By Adveith Nair
BANGALORE, Nov 9 (Reuters) - China's JA Solar Holdings Co and Solarfun Power Holdings Co Ltd posted strong profits and raised their full-year outlooks, joining others in the solar industry in signalling strong demand.
Sales of solar equipment have jumped this year as buyers rush to build projects ahead of declining subsidies in major European markets, including Germany -- the world's largest solar market -- Italy and France, as governments trim spending to support renewable energy systems.
'Business momentum and visibility continue to be strong, and we are seeing robust demand for our products from both existing and new customers,' JA Solar CEO Peng Fang said in a statement.
JA Solar, which shipped 418 megawatts (MW) in the third-quarter, raised its full-year shipment view for a second time in three months. It now expects to ship 1.45 gigawatt (GW) in 2010, up more than 7 percent from its prior view, and said prospects for 2011 remained bright.
'We have signed supply agreements with multiple customers for 2011 product delivery that now exceed 1.2 GW, and have received prepayments associated with these supply agreements, further improving our future order visibility,' the company said.
JA Solar's third-quarter profit comfortably beat estimates. Gross margin was above the company's forecast at 22.5 percent, helped by higher average selling prices (ASP).
Smaller peer Solarfun also reported higher gross margins as ASPs rose, and the company expects prices to increase slightly in the current fourth quarter.
Solarfun raised its full-year shipment outlook by 5 percent to 785 MW, and said it expects demand to stay 'healthy' in 2011.
BOOSTING CAPACITY
To cash in on this solid demand, companies around the globe, particularly in China, are quickly adding factories to boost production capacity of cells and modules. Chinese firms have been among the fastest growing in the world as they win market share in Europe and North America.
Both JA Solar and Solarfun indicated they would look to expand capacity going into next year.
JA Solar said its annual cell manufacturing capacity rose to 1.8 GW at end-September, while solar capacity rose to 1.9 GW, ahead of its expansion schedule.
Solarfun expects its module manufacturing capacity to increase by 67 percent to 1,500 MW by 2011. It expects solar cell capacity to more than double to 1,300 MW.
Earlier, Energy Conversion Devices Inc offered a revenue outlook for the first time in a year, indicating better visibility.
On Monday, LDK Solar also reported strong results. . U.S. solar giant SunPower reports on Thursday and Canadian Solar reports a day later.
Surging demand has also boosted prices of solar stocks. Shares of both JA Solar and Solarfun have more than doubled over the past year.
The WilderHill Clean Energy index, whose components include SunPower, First Solar and Suntech Power Holdings , rose 8 percent in July-September.
JA Solar shares were up about 6 percent in pre-market trade, while Solarfun shares reversed initial gains, after the company announced a share offering.
(Reporting by Adveith Nair in Bangalore, Editing by Ian Geoghegan) Keywords: CHINA SOLAR/ (adveith.nair@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 4135 5800; Reuters Messaging: adveith.nair.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
BANGALORE, Nov 9 (Reuters) - China's JA Solar Holdings Co and Solarfun Power Holdings Co Ltd posted strong profits and raised their full-year outlooks, joining others in the solar industry in signalling strong demand.
Sales of solar equipment have jumped this year as buyers rush to build projects ahead of declining subsidies in major European markets, including Germany -- the world's largest solar market -- Italy and France, as governments trim spending to support renewable energy systems.
'Business momentum and visibility continue to be strong, and we are seeing robust demand for our products from both existing and new customers,' JA Solar CEO Peng Fang said in a statement.
JA Solar, which shipped 418 megawatts (MW) in the third-quarter, raised its full-year shipment view for a second time in three months. It now expects to ship 1.45 gigawatt (GW) in 2010, up more than 7 percent from its prior view, and said prospects for 2011 remained bright.
'We have signed supply agreements with multiple customers for 2011 product delivery that now exceed 1.2 GW, and have received prepayments associated with these supply agreements, further improving our future order visibility,' the company said.
JA Solar's third-quarter profit comfortably beat estimates. Gross margin was above the company's forecast at 22.5 percent, helped by higher average selling prices (ASP).
Smaller peer Solarfun also reported higher gross margins as ASPs rose, and the company expects prices to increase slightly in the current fourth quarter.
Solarfun raised its full-year shipment outlook by 5 percent to 785 MW, and said it expects demand to stay 'healthy' in 2011.
BOOSTING CAPACITY
To cash in on this solid demand, companies around the globe, particularly in China, are quickly adding factories to boost production capacity of cells and modules. Chinese firms have been among the fastest growing in the world as they win market share in Europe and North America.
Both JA Solar and Solarfun indicated they would look to expand capacity going into next year.
JA Solar said its annual cell manufacturing capacity rose to 1.8 GW at end-September, while solar capacity rose to 1.9 GW, ahead of its expansion schedule.
Solarfun expects its module manufacturing capacity to increase by 67 percent to 1,500 MW by 2011. It expects solar cell capacity to more than double to 1,300 MW.
Earlier, Energy Conversion Devices Inc offered a revenue outlook for the first time in a year, indicating better visibility.
On Monday, LDK Solar also reported strong results. . U.S. solar giant SunPower reports on Thursday and Canadian Solar reports a day later.
Surging demand has also boosted prices of solar stocks. Shares of both JA Solar and Solarfun have more than doubled over the past year.
The WilderHill Clean Energy index, whose components include SunPower, First Solar and Suntech Power Holdings , rose 8 percent in July-September.
JA Solar shares were up about 6 percent in pre-market trade, while Solarfun shares reversed initial gains, after the company announced a share offering.
(Reporting by Adveith Nair in Bangalore, Editing by Ian Geoghegan) Keywords: CHINA SOLAR/ (adveith.nair@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 4135 5800; Reuters Messaging: adveith.nair.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.