A drop in the price of solar glass and rising raw material costs have led to Xinyi Solar’s warning that its first-half profit will be lower. Xinyi Solar is among the world’s largest suppliers of solar glass.
Based on preliminary data from five months, profit is expected to fall by 33%-43% from HK$3.07 trillion a year ago, according to the company in a statement Friday night.
Xinyi Solar, owned by Chinese billionaire Lee Yin Yee fell 3.5% to HK$12.66 on Monday morning after the announcement. Its shares have loose more than a fifth of their value over the past twelve months.
“The drop in profit is mainly due to the decline in profitability of the solar business,” according to “around 10-20% reductions in the average price of solar glass products” and “significant increases in raw materials and energy such as soda ash or natural gas.”
The statement stated that “the group’s success in achieving high sales volume and improved production efficiency” partially offset the adverse effects of the previous factors. It was not possible to give a sales figure.
China is the largest producer & supplier of solar panels in the world.
Xinyi Glass is a Lee company that supplies glass to the construction sector. It also warned Friday that its net profit for the six-month ending June 30 will drop by 35% to 50%, from HK$5.38 trillion a year ago. This was due to lower prices and higher costs. The shares of Xinyi Glass have lost almost 43% of their value over the past year and were trading at around HK$18.14 this morning in Hong Kong.
Lee is one of three billionaires whose fortunes are tied to Xinyi Solar or Xinyi Glass. Tung Chuing Sai, CEO of Xinyi Glass, has a wealth of $1.5 billion. Tung Bor, a vice-chairman of Xinyi Glass, is worth $1.4 Billion.