- Hoshine Silicon’s net profit forecast for its financials in 2021 is between RMB 8.5 billion to RMB 8.7 billion
- Management cites string demand for its industrial and organic silicon products for the projected increase
- High prices for polysilicon due to its short supply was also one of the reasons along with high capacity utilization
Leading raw silicon manufacturer for the global solar PV production industry Hoshine Silicon Industry Co Ltd expects to report an annual increase of 505.28% to 519.52% in its net profit for the year 2021, attributing it mainly to significant rise in selling price.
In a stock exchange announcement declaring preliminary financial results for 2021, the management has forecast net profit for its shareholders to add up to between RMB 8.5 billion to RMB 8.7 billion ($1.34 billion to $1.37 billion).
The net profit forecast is an improvement oTooltip Textver RMB 1.40 billion it reported for the year 2020, meaning a jump of around RMB 7.1 billion to RMB 7.3 billion ($1.12 billion to $1.15 billion).
According to the management, this significant increase in net profit is expected due to various reasons, prominent among which is a boom it experienced in production and sales of industrial and organic silicon products thanks to the ‘strong rebound growth’ of the downstream. Industry policies also contributed to strong economics.
Silicon market sales price also gave an impetus to its earnings as the global PV industry witnessed a tight supply of polysilicon, pushing up the prices for industrial silicon
Hoshine experienced high-capacity utilization rate throughout 2021, the year when it commissioned the 200,000 ton sealant project, backed by technological breakthroughs.
High polysilicon price was one of the major bottlenecks of 2021 that significantly increased overall module and project costs for various markets, including China, forcing developers to wait it out and push some of their inventory to 2022 (see High Prices Leading To Solar PV Product Inventory Piling Up). The wait-and-watch policy of module makers and project developers is now leading to polysilicon inventory pile up which industry experts believe is bringing down prices.
The year 2021 was also significant for Hoshine Silicon as it was blacklisted by the US government that alleged Xinjiang located companies indulging in forced labor practices involving local Uyghur population. The industrial silicon maker was on the same list as Daqo New Energy, East Hope Group and GCL New Energies (see US Government Ban On Xinjiang Produced Solar Products).