 only to conclude the year with a negative growth. Most manufacturers have kept the inventory level under control, and thus are unwilling to accept orders that might further jeopardize the gradually stabilizing prices. On the other hand, the increasing demand for high efficiency products has led manufacturers, when accepting orders, to evaluate the likelihood of selling both high efficiency and low efficiency products at the same time. Generally, the majority of the manufacturers have taken a more conservative approach in response to the falling ASP.  Gintech, with a relatively stable income performance, has been able to maintain its production utilization rate through additional OEM orders, exhibiting a relatively positive performance.

Source: EnergyTrend, Taiwan Stock Exchange Market Observation Post System

January is a traditional low season for the solar industry. The limited orders from China--resulted from additional input stocking rate and re-directed OEM orders as many clients seek alternative source to evade tax impositions from anti-dumping investigations and anti-subsidy provision--could not make up for much of January revenues. Additionally, EnergyTrend indicates that although the price may seem to be stabilizing for a rebound, the end market demand plays a critical role. At present, the order visibility remains relatively low and European and North American markets’ demand momentum slowed in December due to subsidy cuts and expiration of cash grants. As a result, most manufacturers are attempting to adjust production levels in light of the upcoming Chinese New Year vacations. EnergyTrend believes that with a slow market where trading price and volume are not expected to increase dramatically in the short term, the revenues will, however, experience slight increase in January 2012 due to lower relative base numbers in December 2011.

December is the last chance for manufacturers to window-dress financial statements. Therefore, the critical matter at hand is whether the business operation can endure the downturn within reasonable losses and to survive until the market condition improves. Most Taiwanese manufacturers’ sales performance decreased with the exception of Gintech and Sino-America Silicon Products (SAS), both showed slight sales increase, with 1.2% and 6.1% growths respectively. Furthermore, cell makers Neo Solar Power, Solartech Energy Corp. and Motech all exhibited significantly decreased sales, with 44.1%, 46.5% and 24% declines respectively while wafer maker Green Energy Technology’s sales figure also slid by 15%.


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