Chinese solar cell maker Hanwha SolarOne Co Ltd said it expects emerging solar markets to generate demand for its products and posted a 12 percent rise in first-quarter profit on higher module shipments, sending its shares up 5 percent.
The second quarter would be the “low point” for gross margin in 2011, a company executive said on a conference call.
The executive said a “high single digit” fall in selling prices and high cost inventory would tighten margins in the current quarter.
However, Hanwha expects shipments to rebound in the beginning of the third quarter, helped by potential markets like the United States and China, besides demand from the German market.
Hanwha said it plans to build a substantial market in China as module prices dip and energy demand escalates. It added that new markets such as Greece, India, Thailand and Turkey were opening up.
A number of solar companies such as China Sunergy and Yingli Green Energy Holding Co Ltd have indicated that they are looking to cash in on emerging solar markets.
The company expects its module shipments in the second quarter to decline to about 200 MW, from 248.5 MW in the first.
However, the company backed its full-year shipments outlook of 1.0-1.2 GW for the year.
The company said it will ramp up capacity from the end of the current quarter to reduce manufacturing costs and improve margins.
Hanwha, formerly Solarfun Power Holdings, said its capital expenditure for the year would come in at $450 million, more than triple its capital spending of $108.8 million in 2010.
January-March profit rose to $22.8 million, or 22 cents per American depositary share (ADS), from $20.4 million, or 35 cents per ADS, in the year-ago period.
Total net revenue jumped 55 percent to $335.2 million.
The company’s shares were at $5.20 in early morning trade on Tuesday.
