Comtec Solar profit up 48.1% to RMB101.6mn

The company to increase the Super Mono Wafers shipment to at least 30% of its total shipments to remain profitable amid tough industry environment.

Comtec Solar Systems Group Limited (“Comtec Solar”), a global leader in manufacturing monocrystalline solar wafers, on Wednesday announced its interim results for the six months ended 30 June 2011 (the “Period”).

During the Period under review, Comtec Solar’s revenue grew 33.9% to approximately RMB574.7 million (1H FY2010: RMB429.1 million), primarily driven by the substantial increase in shipment volumes as a result of strong demand for the Company’s premium products, even within the context of a tough backdrop for the industry. Overall shipments as of 30 June 2011 were approximately 109.4 MW, representing a 28.3% increase over the same period of last year (1H FY2010: 85.3 MW). Thanks to continuous cost reductions and efficient execution, Gross Profit increased 38.2% to approximately RMB135.4 million (1H FY2010: RMB98.0 million), representing a Gross Margin of 23.6% (1H FY2010: 22.8%). The Company’s Profit attributable to shareholders surged 48.1% to approximately RMB101.6 million, representing the Net Margin of approximately 17.7%, versus 16.0% in the preceding Period. Basic Earnings per Share also climbed significantly by 34.7% to 8.96 RMB cents (1H FY2010: 6.65 RMB cents).

The Company maintained a very strong and healthy financial position and remained in a net cash position of RMB20.5 million, with bank balances and cash plus pledged bank deposits amounting to approximately RMB809.0 million as at 30 June 2011 (31 December 2010: RMB293.7 million). During the Period under review, Comtec issued a five-year convertible bond of approximately RMB650 million, together with a warrant to subscribe for US$50 million of new shares with TPG Capital. The proceeds from the convertible bonds will be applied to further production capacity expansion. 

“During the Period, we maintained healthy profit margins despite a soft macro market in which average selling prices declined along the whole industry supply chain. By leveraging our leading wafer manufacturing platform, rigorous cost reduction efforts, a prudent polysilicon purchasing strategy and our healthy financial position, we have been successful in maintaining profitable operations and driving continuous healthy growth of our business in a competitive and challenging industry environment,” said Mr John Zhang, Chairman of Comtec. 

Amidst a challenging and increasingly competitive industry environment, Comtec Solar strived to differentiate itself by offering value-added products with premium quality to its customers. During the Period, the Company completed the qualification process for pilot orders of its advanced monocrystalline wafers (the “Super Mono” wafers) which can achieve over 20% improvement in the conversion efficiency comparing to traditional P-type monocrystalline wafers. 

Looking ahead, Comtec Solar is confident it can continuously drive down production costs in order to provide customers with advanced premium wafers. The Company believes the demand for solar products is highly price-elastic and the continuous improvement of the cost effectiveness along the industry supply chain will sustain strong prospects of the cost leaders in the industry and lift entry barriers to the industry, accoridng to a Comtec Solar report. 

Mr Zhang added, “To maintain our superior and healthy profit margins, we aim to gradually increase the shipment of Super Mono Wafers to no less than 30% of our total shipments in the second half of 2011 and no less than 50% of our total shipments in 2012 so that we may further strengthen our cost leader position and hence benefit our customers by improving their cost effectiveness. So far, we have received very positive feedback from our customers on our Super Mono Wafers and we have already commenced massive production of this premium product since July 2011. To cater to stronger market demand for advanced monocrystalline wafers, we will expand our production capacity to approximately 1,400 MW within the first half of 2012.”