GCL Technology Holdings Azioni (OTC: GCPEF)

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GCL Technology Holdings Ltd is an investment holding company. It is principally engaged in the manufacturing and sales of polysilicon and wafers for the solar industry; and the sales of electricity, development, investment, management, and operation of solar projects. The company operates in two reportable segments Solar material business which mainly manufactures and sales of polysilicon and wafers to companies operating in the solar industry, and the Solar farm business which manages and operates solar farms located in the USA and the PRC. The majority of revenue is derived from the Solar material business segment.

GCL TECHNOLOGY HLDGS LTD by GCL TECHNOLOGY HOLDINGS LIMITED

GCL Technology Holdings Ltd

By Doug Young
GCL Technology Holdings Ltd.&nbsp;(OTC: <a class="ticker" href="https://www.benzinga.com/stock/gcpef#OTC">GCPEF</a>)&nbsp;<a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0315/2024031502047.pdf">said on Friday</a>&nbsp;its revenue fell slightly last year and its profit plunged, as booming demand for new solar power plants was offset by plunging prices for the polysilicon that is the company&rsquo;s main product.
GCL said its revenue fell 6.2% for the year to 33.7 billion yuan ($4.68 billion), while its profit tumbled by 85% to 2.5 billion yuan. Calculations using company data show its revenue fell to 12.8 billion yuan in the second half of the year, down 39% from the first half. As its revenue tumbled, the company lost 3 billion yuan in the second half of the year.
GCL shares rose in Monday morning trade in Hong Kong and were up 5.4% at the midday break. The stock is still down about 28% over the last 52 weeks.
Demand for solar panels has boomed over the last two years, as countries rush to build new solar power plants to reduce their carbon emissions. At the same time, solar panel makers and their upstream suppliers have added huge amounts of new production capacity to meet the booming demand. The result has been oversupply for the overall industry, which has led to falling prices and big profit declines for most companies.
After soaring in 2022, polysilicon prices peaked last year and have been falling since then. GCL said its average selling price for polysilicon was 76.8 yuan/kg last year, less than a third of the price of 228.5 yuan/kg for 2022. GCL rival&nbsp;Daqo&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dq#NYSE">DQ</a>) last month reported its average selling price for polysilicon in last year&rsquo;s fourth quarter was just $7.97/kg, less than a quarter of the $37.41/kg it was selling for a year earlier.
As a result of lower prices, GCL&rsquo;s gross profit margin fell to 34.7% last year from 48.7% in 2022.
&ldquo;In 2023, the price of polysilicon decreased sharply throughout the year due to the reversal of supply and demand of polysilicon and had since been lingering at the bottom. Profit contribution from the solar materials business for the year ended 31 Dec. was significantly lower than that for the year ended 31 Dec. 2022,&rdquo; GCL said.
The company said its own manufacturing capacity nearly doubled last year to 420,000 MT by year-end, up by 200,000 MT since the start of the year. It added it will continue to add capacity this year, raising the total to 500,000 MT. As it boosted its capacity, the company&rsquo;s production last year rose to 232,256 MT of polysilicon, more than double its 104,723 MT for 2022.
After growing 28% annually between 2019 and 2023, new solar panel installations worldwide have entered a new stage of slower growth. Wood Mackenzie predicts there will be no growth at all in new solar panel installations between 2024 and 2028, and that new installations could even contract in some of those years.
That demand slowdown, combined with the addition of so much new solar panel production capacity in such a short time, means that prices are unlikely to rebound significantly for companies like GCL for at least the next few years.
This article is from an unpaid external contributor. It does not represent Benzinga&#39;s reporting and has not been edited for content or accuracy.

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New 52-Week Lows For Monday Morning

JinkoSolar Holding Co., Ltd. (NYSE: <a class="ticker" href="/stock/jks#NYSE">JKS</a>) shares are being hammered on Friday against a double downgrade by Morgan Stanley. The lowered opinion was based on weak prognostication for the company's first-quarter results.
<h3>Q1 Net Profit To Be 50 Percent Lower Than Consensus</h3>
Analysts Sheng Zhong and Simon Lee see a 52-percent downside from consensus estimates for the first quarter net profit, impacted by lower margin. According to the analysts, the lower margin was the result of lower ASP and slower cost reduction due to a high polysilicon price and higher OEM fees.
The analysts believe the next 1&ndash;1.5 years will be even tougher, with extensive new capacity rolling out for the purposes of upgrading technology and lowering production costs. Meanwhile, the demand is gloomy from the uncertainties of policies worldwide, the analysts added. 
Accordingly, the analysts believe a majority of <a href="https://www.benzinga.com/trading-ideas/long-ideas/17/04/9307869/will-the-sun-also-rise-for-the-solar-etf"> manufacturers </a> will find it hard to achieve break-even in the second half of 2017 and 2018.
<h3>Lowering Estimates Drastically</h3>
Morgan Stanley lowered its 2017 earnings estimate for JinkoSolar by 92 percent to a loss of 45 million yuan and the 2018 bottom line estimate to a loss of 28 million yuan from a profit of 311 million yuan previously. The sharp cut was attributed to overwhelming pressure from price wars and margin squeeze expectations.
The firm forecasts gross profit margin at around 11 percent for 2017 and 2018 from 18 percent in 2016. 
Morgan Stanley said it thinks the consensus is too high for JinkoSolar, as well as for GCL-Poly Energy Holdings Ltd. (OTC: <a class="ticker" href="/stock/gcpef#OTC">GCPEF</a>) and Canadian Solar Inc. (NASDAQ: <a class="ticker" href="/stock/csiq#NASDAQ">CSIQ</a>).
<h3>Double Downgrade</h3>
As such, Morgan Stanley enacted a double <a href="https://www.benzinga.com/analyst-ratings/upgrades/17/05/9526561/benzingas-top-upgrades-downgrades-for-may-26-2017"> downgrade </a> to Underweight, while it lowered its 12&ndash;18-month price target to $16.40, reflecting lower earnings and multiples.
The firm noted that JinkoSolar has run up, mainly due to the Abu Dhabi project announced on May 24. However, the company has a mere 20-percent stake in the project and the PPA is low, the firm added.
Reasoning that mono c-Si is showing strong growth and momentum through market share gains from multi c-Si, the firm said it is Overweight on Longi and Daqo New Energy Corp (NYSE: <a class="ticker" href="/stock/dq#NYSE">DQ</a>). Meanwhile, the is Underweight on GCL Poly, which is the most negatively impacted due to it being the largest c-Si player. The firm has also turned Underweight on <a href="https://www.benzinga.com/news/earnings/17/04/9305345/top-solar-analyst-likens-canadian-solar-to-sunpower-first-solar-from-201"> Canadian Solar</a>.
At time of writing, shares of JinkoSolar Holding were down 3.82 percent at $20.64.
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<a href="https://www.benzinga.com/trading-ideas/technicals/17/05/9393290/first-solar-up-17-after-q1-report-raised-guidance-johnson-upg"> First Solar Up 17% After Q1 Report, Raised Guidance, Johnson Upgrade </a>

JinkoSolar Clouded By Double Downgrade From Morgan Stanley

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