Singyes Solar targets 33pc surge in sales

Engineering company aims to take advantage of Beijing's incentives to help the domestic market, triggering a rally in its share price

PUBLISHED : Thursday, 10 January, 2013, 12:00am
UPDATED : Thursday, 10 January, 2013, 4:21am


Buildings curtain walls and solar power projects engineering firm China Singyes Solar Technologies aims to grow sales by a third this year, after Beijing stepped up policies to develop the nascent domestic market to counter slowing overseas sales.

The Zhuhai-based firm is targeting to raise sales to more than four billion yuan (HK$4.98 billion) from the three billion yuan projected last year, according to chairman Liu Hongwei.

It reported sales of 1.29 billion yuan in last year's first half, up 29 per cent year on year.

But as Beijing boosted incentives for the installation of solar power panels in recent months, Liu expects Singyes' market share and profit margin to fall in the future as soaring demand will attract more rivals.

The industry has more than 60 solar power system design and engineering firms, among which Singyes claims to have the biggest market share of 10 per cent.

"As the number of participants rises, profit margins will get squeezed. No industry can escape this tendency," Liu told reporters during a factory site visit. "We aim to maintain our profitability by offering more value-added services and products."

He also said Singyes, which started as a curtain wall engineering firm in 1995 and entered the solar sector in 2004, competed by offering customers designs that maximised power output and minimised costs. It focuses on installing solar panels mounted on rooftops or embedded in buildings' curtain walls.

The company had 166 megawatts of uncompleted orders at the end of June last year after completing 40 MW of projects in the first half. It received 296 MW of new orders in the second half.

Solar-embedded projects accounted for 70 per cent of gross profit from construction projects and 30 per cent from traditional curtain wall projects.

Faced with major domestic output overcapacity and slowing overseas sales growth amid the economic downturn in developed markets and rising trade barriers against mainland products, Beijing acted to grow the domestic solar market to help loss-making panel makers.

It approved 4.7 gigawatts of subsidised solar projects last year, up from 0.7 GW in 2011.

In August, Beijing unveiled a target to raise accumulative solar panel installation from about three GW at the end of 2001 to 21 GW by 2015 and 50 GW by 2020. The 2020 target has been raised several times.

But a lack of incentives for monopoly state-owned power distributors to build grid-connection to solar projects remains a deterrent for large solar projects that need to export excess power beyond local communities to be profitable.

A 20 MW project atop Singyes' assembling facilities in Xiangtan, Hunan province, is still waiting for grid connection despite having been completed in 2011.

Singyes' shares rose 9.8 per cent yesterday to HK$7.27.