| CHANGZHOU, China
CHANGZHOU, China Chinese solar product maker
Trina Solar Ltd expects its revenue to double in 2009, reaching
$1.7 billion to $1.8 billion as it ramps up capacity to meet
strong demand for clean energy, its chief executive said on
Solar module shipments next year will surge to 450
megawatts (MW) from this year's 210 MW to 220 MW, as the firm
plans to double its capacity to 700 MW by the end of 2009 and
boost it further to 1,000 MW in 2010, Gao Jifan said in an
interview from the firm's headquarters in Changzhou, near
To fuel the expansion, Trina Solar's capital expenditure is
expected to rise to $250 million in 2009 from $200 million this
year and reach $350 million in 2010, with funding coming mostly
from internal resources, he said.
"Our cash flow is enough to fund our expansion until 2009.
I believe our operating cash flow will increase further in
2010, enough to supply our expansion needs," said Gao, who is
also the firm's chairman.
He therefore did not expect the development plans of the
New York-listed firm to be significantly constrained over the
next two to three years by the U.S. credit crunch.
Trina Solar's cash reserve at the end of this year is
estimated at $100 million, with operating cash flow generated
in 2009 seen between $150 million and $200 million, he added.
The firm has secured 70 percent of its sales target for
2009 and Gao expected to secure more orders, most likely in
Europe, which now generates more than 90 percent of its total
Trina Solar makes solar modules in China and ships them
overseas. Gao said he may consider building plants outside
China in the future.
Trina Solar said in April that it had signed an eight-year
polysilicon supply agreement with a unit of GCL Silicon
Technology Holdings, sufficient to produce about 2,600 MW of
Supply constraints in polysilicon, which turns sunlight
into electricity inside solar cells, have driven prices higher,
hurting profit margins for photovoltaic producers.
But the situation has started to improve in the second half
of the year as polysilicon producers expand their output to
meet demand from the solar industry.
Gao expected the company's profit margin, estimated at 23
to 25 percent this year, to improve in 2009, as it signed more
long-term polysilicon supply contracts, with pricing levels
significantly lower than in the spot market. He did not provide
Solar power stocks posted massive gains in 2007 as concerns
about climate change and soaring prices of fossil fuels boosted
investor interest in renewable energy sources.
But many shares fell sharply this year, reflecting a view
that solar power valuations had got ahead of themselves.
Trina Solar's shares, traded on the New York Stock
Exchange, closed at $25.02 on Wednesday, down sharply from
$53.80 at the end of last year.
Gao said he believed his firm's share price was undervalued
given the bright prospects of the solar industry, as more
governments in developing countries such as China offer policy
incentives to promote the development of solar power, following
the lead of many European countries.
"There is no doubt that our share price is undervalued," he
said. "It should be more than double the current level."
(Editing by Edmund Klamann)