Shanghai Chaori Moves Into Mining Due to Solar Supply Glut
Shanghai Chaori Solar Energy Science & Technology Co. (002506), a maker of solar cells, is diversifying into mining amid a global solar supply surplus.
The company plans to invest as much as $50 million to set up Hong Kong Chaori Mining Investment Co. to seek new growth opportunities, Shanghai Chaori said today in a filing to the Shenzhen stock exchange. The unit will engage in mining resource exploration as part of a response to the government’s call for private investment abroad.
With the new policies, financial institutions will provide more support, Shanghai-based Chaori said in the statement.
An oversupply in all parts of the solar supply chain, prompted in part by cuts to European subsidies, has driven down prices, trimming profit margins. Chinese solar-module prices sank to a record 77 cents a watt as of July 2, plunging 47 percent from the year earlier, according to data from Bloomberg New Energy Finance.
Shanghai Chaori said on July 13 it expects a first-half loss of at least 120 million yuan ($19 million) compared with a profit of 132 million yuan a year earlier.
The company plans to invest 290 million yuan to fund a project that can package 500 megawatts of solar modules annually, Chaori said today in a separate filing.
The stock rose 2.1 percent to close at 5.79 yuan in Shenzhen trading.
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