SHANGHAI, Nov. 9, 2010 /PRNewswire-FirstCall/ -- Solarfun
Power Holdings Co., Ltd. ( "Solarfun" or the "Company") (Nasdaq:
SOLF), a vertically integrated manufacturer of silicon ingots,
wafers and photovoltaic (PV) cells and modules in China, today
reported its unaudited financial results for the quarter ended
September 30, 2010. The Company will
host a conference call to discuss the results at 7:00 am Eastern Time (8:00
pm Shanghai Time) on November 9,
2010. A slide presentation with details of the results
will also be available on the Company's website prior to the
call.
THIRD QUARTER 2010 HIGHLIGHTS
- Total net revenues were RMB 2,185.7
million (US$326.7 million), an
increase of 24.7% from 2Q10 and an increase of 121.5% from
3Q09.
- PV module shipments, including module processing services,
reached 223.9 MW, an increase from 204.6 MW in 2Q10 and from 102.6
MW in 3Q09.
- Average selling price ("ASP"), excluding module processing
services, increased 4.6% to RMB 11.72
per watt (US$1.75) from RMB 11.19 per watt in 2Q10, and decreased 15.5%
compared with RMB 13.86 per watt in
3Q09.
- Gross profit increased 34.6% quarter-over-quarter to
RMB 496.4 million (US$74.2 million) from RMB
368.8 million in 2Q10, and increased 142.8% from
RMB 204.4 million in 3Q09.
- Gross margin increased to 22.7% compared with 21.0% in 2Q10,
primarily due to the increase in ASP. Gross margin in 3Q09 was
20.7%.
- Operating income increased 45.5% quarter-over-quarter to
RMB 391.8 million (US$58.6 million) from RMB
269.2 million in 2Q10, and increased 202.8% from
RMB 129.4 million in 3Q09.
- Operating margin improved to 17.9% from 15.4% in 2Q10 and 13.1%
in 3Q09.
- Net income attributable to shareholders on a non-GAAP basis(1)
was RMB 273.7 million (US$40.9 million), an increase of 18.1% from
RMB 231.7 million in 2Q10 and an
increase of 301.0% from RMB 68.2
million in 3Q09.
- Net income per basic ADS on a non-GAAP basis was RMB 4.62 (US$0.69),
an increase of 15.6% from RMB 4.00 in
2Q10 and an increase of 266.0% from RMB
1.26 in 3Q09.
- Net loss attributable to shareholders on a GAAP basis was
RMB 25.2 million (US$3.8 million), compared with net income
attributable to shareholders of RMB 272.8
million in 2Q10. The loss in 3Q10 was attributable a
non-cash loss of RMB 279.2 million
(US$41.7 million) from the change in
fair value of the convertible feature of the Company's convertible
bonds. There was a non-cash gain of RMB 57.8 million in 2Q10. As explained in
prior quarters, the fluctuations in the fair value of the
convertible feature of the Company's convertible bonds are
primarily due to changes in the Company's ADS price, over which the
Company has no direct control, and does not reflect the operating
progress achieved by the Company.
- Net loss per basic ADS on a GAAP basis was RMB 0.43 (US$0.06),
compared with net income per basic ADS on a GAAP basis of
RMB 4.71 in 2Q10 and RMB 2.53 in 3Q09.
- Annualized ROE on a non-GAAP basis was 35.3% in 3Q10, compared
with 35.9% in 2Q10 and 13.4% in 3Q09.
- Annualized ROE on a GAAP basis was negative 2.9% in 3Q10,
compared with 35.2% in 2Q10 and 20.9% in 3Q09.
Peter Xie, President of Solarfun,
commented, "We are pleased with the results we achieved in the
third quarter, particularly our record shipments and revenues as
well as our increased gross margin, operating cost control and
continued strong return on equity. In the first nine months
of 2010, we have achieved non-GAAP earnings per basic ADS of
US$1.70. We continue to see
healthy market demand in the fourth quarter and beyond, and with
increased scale and further vertical integration in 2011, we
believe we will continue to be well-positioned for further
profitable growth"
STRATEGIC PARTNERSHIP WITH THE HANWHA GROUP
As previously announced, the strategic investment in Solarfun by
the Hanwha Group, through Hanwha Solar Holdings Co., Ltd., was
completed in September 2010. The net
proceeds to Solarfun totaled approximately US$78 million, which Solarfun expects to use to
fund its expansion plans and for general corporate purposes. Hanwha
also purchased shares from Good Energies II LP and Yonghua Solar
Power Investment Holding Ltd. in separate transactions. These
transactions resulted in Hanwha holding a 49.99% interest in
Solarfun . Three representatives of Hanwha were appointed to
Solarfun's Board, which comprises four independent directors and
three appointees from Hanwha. (For full details of these
transactions and the biographies of new Board members, see
Solarfun's press release issued on October
8, 2010 ).
