China Sunergy forced to increase OEM sales business

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email

Due to previously announced working capital constraints, China Sunergy (CSUN) was forced to increase its exposure to providing PV modules under OEM agreements in the third quarter of 2013.

The company reported third quarter revenue of US$57.1 million, a 20.6% decline from US$71.9 million in the second quarter. Module ASPs, excluding those processed under OEM arrangements was US$0.62 per watt, a decrease of 1.6% from US$0.63 in the second quarter of 2013.

CSUN reported a gross profit of US$1.7 million, and gross margin of 3.0%, compared with gross profit of US$6.7 million and gross margin of 9.3% in the second quarter of 2013.

However, the company reported a loss from operations that increased to US$13.1 million in the third quarter, compared to US$4.6 million in the second quarter of 2013.

Cash, cash equivalents and restricted cash totalled US$216.4 million.

Finlay Colville, vice president at NPD Solarbuzz told PV Tech that Sunergy does not have the same global brand or marketing status as Yingli Green or Trina Solar, which in part had forced Sunergy to increase its OEM module processing, which would have lowered margins further in spite of many rivals seeing improved margins as ASPs increased.

“The fact that Sunergy is now relying on OEM module processing highlights once again that outsourcing of key components in the PV industry is not limited to lower tier players in China,” noted Colville.”OEM deals are becoming an essential part of any diversified working strategy, especially for manufacturers that lack a strong global market presence and want to keep utilisation rates at respectable levels.”

CSUN reported that Asia contributed 63.2% of the total shipment in the quarter, with India, China and Japan accounting for 24.0%, 23.1%, and 16.1% of total revenue, respectively.

“Sunergy has diversified its PV operations over the past 12-18 months,” added Colville. “This includes high-spec c-Si cell manufacturing, in-house branded modules, OEM module services, downstream project development, and having both domestic and overseas cell and module capacity. It remains unclear whether having such a wide range of options will turn out to be an advantage or a hindrance as the PV industry develops during 2014.”

CSUN management noted that recent positive Chinese Government policies and incentives for the solar industry enacted had boosted local banks' confidence and support for the PV sector, which had meant the company had been able to secure additional working capital for operations. 

“China Sunergy is progressively moving back on track, as we secure additional working capital and further enhance operations through higher production efficiency and more disciplined cost and expense controls. As such, we are optimistic that China Sunergy will capture additional market opportunities and gain greater operational scale,” said Stephen Cai, CEO of China Sunergy.

Shipment guidance

The company said that the easing of working capital issues and stronger-than-expected OEM shipments for the fourth quarter meant that shipments in the fourth quarter would be in the range from 158MW to 168MW, including approximately 40MW of solar module processed under OEM arrangements. Gross margin for the fourth quarter of 2013 is expected to be in the ‘mid-single digit’ range                             

CSUN also raised its full-year 2013 total shipment guidance to be the range of 500MW to 510MW, up from the prior range of 440MW to 480MW.

However, according to Colville, CSUN’s results highlight that module pricing improvements in Europe after the anti-dumping case was settled continue to cause problems for companies manufacturing in Europe.

“Any positive impact from higher ASPs in the European market are yet to be seen in Sunergy’s results, given that China-made module shipments have been set at €0.56/W, noted the NPD Solarbuzz analyst. “There is also the risk that modules leaving the factory in Turkey may have to be priced below the China pricing floor, to compete with other non-Chinese modules being sold into Europe today. The situation will become clearer in a few months, once European PV inventory stabilises and Sunergy starts producing greater volumes from Turkey.”

