GCL-Poly cut production by 29% in 1Q

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Uncle Chang

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Stock Positions: TSL CSIQ HSOL SOL JKS YGE JASO Hanergy (0566.HK) GCL(3800.HK)

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Thursday, May 16th 2013, 10:36pm

GCL-Poly cut production by 29% in 1Q

http://www.bloomberg.com/news/2013-05-16…html?cmpid=yhoo
Output fell to 8,653 metric tons from 12,235 metric tons a year earlier....
GCL-Poly sold 3,702 tons in the quarter, a 22 percent increase from a year ago, at an average price of $16.62 per kilogram, the company said. Wafer production in the first quarter rose 5.8 percent to 1,231 megawatts, as sales, at an average price of 21 cents per watt, gained 20 percent to 1,482 megawatts.

Good or Bad?

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odyd12

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Thursday, May 16th 2013, 10:46pm

ugly, look at the average price. Wafers at SOL sell at the same prices as GCL. No indication of revenue or anything else, do your own math CEO of GCL says, and tell us how we are doing. LOL

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Uncle Chang

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Thursday, May 16th 2013, 11:37pm

I don't mean if it's good or bad for GCL, is it good for its customers who can buy wafer from GCL cheap and sell modules at reasonable profits?

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odyd12

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Thursday, May 16th 2013, 11:50pm

On average they sold wafer at 0.21, I doubt that all purchase made by CSIQ is around 0.20 but it is certainly within 0.20 to 0.21 as the buying in Q4 averaged 0.21. The only one with positive margins are CSIQ and TSL so far, I doubt that ASP was great, probably around 4% drop. Perhaps not as much if Chinese sales were not that great.
Maybe YGE will get cheap poly finally.

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explo

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Friday, May 17th 2013, 3:26am

It looks to me as they recovered a bit from Q4, where by my estimates they sold poly below $15 and wafers below 20 cents, but the business conditions are still poor.

This post has been edited 1 times, last edit by "explo" (May 17th 2013, 4:01am)

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so-so-solar

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Friday, May 17th 2013, 4:00am

Very bad result. GCL is the biggest poly firm in china, and should suffer from the imposition of EU tariff badly as she is just too big in size. Almost all negative form international trade restriction on solar product would impact GCL substantially.
However, GCL would not run into bankruptcy as its parent company belong to China's Military Division. The historical top ten leaders in China's communists leaders were the owners of the Company.
It would broker unless Chinese government broke.

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odyd12

cfeng

Unregistered

Friday, May 17th 2013, 6:26am

Uncle Chang,
GCL has a 65,000MT capacity. That's 16,250 MT per quarter. 8,653MT is nearly a 50% cut in production. And if they sold 3,702 MT what happened to the other 5000MT ? How many wafers did they produce and how much their poly and wafer inventories swell? There is one thing to have underutilization because you want to sell to good accounts and for a profit, but it's another thing to have 50% underutilization and losing money on everything you sell. At 50% underutilization, the losses at GCL must be massive. Did anyone have a link to the full PR?

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cfeng

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Friday, May 17th 2013, 6:28am

Quoted from "so-so-solar"

GCL would not run into bankruptcy

We heard that for years for STP and LDK.

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eysteinh

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Friday, May 17th 2013, 6:29am

Cfeng: http://gcl-poly.todayir.com/attachment/2…18133117_en.pdf

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odyd12

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Friday, May 17th 2013, 6:35am

wafer consumed around 6100MT in Q1. So it looks like they took inventory out.

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cfeng

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Friday, May 17th 2013, 6:58am

Thanks eysteinh. I'm not familiar with HK rules about disclosures but is that the full ER?

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explo

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Friday, May 17th 2013, 7:07am

They only disclose financials 2 times a year and under different accounting rules than solar11.

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cfeng

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Friday, May 17th 2013, 8:25am

Quoted from "explo"

They only disclose financials 2 times a year and under different accounting rules than solar11.

Wow. That's just FUBAR. In any case, GCL is in deep pain and I'm tempted to say in a worst pain than Q4 based on the much lower ASPs. It also explains the spot prices and who's been trying to sell poly and wafers at any price... and failing as their 50% utilization shows. LOL

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cfeng

Unregistered

Saturday, May 18th 2013, 7:09am

I think GCL customers are: YGE, TSL, JASO, JKS, CSIQ (others? Please add or remove from the list if you know)

Having such a list of customers, is there a reason why these companies would not be taking 100% of their poly and wafers from them, assuming that they no longer have any other previous contracts still active?

So can we come up with a list of what % each one in both poly and wafers gets from GCL?

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explo

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Saturday, May 18th 2013, 11:13am

Remove JKS and add STP, HSOL and CSUN. YGE is a new member. Yes the early GCL utilization reports should tell a story about the cell utilization of their big customers, but there could be other moving parts like change in their wafer utilization or change in sourcing distribution. Someone should model this (maybe me on a rainy day).