Shunfeng International Clean Energy Ltd. (“Shunfeng” or the “Company”) (stock code: 1165), a leading integrated clean energy solutions provider, today announced the interim results for the 6 months ended30 June 2016 (the “Period”).
In the first half of 2016, the revenue increased 30.9% year-on-year to RMB4,607.8 million and the gross profit increased 114.7% year-on-year to RMB990.9 million. The growth in revenue and gross profit was mainly driven by the higher growth in the sales of solar products to independent third parties and the increase in revenue from solar power generation. However, the Company recorded a net profit of RMB54.5 million, representing a year-on-year drop of 68.4%, as a result of negative impacts of the solar power curtailment and the delayed tariff subsidies.
“In the first half of this year, we witnessed a strong demand for solar energy products around the world, and the 30.9% year-on-year revenue growth in the Period was largely driven by a significant increase in sales of solar products to independent third parties and the steady increase of solar power generation,” said Eric Luo, the Executive Director and CEO.
Mr. Zhang Yi, the Chairman of Shunfeng commented, “as countries around the globe have signed the historic L’Appel de Paris, governments around the world were more resolute in tackling climate changes and took more concrete steps to promote clean energy, energy conservation and emission reduction. In addition to the 257GW of PV installed capacity accumulated globally in 2015, countries around the world invested more in PV projects in the first half of this year. It is expected that new installed capacity for the full year will continue to rise and may reach 68GW, with Europe, the United States, Japan and China seeing the fastest growth.”
“However, it is no doubt that the world’s economy met difficulties in the first half of this year,” Mr. Zhang continued. “Affected by the new norm of economic slowdown and overall market volatility, the new energy industry remained in a challenging business environment. Facing intense competition and various challenges, the Company adapted to development trends and continued with its strategic transition. In the international market, the Company gradually transformed ourselves from a developer of solar products and solar power plants into a diversified service provider of comprehensive clean energy solutions. In the meantime, the Company maintained its profitability and leading market position in several business segments.”
Operational Performance of Solar Power Generation Business
In view of the completion of the acquisition and construction of various solar power stations in 2015 and early 2016, the Group’s market position in the PRC’s solar power sector has reached an important position. As of 30 June 2016, the total power generation capacity of the Group’s solar power plants has reached approximately 681,930 MW, representing an increase of 33% comparing with the same period in 2015. As of 30 June 2016, the annual design capacity connected to the grid reached 1,780 MW and there are additional 212 MW projects that are already under construction.
In addition to construction and operation of solar power projects, the Group also actively explored opportunities in solar power and other industries to achieve complementary synergy results.
Performance of Solar Energy Product Manufacturing and Sales Operations
The shipment of the Group’s product relating to its solar power manufacturing operations reached 1,589.2 MW in the first half of 2016, increased approximately 33.2% comparing with the same period in 2015. In the first half of 2016, the Group’s five largest customers accounted for approximately 19.1% of its total revenue, while the figure in the same period in 2015 was approximately 26.6%. During the Period, the Group’s largest customer accounted for approximately 4.9% of its total revenue and the relevant figure was approximately 11.2% over the same period in 2015. The relevant change was mainly attributable to the Group’s continuous efforts in developing its customer base.
Overseas Business Development
The Group has been leveraging on the brand name effect of Shunfeng which has already built up a positive brand image in the global market over the years. The Group is continuously developing its global solar power plant construction and operation business, solar energy storage business and clean energy-related businesses with a view to focusing on the development of clean energy area.
In the first half of 2016, Suniva in the United States (i) actively reduced its operating costs; (ii) increased its sales of solar products; and (iii) significantly improved its EBITA to nearly break even. Suniva is about to complete the Norcross cell factory expansion to 430MW and has achieved economics of scale effect.
During the period under review, Meteocontrol signed agreements with 19 new business partners. Meteocontrol’s subsidiary inChina was selected by Zonergy Company Limited to provide “remote integrated monitoring solution services” to their project located in Punjab Province of Pakistan. The relevant project relates to the construction of PV plants with a total capacity of 900MW, the world’s largest stand-alone solar power engineering project, and the first phase of 100MW is near completion.