28 July 2021
LONGi has launched its Hi-MO N module, the company's first bifacial module with N-type TOPCon cells, designed to deliver ultra- high value and lower LCOE to utility-scale PV power plants. This PV TechTalk Product Series webinar will provide an overview of the module’s technology and how the introduction of n-type technologies will provide efficiency and performance gains for solar project developers.
19 August 2021
The utility-scale PV market is poised for exponential growth and yet the industry still has many fundamental opportunities to improve on standards and best practice. Tracker shade loss has been one of those topics that deserve more attention, but has been typically handled by derate factors rather than trying to accurately forecast the loss over the life of the system. Join Nextracker’s subject matter experts, Aron Dobos and Neelesh Umachandran, and Rounak Kharait, director of solar energy assessments at DNV, for a webinar about why shade modeling matters and recommendations on what the solar industry should do about it.
25 August 2021
Energy Next is a new industry exhibition focusing on the latest renewable energy and energy efficiency technology, which will be held for the first time in 2021 in Sydney, Australia alongside the Clean Energy Council’s Australian Clean Energy Summit, the peak gathering of leaders driving Australia's energy transformation. Organised by the same people behind Australia’s largest clean energy event, All-Energy Australia, Energy Next will give visitors two days of access to key suppliers in the industry, free-to-attend professional development and industry workshops, and networking opportunities to better understand clean energy issues and solutions and learn about the latest developments in this transformational, dynamic sector.
25 August 2021
The Intersolar Summit Brasil Nordeste takes place in Fortaleza, Brazil. It addresses leading local and international experts on solar power and renewable energy in the region. The Summit’s mission is to provide in-depth education, enable high-quality networking opportunities, expand the use of PV technologies at regional and national level and strengthen the local PV industry. The Intersolar Summit Brasil Nordeste is organized by Intersolar South America - Latin America’s largest exhibition and conference for the solar industry: Solar Promotion International GmbH, Pforzheim, Freiburg Management and Marketing International GmbH (FMMI) and Aranda Eventos & Congressos Ltda, São Paulo as co-organizer.
25 August 2021
Join us to hear directly from the CTOs and heads-of-research from the top-20 cell/wafer producers to the PV industry today. The event will focus on predicting the key metrics underpinning the next big shift to n-type with answers to the key questions: When will the transition to n-type happen? Which companies will be first to 10 GW capacity and production? Who will be the key equipment suppliers for the new production lines? Which n-type process flow/architecture will emerge as the front-runner? What will polysilicon purity and wafer thickness levels look like for optimized n-type manufacturing? What will the upstream poly/wafer supply-chain look like in 5 years from now?
26 August 2021
In this webinar, JA Solar will present its product portfolio based on the latest technologies to improve your PV projects, ensuring maximum reliability and performance. During the webinar we will receive insight from JA Solar about its solar technology roadmap and how the manufacturer is providing customers with innovative solutions to suit their needs, while we will also analyse how to determine the best product solution for each solar project.

Read Next

July 27, 2021
Greek industrial group Mytilineos recorded a net profit of €77 million (US$91 million) in H1 2021, however the firm’s renewables division witnessed a drop in revenue year-on-year.
July 27, 2021
Canadian Solar has closed a BRL500 million (US$100 million) financing facility to develop a Brazilian solar portfolio claimed to be the country’s largest, while also giving it the option to hold built solar assets for longer.
July 27, 2021
Community Choice Aggregators (CCA) Central Coast Community Energy (CCCE) and Silicon Valley Clean Energy (SVCE) have signed contracts for 778MW of renewable energy generation and 118.75MW of energy storage in California.
July 27, 2021
More than 140 business leaders have urged the US Congress to pass President Joe Biden’s bipartisan infrastructure bill, telling lawmakers that the bill is “desperately needed” to renew the nation’s infrastructure
July 27, 2021
A round-up of the latest news from the US solar market, featuring Vision Solar’s commitment to hire “hundreds” of sales staff as part of a two-state expansion, Recurrent Energy’s sale of two major assets in Texas and news of 8minute Solar Energy strengthening its legal team.
July 27, 2021
Tesla reported retrofit solar installations of 85MW in Q2 2021, cementing its recovery from a worst-ever performance in the corresponding period last year.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
August 19, 2021
At 9am (PT) | 6pm (CEST)
Solar Media Events
August 25, 2021
Solar Media Events
October 6, 2021