Guodian Tech to divest solar production lines, expects hit to profits
State-owned clean energy provider to dispose of some businesses due to challenging market environment
Guodian Technology & Environment Group, part of state-owned power giant China Guodian, said it would divest some solar production lines and see a material decline in annual profits as a result.
Guodian Tech, one of China’s largest clean energy providers, told the Hong Kong stock exchange on Wednesday that it had decided to shut down certain businesses in its subsidiary GD Solar due to “operating and financial challenges”, such as low utilisation rate, high productions costs and difficulties in expanding the market.
The disposals include crystalline silicon cell production lines with an annual capacity of 180 megawatts, modules of 400 megawatts and thin-film solar cells of 60 megawatts.
“The company could have further dispositions pending the progress of the activities of this line of business,” Guodian said in a statement. “The company expects that a significant impairment will be made on the assets associated with GD Solar. As a result, the group is likely to record a significant decrease in its profit.”
Guodian reported a net loss of 393 million yuan (HK$477 million) last year, compared with a 557 million yuan net profit in 2013.