Xinyi Solar doubled its profit in the first half of the year, but warned against the disadvantages of solar glass

According to a report from Xinyi Solar, a solar glass supplier, the company’s profit more than doubled in the first half of 2021, but it also warned that weak demand for solar glass and falling prices will inhibit its performance in the second half of the year.

Last week, when Xinyi Solar announced its first-half results, it revealed that its revenue for the first half of 2021 was 8.074 billion Hong Kong dollars (1.037 billion U.S. dollars), a year-on-year increase of more than 74%. At the same time, net profit more than doubled to HK$3.072 billion (US$394.9 million). The company used the word “eye-catching” to describe the first half of the year.

The first half of the group’s performance was mainly driven by solar glass manufacturing activities, accounting for 81% of the group’s total revenue. The remaining 19% came from utility solar development activities, which were driven by the soaring price of solar glass in the first quarter .

At the end of last year, the average selling price of solar glass soared. The solar module manufacturer called it “out of control” and asked the Chinese government to intervene.

However, the average selling price in the first half of the year did begin to decline. According to data from Xinyi Solar, in the six months ending June 30, 2021, the price of 3.2mm glass has fallen by at least 45%.

Despite the weak spot price of solar glass in the second quarter, Xinyi Solar managed to maintain its gross profit margin at 51.2%. However, as more glass production capacity goes online, gross profit margin is expected to decline in the second half of the year. Due to price fluctuations elsewhere, component manufacturers have reduced utilization rates, and glass demand remains weak.

Xinyi Solar pointed out that in the first half of this year, the entire industry increased its glass output by about 7,900 tons per day, and the company also added new production capacity. As of June 30, the daily output reached 11,800 tons.

It is expected that prices will fall in the future, and the company will adopt flexible marketing strategies to optimize the next-generation product portfolio such as large-size solar modules and implement new cost control measures.