Trina Solar Sees Shipments Rising Despite Slowdown in China

  • Chinese company trims forecast for development bussiness
  • Growth in U.S., and elsewhere will offset China, Trina says

Trina Solar Ltd., the world’s biggest solar manufacturer, reported a sharp increase in first-quarter profit and said it expects shipments to increase in 2016 even as demand in China slows in the second half.

Net income almost doubled to $26.6 million from a year earlier, Changzhou, China-based Trina said in a statement on Thursday. That’s ahead of the $20.7 million average estimate of four analysts surveyed by Bloomberg. Earnings per American depository share were 29 cents.

Trina, which surpassed Yingli Green Energy Holding Co. in 2014 as the biggest solar supplier, maintained its forecast to ship 6.30 gigawatts to 6.55 gigawatts of panels this year, up from 5.74 in 2015. It cut guidance, however, for its development business that builds solar farms -- predominately in China -- saying it will connect 400 megawatts to 500 megawatts this year, down from an earlier forecast of 750 megawatts.

“The China market will be weaker in the second half of the year,” Teresa Tan, Trina’s chief financial officer, said during a conference call Thursday. “However the global market, including the U.S., Japan and emerging markets like India are going to be relatively strong.”

Pricing Pressure

Trina has benefited from growing demand for photovoltaic panels as nations around the globe work to curb fossil fuel consumption and reduce emissions. The company expects to ship 1.5 gigawatts to 1.6 gigawatts of photovoltaic modules in the second quarter. Deliveries in the first three months of the year were 1.42 gigawatts, up 39 percent from a year earlier.

The solar manufacturing business, however, continues to be increasingly competitive, leading to lower prices, Tan said. Gross margins slipped to 17.1 percent in the first three months of the year, from 19.1 percent in the fourth quarter of 2015. The company expects margins to remain stable in the mid-teens as it cuts manufacturing costs to offset falling prices, Tan said.

Despite increasing demand for solar equipment, Trina’s ADRs have declined 30 percent in the past year as solar stocks have lost favor with investors. In December, Chief Executive Officer Gao Jifan made an offer to take the company private, offering shareholders $11.60 an ADR, a 21.5 percent premium at the time. The company continues to evaluate the offer, Tan said.

The ADRs declined 1.6 percent to $8.71 at the close in New York.

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