ReneSola Ltd. reported its Q3/2021 revenues of $15.5 million as having gone down 59% annually and 16% sequentially yet the management of the solar downstream company said it is ‘comfortable’ with the performance and ‘bullish’ on its future prospects.

The reason for this revenue drop and missed guidance was cited as 2 project sales, in Spain and Pennsylvania, that did not close as expected. At the same time, it also blamed direct or indirect impact of supply chain delays due to high prices. However, the company managed to stay profitable, it added with GAAP net income of $0.7 million, even though it was 90% drop from the previous quarter.

Gross profit for the quarter was $6.1 million with a gross margin of 39.2%, compared to $11.3 million and 61% in Q2/2021 and $5.9 million and 60.6% in Q3/2021, respectively.

In a letter addressed to the shareholders, ReneSola’s management stated, “The revenue miss does not concern us and should not bother you either. We often point out that project sales are lumpy with uncertain timing. On an annual basis, the lumpiness is smoothed out and we can more accurately forecast our level of activity. On a quarterly basis, sales can easily move between periods, skewing the results for a quarter but having no impact on the economics of our business. This was the case in the 3^rd quarter.”

Pointing at the recent news of some module suppliers bringing down their prices, ReneSola said it plans to buy ‘more modules starting early next year’.

ReneSola claims to have accumulated a mid-to-late stage pipeline of 1.8 GW till the end of September 2021, and expects to end the year 2021 with 2.2 GW which will be higher than its total target of 2 GW aimed for the US and Europe. As it continues to expand, the company is interested in adding storage too to its portfolio.

Guidance

For Q4/2021, ReneSola has guided for its revenues to fall within $21 million to $27 million and gross margin of 36% to 40%. Overall, its full year 2021 revenues are forecast to be in the range of $77 million to $83 million with gross margin of over 40%.

For 2022, the management aims to achieve net profit growth of at least 30% over 2021.

Response to Grizzly Research claims

ReneSola recently found itself in a tight spot when a New York based research organization, Grizzly Research LLC called it a ‘fraudulent company’ led by a ‘fraudulent team’ that drastically over-represents its project pipeline to access the US capital market’. The research report claims most of the company’s projects stated to be in Europe are non-existent. Most of these are delayed for years.

The management has rubbished all these claims as ‘false’ and ‘misleading’. On a call with analysts to discuss the Q3/2021 financials, CEO Yumin Liu tried to allay fears by stating, “After studying the Grizzly report, we conclude that the author has very limited knowledge of how solar project development works and has manipulated facts that are readily available to the public to create an impression of nefarious activity that is false, inappropriate, and misleading.”