Solarfun believes that the strategic partnership with Hanwha
provides a number of synergies and growth opportunities for
Solarfun, including:
- Hanwha is a large and well-capitalized Korean conglomerate with
global reach, brand and access to capital.
- Hanwha has identified the solar industry as its primary growth
opportunity in the future and intends to establish Solarfun as its
flagship vehicle to become a top three solar module producer
globally by 2015.
- Hanwha intends to aggressively pursue upstream businesses such
as polysilicon and downstream businesses such as solar project
development, management and financing. Hanwha is well positioned to
achieve these goals leveraging its existing chemical, engineering
and construction as well as financial services provided by its
affiliates.
- This strategic partnership provides a "virtual" vertically
integrated solar business unit with brand, scale and low-cost
production. This virtual integration strategy also spreads business
risk and capital requirements across the two organizations.
THIRD QUARTER 2010 RESULTS
- Total net revenues were RMB 2,185.7
million (US$326.7 million), an
increase of 24.7% from 2Q10 and an increase of 121.5% from 3Q09.
The increase in net revenues in 3Q10 compared with 2Q10 was
primarily due to higher shipments and higher ASP, reflecting strong
end market demand.
- Revenue contribution from PV module processing services as a
percentage of total net revenues was 6.9%, compared with 11.9% in
2Q10.
- PV module shipments, including module processing services,
reached 223.9 MW, an increase from 204.6 MW in 2Q09 and from 102.6
MW in 3Q09.
- The geographic breakdown by shipment destination in terms of
total module revenue in 3Q10 and 2Q10 was as follows:
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- Module revenue attributable to shipments to Germany decreased to 53% in 3Q10 from 63% in
2Q10, while shipments to Italy,
USA, Netherlands and Canada increased during 3Q10.
- Average selling price ("ASP"), excluding module processing
services, increased 4.6% to RMB 11.72
per watt (US$1.75) from RMB 11.19 per watt in 2Q10. The increase in
ASP in 2Q10 reflects the increase in module prices due to tight end
market conditions as well as the appreciation of Euro against the
RMB.
- Gross profit increased 34.6% quarter-over-quarter to
RMB 496.4 million (US$74.2 million) from RMB
368.8 million in 2Q10, and increased 142.8% from
RMB 204.4 million in 3Q09.
Gross margin increased to 22.7% from 21.0% in 2Q10, primarily
due to the increase in ASP.
- The blended COGS per watt, excluding module processing
services, was US$1.35, representing a
3.2% increase from US$1.31 in 2Q10.
The increase was primarily due to the increase in the cost of
silicon materials, including polysilicon and externally sourced
wafers and cells. The blended COGS takes into account the
processing cost (silicon and non-silicon) using internally sourced
wafers, purchase costs and additional processing costs of
externally sourced wafers and cells, as well as freight costs.
- The production cost (including both silicon and non-silicon
costs) using internal wafers was US$1.16 per watt, representing a 3.6% increase
from US$1.12 per watt in 2Q10.
The increase was primarily due to the increase in the cost of
polysilicon.
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- Operating profit was RMB 391.8
million (US$58.6 million),
representing an increase of 45.5% from RMB
269.2 million in 2Q10 and an increase of 202.8% from
RMB 129.4 million in 3Q09. Operating
margin for 3Q10 was 17.9%, which compares to 15.4% in 2Q10 and
13.1% in 3Q09. Operating expenses as a percentage of total
net revenues decreased to 4.8% from 5.7% in 2Q10 and 7.6% in
3Q09.
- Interest expense was RMB 39.9
million (US$6.0 million),
compared with RMB 40.2 million in
2Q10 and RMB 40.8 million in
3Q09.
