Trina Solar takes hit on Q1 shipments to Europe



Major tier-1 PV manufacturer, Trina Solar has significantly reduced module shipment guidance for the first quarter of 2014, due to weakness in orders from the EU because of a pending price adjustment being ratified by EU and Chinese authorities as part of an anti-dumping agreement.

Last week, Yingli Green also revised down shipment guidance attributed to seasonality as well as delays to projects in Algeria.

However, Trina Solar, Yingli Green and Renesola have the highest shipment exposure of China-based PV manufacturers to Europe and are the leading suppliers to the booming UK market.

“We remain confident that ongoing market demand for our products is strong, and that we will be able to maintain our expected level of growth in 2014 as planned,” stated Jifan Gao, chairman and chief executive officer of Trina Solar. “However, given the temporary decrease in Q1 shipments to the European markets pending the finalisation of the price undertaking adjustment, we are updating our guidance for the first quarter of 2014. We expect demand in certain European countries to remain strong, and our first-rate reputation and strong customer service will continue to allow Trina, as a market leader, to capture opportunities and achieve growth in the European markets.”

Trina Solar said that first quarter 2014 PV module shipments would be in the range of 540MW to 570MW, including 20MW to 30MW for its downstream PV projects, compared to previous guidance of shipments being in the range of 670MW to 700MW, downstream project shipments remained unchanged.

According to ROTH Capital financial analyst, Philip Shen Trina Solar’s shipments are expected to be down 17% in the first quarter of 2014, compared to the previous quarter, while Yingli Green shipments are expected to decline by 10%, Shen said in an investor note to clients.

Shen noted that in March, 2013 the EU lowered its floor price to €0.53c/W from €0.56c/W, “which likely caused buyers to delay purchases”.

The ROTH Capital analyst added that in 2013, Renesola had the highest EU shipment mix of 45%, compared to Trina Solar’s 37% exposure and Yingli Green's 32%.

Like Yingli Green, Trina Solar reiterated full-year 2014 module shipment guidance, which was previously provided to be in the range of 3.6GW to 3.8GW. PV project shipments would be between 400MW and 500MW.

Trina Solar also revised upwards expected margin guidance for the first quarter, noting that the overall gross margin would be between 18% to 20%, compared to previous guidance of mid-teens in percentage terms.

The increase was said to be due to improved module ASPs and a gross margin in the high-teens from the sale of its downstream 50MW Wuwei, China project in the quarter.

RBC Capital Markets financial analyst Mahesh Sanganeria said in a research note to clients that he would not be surprised if more China-based PV manufacturers with high exposure to the European market “reduce Q1 shipment guidance”.

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