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ReneSola margins lag Chinese peers

ReneSola ballooned its revenues during the second quarter, but its operating margin – deeper into the red than many of its competitors – remains a struggle as it touts its brand around the globe.

ReneSola reported a negative operating margin of 4.4% during the second quarter, a significant improvement from negative 11.8% the prior quarter. Among major Chinese PV manufacturers, however, only Trina Solar had a worse operating margin during the quarter (at negative 5.4%) to date. 

Yingli, which also reported earnings today, chalked up a negative operating margin of 3.8%, while both Canadian Solar and JinkoSolar were in the black, suggesting a tighter handle on expenses. 

ReneSola’s 7.3% gross margin was also at the low end of major Chinese companies during the second quarter.

Investors, nevertheless, gave the company a pass, as it continues to transform itself from wafer supplier to leading module producer in a fiercely competitive market.

Shares in New York-listed ReneSola soared after its earnings were published, on a day when most other PV manufacturers declined.

“We continue to focus on sales and marketing to build our brand imagine,” says ReneSola chief executive Xianshou Li. “We have received positive feedback from customers on the quality of our products, and continued to win repeat business.”

ReneSola has notched up a number of significant sales in international markets in recent months, in countries as varied as the UK, Pakistan, Singapore and Thailand. 

The company shipped 849MW of PV kit during the second quarter. Wafers accounted for roughly half of that figure, while the other half was processed further and sold as modules. 

ReneSola is also pouring funds into researching and producing a suite of other downstream products, such as mounting systems and its increasingly prominent inverter line, including its second-generator Replus micro-inverter. 

ReneSola lost $21.1m during the second quarter, compared to $39m during the first quarter. 

Revenues ballooned 33% sequentially – and 62% year-on-year – to $377.4m, as prices improved modestly for both modules and wafers. 

ReneSola expects full-year shipments of 2.8GW-3GW, of which 1.6GW-1.8GW will be modules, and the remainder wafers.

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