- The Company recorded a net foreign exchange loss of
RMB 31.8 million (US$4.8 million), which combined a foreign
exchange gain with losses from the change in fair value of foreign
currency derivatives. The Company recorded a net foreign
exchange gain of RMB 15.1 million in
2Q10 and a net foreign exchange loss of RMB
19.3 million in 3Q09.
- Loss from the change in fair value of the conversion feature of
the Company's convertible bonds was RMB
279.2 million (US$41.7
million), compared with a gain of RMB
57.8 million in 2Q10 and a gain of RMB 82.4 million in 3Q09. The fluctuations, from
the adoption of ASC 815-40 on January 1,
2010, were primarily due to changes in the Company's ADS
price during the quarter. This line item has fluctuated, and is
expected to continue to fluctuate quarter-to-quarter. The Company
has no direct control over the fluctuations.
- On a non-GAAP basis, net income attributable to shareholders
was RMB 273.7 million (US$40.9 million), compared with RMB 231.7 million in 2Q10 and RMB 68.2 million in 3Q09. Net income per
basic ADS, on a non-GAAP basis, was RMB
4.62 (US$0.69) in 3Q10,
compared with RMB 4.00 in 2Q10 and
net loss per basic ADS of RMB 1.26 in
3Q09.
- On a GAAP basis, net loss attributable to shareholders was
RMB 25.2 million (US$3.8 million), compared with net income
attributable to shareholders of RMB 272.8
million in 2Q10 and RMB 136.6
million in 3Q09. Net loss per basic ADS was RMB 0.43 (US$0.06)
in 3Q10, compared with net income per basic ADS of RMB 4.71 in 2Q10 and RMB
2.53 in 3Q09.
- On a non-GAAP basis, the Company had an annualized return on
equity of 35.3% in 3Q10, compared with 35.9% in 2Q10 and 13.4% in
3Q09.
- On a GAAP basis, the Company had an annualized return on equity
of negative 2.9% in 3Q10, compared with 35.2% in 2Q10 and 21.0% in
3Q09.
FINANCIAL POSITION
As of September 30, 2010, the
Company had cash and cash equivalents of RMB
1,296.7 million (US$193.8
million) and net working capital of RMB 2,681.6 million (US$400.8 million), compared with cash and cash
equivalents of RMB 885.4 million and
net working capital of RMB 2,002.4
million as of June 30, 2010.
Total short-term bank borrowings (including the current portion of
long-term bank borrowings) were RMB 950.5
million (US$142.1 million),
compared with RMB 706.0 million as of
June 30, 2010. The increase in
short-term borrowings was because the Company accessed short-term
credit facilities to fund working capital needs.
As of September 30, 2010, the
Company had total long-term debt of RMB
1,128.4 million (US$168.7
million), which comprised both long-term bank borrowings and
convertible notes payable. The Company's long-term bank borrowings
are to be repaid in installments until their maturity in 2011 and
2012. Holders of the convertible notes have the option to require
the Company to purchase the notes on January
15, 2015.
Net cash from operating activities in 3Q10 was negative
RMB 194.0 million (US$29.0 million), compared with RMB 417.5 million in 2Q10 and RMB 160.3 million in 3Q09. The decrease from 2Q10
was primarily due to the increase in accounts receivables as well
as advances to suppliers.
As of September 30, 2010, accounts
receivable increased to RMB 1,289.9
million (US$192.8 million)
from RMB 828.9 million as of
June 30, 2010 and RMB 707.2 million as of September 30, 2009. Days sales outstanding
decreased slightly to 46 days in 3Q10 from 48 days in 2Q10 and 56
days in 3Q09.
As of September 30, 2010,
inventories increased to RMB 689.6
million (US$103.1 million)
from RMB 591.6 million as of
June 30, 2010 but decreased from
RMB 808.4 million as of September 30, 2009. Days inventory outstanding
improved to 35 days in 3Q10 from 43 days in 2Q10 and from 88 days
in 3Q09, primarily because of continued improvements in the
Company's supply chain management.
Capital expenditures were RMB 113.5
million (US$17.0 million) in
3Q10. In the first nine months of 2010, the total capital
expenditures were RMB 386.8 million
(US$57.8 million).
