Trina surges on Q1 profit, margin

Trina Solar, the world’s second largest supplier of PV modules, saw its shares soar on Wednesday after it guided for strong second-quarter shipments, said its downstream diversification strategy remains on track, and touted its innovation push.

Jiangsu-based Trina on Wednesday turned in its third straight quarter of profitability, notching up a net income of $26.5m in the first quarter of 2014, up nearly three-fold on the previous quarter.

By contrast, rival Canadian Solar last week reported a substantial sequential decline in its quarterly net income.

Trina’s quarterly gross margin rose to 20.6%, comparing favourably once again to Canadian Solar’s 14.7%.

Trina's shares soared more than 30% on its results, making it the top gainer in percentage terms on the New York Stock Exchange, and pulling many other solar stocks upward.

Analysts said the company's strong second-quarter guidance laid to rest many fears about weakness in the Chinese solar market earlier this year.

Trina – which counts the likes of California’s SolarCity and China’s TEBA Sunoasis among its key customers – shipped 558MW of modules during the first quarter, and stuck to its full-year target of 3.6GW-3.8GW.

Trina shares soared 17% in early trading on Wednesday, vastly outpacing the gains seen across the solar sector.

Despite Trina’s ambitious expansion plans for 2014 – during which it expects to spend more than $200m ballooning its production capacity, in part by acquiring factories from lower-tier Chinese players – chief executive Jifan Gao struck a cautious tone in his remarks, saying: “We are conscious of the importance of balancing the pace of our growth with our commitment to developing superior products if we are to maintain long-term success.”

“We remain focused on maintaining profitable growth, as opposed to pursuing volume growth alone,” Gao says.

Trina has previously flagged up a major return to R&D and product innovation, having last month announced an upgraded version of its high-efficiency Honey Ultra modules.

Trina also stressed its thus-far successful push into downstream project development, which is a key plank of its future strategy.

During the first quarter, it sold a 50MW PV array in Gansu province to Huadian Fuxin Energy Corporation, a key milestone as it is the first major PV project Trina had developed and built from scratch in China.

That array is only the first phase of a larger project in Wuwei, Gansu, with the second phase already under construction and due for commissioning next month.

Trina also recently completed China’s first residential solar rooftop village in Jiangsu province – a stepping stone into China’s soon-to-boom distributed-generation segment – and brought 24MW of downstream capacity online in the UK.