GCL Poly reports flat growth & healthy profit, appoints new CEO

GCL Poly has released financial results for the full year 2015, which show a 1% increase in revenues to RMB 21.8 billion (US$3.35 billion), and US$420 million in profit, nearly double 2014 levels.

Accompanying this, the company has announced that Executive Director and President Zhu Zhanjun has been appointed CEO, to replace Zhu Gongshan, who will remain chair and an executive director.

GCL Poly is both the world’s largest polysilicon and wafer maker, and estimates a 30% polysilicon market share and a 40% wafer share during 2015. These two markets have shown very different circumstances, as explored in the February and March editions of pv magazine.

Polysilicon prices have collapsed due to a glut of product on the market, driven by overcapacity and the unintended consequences of Chinese trade action against Western polysilicon makers. However, multicrystalline wafers have been scarce and prices have shown a modest increase.

For GCL, this meant that despite an 11% increase in polysilicon output, the company’s polysilicon revenues fell 15%. However as 3/4 of the company’s polysilicon is used internally in its ingot and wafer operations, the effects were limited.

Meanwhile, the company used up wafer inventory while running at very high capacity, resulting in an effective wafer capacity utilization rate of over 100%. The company produced 15 GW of wafers and sold 15.2 GW, an 18% increase over 2014.

Overall, the company’s combined polysilicon and wafer business ran at a healthy 9.7% operating margin, with wafer sales of RMB 16.8 billion (US$2.58 billion) making up more than 3/4 of GCL’s revenues.

GCL is touting the performance of its new high-efficiency multi-wafer S4, which it says can be used to make 18.5% efficient PV cells. The company is also expanding into mono-wafer production, reporting that monocrystalline ingot pulling and slicing operations in Ningxia and Jiangsu “kicked off smoothly”.

Additionally, the company reports upgrades to diamond wire sawing technology and research and development of n-type monocrystalline wafers. GCL-Poly has disposed of its non-solar power plant business, which it says will bring in revenue for other purposes.

“GCL-Poly has accumulated a fair amount of cash for improvement of its balance sheet gearing so that the Company can be more flexible in increasing investment in R&D and technical transformation, and maintaining its leading position in the industry,” stated CEO Zhu Gongshan in a note accompanying the results.

Part of this will doubtless be used to fund the company’s aggressive expansions. According to an analysis by IHS, GCL will reach 100,000 metric tons of polysilicon capacity this year, making the company 50% larger than its nearest competitor. GCL additionally plans to add over 3 GW of wafer capacity, a more than 20% growth.

But perhaps the most aggressive expansions will be in module capacity. GCL shipped 2.5 GW of modules in 2015 and the company is planning to more than double annual capacity to 6 GW this year. Despite this, modules were scarcely mentioned in the company’s 2015 results.

Like other large PV manufacturers, GCL Poly has entered the solar project business, including acquiring a majority stake in developer GCL New Energy. New Energy installed 835 MW of solar PV projects, mostly through joint development, and acquired another 200 MW during the year. However, 324 MW of the total was installed but not connected to the grid at the end of 2015.

Utility-scale PV makes up 2/3 of this new capacity, and is spread across 15 provinces, with the largest installed capacities in Jiangsu, Inner Mongolia and Shanxi provinces. New Energy now has 1.64 GW of projects in China, and GCL-Poly also hold interest in over 500 MW of projects in China, South Africa and the United States.

Combined electricity sales from the solar farm business of GCL Poly and New Energy’s projects totaled RMB 1.24 billion (US$190 million), representing a growth area for the company. GCL Poly notes that despite curtailments in Western China, the outlook for revenues has improved due to the increase of a renewable energy funding surcharge which alleviates the issue of postponed feed-in tariff payments.