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GCL-Poly plans to sell wafer unit, expects $77.6 million loss for first 10 months of 2018

After the failed attempt to sell a majoritry stake in its main polysilicon unit, Jiangsu Zhongneng, the Chinese solar manufacturer has now agreed to sell its wafer unit Suzhou Kezhun to Huajun Holding Group for US$123.6 million. The operation is part of the company’s plan to focus on wafer manufacturing based on the diamond-wire sawing technology and shift production to low-cost locations.

Chinese polysilicon and wafer manufacturer GCL-Poly has agreed to sell its wafer manufacturing unit Suzhou Kezhun Photovoltaic Technologies Co., Ltd to Liaoning Huajun Asset Management Co., Ltd, a wholly-owned subsidiary of Hong Kong-based investment firm Huajun Holding Group Co., Ltd, for CNY 850 million ($123.6 million).

The company said the transaction is part of its plan to maintain production capacity with fewer wafer manufacturing facilities, while focusing on the diamond-wire sawing technology for polysilicon wafer production and shifting manufacturing activities from a high-cost location, such as that of Suzhou Kezhun, to low-cost industrial areas.

The plan is intended to support the construction of a 60,000 tonne polysilicon production plant in Qitai county, in China’s remote Xinjiang region which, according to the company, has now started trial production. “With the low electricity cost in Xinjiang Uyghur Autonomous Region, the Company’s polysilicon base in Xinjiang Uyghur Autonomous Region may become the world’s leading low-cost, high-quality polysilicon production base,” GCL-Poly said in a filing with the Hong Kong stock exchange.

The company added that it will also launch the production of mono-like wafers with higher cost-performance value in 2019. “Considering the effects of enhancing wafer production efficiency, the mono-like wafer with higher cost-performance value and the lower polysilicon production cost from the polysilicon base in Xinjiang Uyghur Autonomous Region, it is expected that the profitability of the Company will greatly improve next year,” it said.

Profit warning

Profitability, meanwhile, seems to be a serious issue for 2018. The company, in fact, has warned that it expects to incur in a CNY 534 million CNY ($77.6 million) loss for the first 10 months of this year. This loss, however, should be compensated by a CNY 446 million gain coming from the sale of Suzhou Kezhun.

The manufacturer explained that its operating performance for the first 10 months of last year was negatively affected by the increase in finance costs and exchange loss, and lower wafer ASPs.

Last year, GCL-Poly failed to sell a 51% stake in Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd, which is one of GCL-Poly’s major operations in China, to Chinese electrical equipment giant Shanghai Electric. The polysilicon maker said in August that the proposed CNY 12.75 billion ($1.85 billion) agreement had fallen through, because “both parties believe that the timing and conditions for proceeding on the potential disposal [by GCL-Poly] are not mature enough”.

Source: pv magazine