CAPACITY EXPANSION
Details on the Company's production capacities and expected
production capacities are as follows:
|
|
Capacity ramp-up
plan
|
|
|
|
|
|
|
|
Sept 30,
2009
|
June 30,
2010
|
Sept 30,
2010
|
Dec 31, 2010
(Estimated)
|
2011
(Projected)
|
|
Ingot
|
MW
|
300
|
360
|
360
|
360
|
800
|
|
Wire saw
|
MW
|
300
|
400
|
400
|
400
|
800
|
|
Cell
|
MW
|
360
|
400
|
500
|
500
|
1300
|
|
Module
|
MW
|
550
|
700
|
900
|
900
|
1500
|
|
|
|
|
|
|
|
|
|
|
The Company announced on October 12,
2010 that it plans to complete the following expansion by
the third quarter of 2011:
- Cell capacity to increase from 550 MW to 820 MW;
- Wire saw capacity to increase from 400 MW to 572 MW; and
- Ingot capacity in increase from 360 MW to 510 MW.
The Company plans to further expand the production capacity as
stated in above table. The ramp-up of the additional capacity
will commence in the second quarter of 2011 and be completed by the
end of the fourth quarter 2011.
BUSINESS OUTLOOK
The Company provides the following guidance based on current
operating trends and market conditions.
For 4Q10, the Company expects:
- Total module shipments to be 205 MW to 215 MW, of which about
25% to 30% will be for PV module processing services.
- ASP excluding PV module processing services to increase
slightly from 3Q10, assuming that the average Euro/US dollar
exchange rate stays at approximately 1.35 during 4Q10.
For the full year 2010, the Company will also raise the shipment
guidance from 750 MW to approximately 785 MW.
For the fourth quarter of 2010, the Company expects a slight
decline in module shipments compared with the previous quarter.
This does not reflect the strength of market demand nor the
Company's competitive position. The decline in the forecast
module shipments is due to the following reasons:
- As previously announced, the Company will be converting some of
its existing cell lines into high-efficiency cell capacity with the
installation of selective emitter technology. This will
cause some temporary loss of internal cell capacity in the fourth
quarter.
- The Company has made a conscious business decision to balance
customer needs with corporate profitability goals and will
therefore reduce its purchase of externally sourced cells, which
are more expensive than internally sourced cells.
CONFERENCE CALL
The Company will host a conference call to discuss the 3Q2010
results at 7:00 am Eastern Time
(8:00 pm Shanghai Time) on
November 9, 2010.
Mr. Peter Xie, CEO and President,
Mr. Gareth Kung, Chief Financial
Officer, and Mr. Paul Combs, Vice
President of Strategic Planning, will discuss the results and take
questions following the prepared remarks. A representative of
Hanwha Chemical Corporation will participate on the call and
comment on the recent investment in Solarfun.
The dial-in details for the live conference call are as
follows:
- U.S. Toll Free Number: 1.800.638.4930
- International dial-in number: +1.617.614.3944
- China Toll Free Number (North):
10 800 152 1490
- China Toll Free Number (South):
10 800 130 0399
Passcode: SOLF
A live webcast of the conference call will be available on the
investor relations section of the Company's website at:
http://investors.solarfun-power.com/. A replay of the webcast will
be available for one month.
A telephone replay of the call will be available for seven days
after the conclusion of the conference call. The dial-in details
for the replay are as follows:
- U.S. Toll Free Number: 1 888 286 8010
- International dial-in number: +1 617 801 6888
Passcode: 36339192
FOREIGN CURRENCY CONVERSION
The conversion in this release of Renminbi into U.S. dollars is
made solely for the convenience of the reader, and is based on the
exchange rate as set forth in the H.10 statistical release of the
Federal Reserve Board as of September 30,
2010, which was RMB 6.6905 to
US$1.00. No representation is intended to imply that the
Renminbi amounts could have been, or could be, converted, realized
or settled into U.S. dollars at that rate on September 30, 2010 or at any other date. The
percentages stated in this press release are calculated based on
Renminbi amounts.
