Aiko Solar profits struggle with solar cell cost decreases but profits up 30% in H1 2020

• Significant merchant solar cell producer Aiko Solar might have increased initially half year revenue 30% compared to the prior year duration, but COVID-19 and solar cell typical cost declines, caused by weak demand, sent out internet profits falling by 68% year-on-year.

Aiko Solar's quarterly income for the last nine-months flatlined, reaching around RMB1.8 billion (US$ 270 million), despite raised solar cell deliveries as well as ability developments. The firm reported H1 2020 income of RMB3,694 million (US$ 267.7 million), which was up 30% from the previous year duration.

Nevertheless, COVID-19 influenced the business in the very first quarter. Greater production expenses caused by initiatives to restrict the effects of the pandemic on manufacturing procedures came on top of a time-out sought after as solar cell ASPs within the industry were said to have actually dropped 20% in February through to April 2020.

Net profits had already declined in the 2nd fifty percent of 2019 and were down 68% in H1 2020, contrasted to the prior year period. Profits just declined a little in Q1 2020 yet reached a brand-new low in Q2 2020, slumping to RMB56.67 million (US$ 8.28 million), compared to around US$ 31.35 million in Q2 2019.

Aiko Solar noted that in the May-June 2020 duration, the influence of COVID-19 had eased and also the business had the ability to enhance production as well as sales with orders recovering swiftly as both residential and also overseas need enhanced.

Official Chinese figures put PV setups in H1 2020 at 11.52 GW, on the same level with figures in the previous year duration, regardless of the pandemic.

Production upgrade

Aiko Solar had actually formerly released strategies to reach 22GW of high-efficiency solar cell capacity by the end of 2020. The company said that it had reached 15GW of nameplate capability in the reporting period, up from 9.2 GW at the end of 2019.

Aiko Solar anticipates to gain from the brand-new age of larger wafers and cells in two essential new dimensions (182mm as well as 210mm). Demand is gradually raising and is anticipated to be a hot market in the third quarter of this year prior to coming to be the mainstream of the marketplace next year.

To react to the rapid wafer dimension market change, Aiko Solar highlighted that it had around 5GW of cell capacity with the ability of producing 180-210mm cells with around an additional 8GW creating 166mm cells. The company stated that it had around 2GW of capability that was backwards suitable for cell dimensions listed below 166mm, which included 163mm, 161mm and also 158.75 mm sizes. The 156.75 mm cell size was taken out from the marketplace, according to the firm.

The demand for larger cell dimensions and greater cell conversion efficiencies allowed Aiko Solar to deliver about 5.24 GW in H1 2020, a boost of 82% year-on-year.

Throughout the coverage duration, the business's R&D costs reached RMB140 million (US$ 20.45 million), an increase of 30% over the very same duration last year and additionally increased its investment in next-generation technologies such as HJT, TOPCON, IBC and also HBC. Aiko Solar's yearly R&D expense in 2019 got to US$ 31.3 million, putting the company in the Top 15 rankings of R&D spenders from PV Tech's analysis of 25 PV producers that are detailed on supply exhanges.