www.renewableenergyworld.com/articles/2017/...rices-slump.html
Jinko ramped capacity 51 percent last year through September as solar demand began slowing. That’s particularly true in China, one of the company’s biggest markets, where the government is curtailing subsidies and power consumption is stagnating. Clean-energy installations worldwide will increase this year at the slowest pace in a decade, according to Bloomberg New Energy Finance, and demand for solar power will slow, after a flat 2016.
It’s a familiar story: solar manufacturers — especially in China — borrow heavily to expand capacity, see the market slump and push ahead with the expansion strategy anyway.
“That’s the MO of these companies,” said Gordon Johnson, an analyst at Axiom Capital Management in New York.
During periods of corrections or downturns, Chinese solar companies have often focused on cutting costs and lowering prices in a bid to gain market share, at the expense of profit, said Angelo Zino, an analyst at CFRA Research in New York.
“You could call it bad timing — or bad management,” he said.
“You need to take a prudent and rational approach to capacity-increase efforts,” Zino added. “The winners are the ones that tend to be diligent, more nimble and that focus on balance-sheet management.”
And the losers are the companies that can’t generate enough revenue to cover their debts, even if they have to cut costs to drive shipments.
“Being the biggest often requires you to sell at low margins or negative margins,” Chase said. It’s a pattern the industry has seen before.
Germany’s Q-Cells SE, once the world’s biggest panel company, filed for insolvency in 2012 after losing market share to lower-cost Chinese rivals. Suntech Power Holdings Co., which also held that title, racked up $2.2 billion in debt by 2012 and was pulled into bankruptcy after failing to make bond payments. It was succeeded by Yingli Green Energy Holding Co., which hasn’t reported annual profit since 2010 and failed in May to make payments on some of its $1.7 billion in debt.
Zurück
Weiter
