North Coast Solar Stocks

September 17, 2009

Solarfun sees sequential rise in Q3 revenue, shares up

Filed under: SOLF — Tags: , , , , — Jason @ 12:25 pm

Thu Sep 17, 2009 12:25pm EDT

* Sees Q3 rev RMB 918 mln to RMB 984 mln

* Sees Q3 gross margin of 17 pct

* Still expects Q3 shipment to exceed 100 MW

* Shares rise as much as 13 pct

By Arup Roychoudhury

BANGALORE, Sept 17 (Reuters) – Chinese photovoltaic cell maker Solarfun Power Holdings Co Ltd (SOLF) forecast sequentially higher third-quarter revenue, and said it was seeing an improvement in end-market demand, sending its shares up 13 percent.

For the third quarter, the company expects revenue of 918 million yuan ($134.5 million) to 984 million yuan ($144.1 million).

The lower end of the range is 7.5 percent higher than its second-quarter revenue of 854.6 million yuan ($125.1 million), Solarfun said.

“While there can be some positive conclusions derived from today’s release for shipment strength in the third quarter, aggressive pricing declines are worrisome for the quarter and even more so for the fourth quarter of 2009 and the first quarter of 2010,” Simmons and Co analyst Burt Chao said.

Lack of financing, coupled with a pullback in incentives in Spain, has led to a global glut of solar panels, pushing down prices.

In August, Solarfun had warned that average selling prices would fall further.

On Thursday, the company reiterated its total module shipment outlook for the quarter, which it expects to exceed 100 megawatts (MW), and forecast gross margin of about 17 percent.

Chao said the revenue outlook was below his estimate of $153.8 million. Analysts on average were expecting Solarfun to report revenue of $165.5 million in the third quarter, according to Reuters Estimates.

Solarfun said efforts to realign supply costs and increase in production capacity at its ingot and wafer manufacturing facilities should enable it to achieve healthy margins in the third quarter.

“We continue to face a highly competitive pricing environment, but we remain fully confident in our ability to win business as market demand recovers,” the company, which reported a gross margin of 21.5 percent in the second quarter, said.

Shares of the company were up 5 percent at $6.53 in midday trade Thursday on Nasdaq. They touched a high of $7 earlier in the session.

($1=6.826 Yuan)

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