Investors cheered as ReneSola focuses on modules, polysilicon

The company, based in China’s Zheijiang province, is part the world’s major makers of PV wafers, but in recent years has diversified both up and down the supply chain in search of steadier revenues.

Like a number of its Chinese peers, ReneSola lost money during the fourth quarter of 2011, while nevertheless managing to beat analysts’ expectations on revenue and shipments.

Despite losing $36.7m in the final quarter of the year – its second consecutive quarterly loss – the company trousered an operating profit of $11.5m for the full year with a margin of 1.2%, a better showing than a lot of of its loss-making competitors.

By comparison Norway’s REC – another wafer maker busy diversifying into modules – lost NKr9.51bn ($1.66bn) in 2011.

ReneSola saw its stock price jump additional than 14% to $2.81 on the news, with the New York-listed shares now up additional than 80% in 2012.

That is significantly better than the increases seen by Chinese rivals like Suntech, Yingli Green, LDK and Jinko Solar. ReneSola shares are nevertheless down sharply over the past year, having traded higher than $10 in March of 2011.

Although ReneSola met its cost-reduction targets for the year “it was not enough to offset extremely low solar wafer and module prices”, acknowledges chief executive Xianshou Li.

ReneSola shipped 1.3GW of PV components in 2011 – most of it wafers – on 2.5GW of total capacity. It expects full-year shipments to reach 1.8GW-2.0GW in 2012, additional bullish guidance than a lot of analysts had predicted.

The company is rapidly expanding its in-home polysilicon production to compete with players like GCL-Poly, with the intention of reaching 10,000 metric tonnes of capacity by the end of 2012.

ReneSola says it was producing polysilicon at $30/kg by the end of 2011 and will hit $24/kg by the end of this year.

The company recently completed its first foray into project development, commissioning a 20MW ground-mounted array in Qinghai using its own modules.