‘Silicon Module Super League’ (SMSL) member GCL System Integrated Technology (GCL-SI) recently reported its strongest rebound in sales in the second quarter of 2017, leading to a return to profitability in the first half of the year.
GCL-SI has reported provisional first half year financial results in a summary only filing that indicates sales reached over RMB6.38 billion (US$967.7 million), compared to US$974.4 million in the first half of 2016, a 4.84% decline year-on-year.
As with many PV module manufacturers reporting second quarter and first half year financial results in the last month, revenue and margin declines have primarily been due to average selling price (ASP) declines which started in the second half of 2016.
The company had previously reported a provisional net loss of US$18.2 million in the first quarter of 2017 on revenue of RMB2.4 billion (US$359.7 million).
However, revenue in the second quarter of 2017 topped US$608 million, almost a 68% increase quarter-on-quarter.
Revenue in the second quarter of 2017 topped US$608 million, almost a 68% increase quarter-on-quarter.
Recent stable ASPs in the second quarter of 2017, due to global demand fuelled by over 24GW of installations in China in the first half the year, do not reflect
ASP declines of over 30% seen in the second half of 2016.
Demand for PV modules in China was significantly higher in the second quarter of 2017 than in the first quarter, explaining the strong rebound in GCL-SI’s revenue, quarter-on-quarter.
As with other China-based manufacturers, GCL-SI benefited from the continued strong growth in PV installations in China. According to China’s National Energy Administration (NEA), total installations in the first half of 2017 reached 24.4GW.
GCL-SI additionally benefited from its downstream sister company, GCL New Energy Holdings (GCL-NE), reporting revenue in the first half of 2017 of RMB4,976.9 million, representing an increase of 8.0% from RMB4,607.8 million for the corresponding period in 2016.
GCL-NE had been able to build and grid-connect a total of around 1,600MW of PV projects in the first half of 2017.
At Solar Power International 2017, PV Tech was told by Alvin Dong, GCL-SI executive president & solar energy department president, that total module shipments in the reporting period were around 2.2GW.
Dong noted that overseas shipments continue to gain momentum as part of the GCL-SI strategy of building a global sales footprint, anchored in developing the solar industry in China.
GCL-SI reported overseas sales revenue of 923 million yuan in the first half of 2017, which accounted for 14.46% of the total and which was 64.54% higher than in the previous annual period.
“Overall business is better than previously expected, especially in North America,” noted Dong. GCL-SI is a newcomer, but benefits from being part of the largest group of companies in the solar industry. That said, work was required to gain customer confidence in key overseas markets such as North America.
“To gain success in the region meant we undertook a number of small test projects to prove our products provided higher performance and yield, having the resultant data analysed by NREL, for example,” noted Dong.
Another factor in GCL-SI breaking into the North American market was the ramp of its solar cell and module assembly plant in Vietnam, which has achieved a capacity of around 800MW.
Critical to the market, the solar cell capacity ramp has been based on PERC (Passivated Emitter Rear Cell) technology with the flexibility to produce P-type multi and P-type mono cells for the residential, commercial and utility-scale markets.
Showcased at SPI was the company’s Black Silicon 5 Busbar (5BB) and Multi-Busbar (MBB) technology, as well as double-glass modules, which are all available in a 72-cell format.
Flexibility in its manufacturing capacity was another theme highlighted by Dong, noting that the company believed this strategy made the most sense and actually contributed to lower manufacturing costs.
Dong said that the solar cell capacity ramp to 2GW by the end of 2017 was based completely on PERC technology, however manufacturing lines would be able to process both P-type multi and P-type mono cells.
Currently, around one third of production is P-type multi, using ‘Black Silicon’ texturing after wafers (S2 size) are cut with diamond wire. A further third of production is P-type mono PERC, while the remaining third is flexible to customer demand.
Offering a broad product portfolio is a key strategy and the company has been allocating around 3% of total revenue to R&D activities and placing emphasis on transferring R&D milestones into production at a faster rate. P-type mono solar cell efficiency reached 20.4% in the reporting period.
Although demand in the second half of the year is expected to slow slightly, there are key Chinese programs such as ‘Top Runner’ and ‘Poverty Alleviation’ that will be prioritized. Demand growth in the second half of the year is being fuelled by an expected 5.5GW of Top Runner project deadlines at the end of September 2017 and a government target of 8GW of ‘Poverty Alleviation’ schemes throughout the year.