GCL-Poly Energy Holdings Ltd. (3800), China’s largest maker of silicon for solar panels, reported net income that missed estimates as prices of polysilicon and wafers tumbled.
The company generated profit of HK$4.3 billion ($554 million) in 2011, GCL-Poly said in a filing to the Hong Kong stock exchange yesterday. That missed the HK$5.2 billion mean estimate of 19 analysts compiled by Bloomberg. Hong Kong-based GCL-Poly had a profit of HK$4.02 billion in 2010.
A surplus across the solar-components chain stemming from European subsidy cuts has depressed prices of solar wafers and polysilicon. The average prices of the raw materials to make solar panels declined more than 60 percent last year from 2010, according to Bloomberg New Energy Finance.
China wants each “leading” polysilicon maker to have 50,000 metric tons a year of production capacity, according to a Feb. 24 statement from the Ministry of Industry and Information Technology. The goal would boost supplies even as prices drop.
GCL-Poly had annual capacity to produce 65,000 tons of polysilicon at the end of December, surpassing a target of 46,000 tons it set last March. It sold about 4.5 gigawatts of wafers in 2011, while the company had a capacity of 8 gigawatts, according to the filing.
The company said last month that it set up a venture with NRG Solar LLC to build sun-powered projects to diversify from producing the raw materials.
In China, GCL-Poly is also partnering with CGN Solar Energy Development Co. and China Merchants New Energy Group to develop solar farms.
The company plans to cut polysilicon production costs by 13 percent to $18 a kilogram by the end of this year from 2011.
The shares fell 1.2 percent to close at HK$2.50 yesterday, before the earnings announcement, trimming its gain to 15 percent this year.
To contact Bloomberg News staff for this story: Feifei Shen in Beijing at firstname.lastname@example.org
To contact the editor responsible for this story: Reed Landberg at email@example.com