Tongwei Earns $462.3 Million Net Profit in H1 FY21

Chinese solar equipment manufacturer Tongwei saw an almost three-fold increase in its profits in the first half of 2021 as a result of prices rising throughout the solar value chain during this period.

In H1 FY21, Tongwei's operating revenue was RMB26.5 billion (US$4 billion), up nearly 42% year-on-year. Net profit nearly trebled to RMB3 billion (US$462.3 million), up 193.5%, as average selling prices surged.

The company's gross margin reached 69.4% – broadly in line with that of Daqo New Energy, which last week reported a gross margin for Q2 2021 of 68.7% – with the manufacturer attributing its performance to an optimisation of manufacturing indexes which allowed it to achieve capacity utilisation rates upwards of 125%.

Tongwei wishes to make the most of its progress in the first half of the year by completing three new polysilicon production facilities, all of which are to become operational within the next year and a half. Both Leshan II (50,000MT) and Baoshan I (50,000MT) projects are expected to start production before the end of this year, with Baotou II (50,000MT) coming on stream in 2022.

Earlier this year, the firm announced the setting up of a 200,000MT facility in Leshan City, the first stage of which will come onstream in 2022. Consequently, the company will likely have polysilicon production capacity of 330,000MT by the end of 2022.

Tongwei said the new capacity would allow it to deliver a higher proportion of n-type polysilicon as the solar manufacturing industry’s demands shift alongside a wider migration towards n-type technologies which is forecast to occur over the next three years.

The vertically-integrated manufacturer also noted a concerted shift towards large-format cells in the first half of the year. In June, 37% of the cells shipped by Tongwei were 210mm in size, and Tongwei expects to further solidify its position in the large-format module arena through the phased implementation of a 15GW cell project with Trina Solar.

The first stage of the project, which will have a 7.5 GW capacity, will complete this year while the second phase will complete in H1 2022. The project will take Tongwei’s total overall cell capacity beyond the 55GW mark, of which 35GW will be for 210mm cells.

Meanwhile Tongwei is also increasing its standing in heterojunction modules, with a 1GW test production line also brought onstream in the first half of 2021.

According to solar advisory Clean Energy Associates, sizeable pipelines for new polysilicon expansions will continue to be built with over 1.2 million tons expected to be online by 2023. Although the majority of expansions (72%) are planned for outside of Xinjiang, China, the vast majority (89%) of global polysilicon production is still expected to take place within China.