USE OF NON-GAAP FINANCIAL MEASURES
The Company has included in this press release certain non-GAAP
financial measures, including certain line items presented on the
basis that the accounting impact of the adoption of ASC 815-40 had
not been recorded. The Company believes that both management and
investors benefit from referring to these non-GAAP financial
measures in assessing the performance of the Company and when
planning and forecasting future periods. Readers are cautioned not
to view non-GAAP financial measures on a stand-alone basis or as a
substitute for GAAP measures, or as being comparable to results
reported or forecasted by other companies, and should refer to the
reconciliation of GAAP measures with non-GAAP measures also
included herein.
SAFE HARBOR STATEMENT
This press release contains forward-looking statements. These
statements constitute "forward-looking" statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
and as defined in the U.S. Private Securities Litigation Reform Act
of 1995. These forward-looking statements include 4Q and full-year
2010 estimates for PV product shipments, ASPs, production
capacities and other results of operations. Forward-looking
statements involve inherent risks and uncertainties and actual
results may differ materially from such estimates depending on
future events and other changes in business climate and market
conditions. Solarfun disclaims any obligation to update or correct
any forward-looking statements.
About Solarfun
Solarfun Power Holdings Ltd. (NASDAQ: SOLF) is a leading
manufacturer of solar PV cells and modules in China, focusing on
delivering high quality and reliable products at competitive
prices. Solarfun produces its monocrystalline and polycrystalline
products at its internationally certified, vertically-integrated
manufacturing facilities. Solarfun partners with third-party
distributors, OEM manufacturers, and system integrators to sell its
modules into large-scale utility, commercial and governmental, and
residential/small commercial markets. Solarfun maintains a strong
global presence with local staff throughout Europe, North
America, and Asia.
Solarfun embraces environmental responsibility and
sustainability by taking an active role in the photovoltaic cycle
voluntary recycling program.
(1) All non-GAAP numbers used in this press release
exclude the accounting impact from the adoption of ASC 815-40,
which relates to the accounting treatment for the convertible
bonds. Please refer to the attached financial statements for
the reconciliation between the GAAP and non-GAAP financial results.
For further
information, please contact:
|
|
|
|
Solarfun Power
Holdings Co., Ltd.
|
|
|
|
Investor Contact:
|
|
Paul Combs
|
|
V.P. Strategic Planning
|
|
Building 1, 18th Floor
|
|
1199 Minsheng Road, Shanghai, PRC
200135
|
|
P. R. China
|
|
Tel: 86-21-3852 1533 / Mobile: 86
138 1612 2768
|
|
E-mail:
paul.combs@solarfun-power.com
|
|
|
|
|
|
Christensen
|
|
|
|
Kathy Li
|
|
Tel: +1 480 614 3036
|
|
E-mail: kli@ChristensenIR.com
|
|
|
|
Tip Fleming
|
|
Tel: +852 9212 0684
|
|
E-mail:
tfleming@ChristensenIR.com
|
|
|
SOLARFUN
POWER HOLDINGS CO., LTD.
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
(Amounts in
thousands of Renminbi ("RMB") and U.S. dollars ("US$"),
|
|
except for
number of shares and per share data)
|
|
|
|
|
|
|
|
|
|
|
December
31
|
June
30
|
September
30
|
September
30
|
|
|
|
2009
|
2010
|
2010
|
2010
|
|
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
|
|
RMB
|
RMB
|
RMB
|
USD
|
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
645,720
|
885,442
|
1,296,734
|
193,817
|
|
Restricted cash
|
|
60,539
|
100,462
|
63,858
|
9,545
|
|
Derivative contracts
|
|
7,360
|
66,527
|
1,910
|
285
|
|
Accounts receivable,
net
|
|
587,488
|
828,939
|
1,289,932
|
192,800
|
|
Inventories, net
|
|
783,973
|
591,585
|
689,566
|
103,066
|
|
Advance to suppliers,
net
|
|
979,762
|
954,220
|
1,246,336
|
186,284
|
|
Other current assets
|
|
180,315
|
225,340
|
236,285
|
35,318
|
|
Deferred tax assets
|
|
63,115
|
60,402
|
75,734
|
11,320
|
|
Amount due from related
parties
|
|
12,458
|
96,220
|
-
|
-
|
|
Total current
assets
|
|
3,320,730
|
3,809,137
|
4,900,355
|
732,435
|
|
Non-current
assets
|
|
|
|
|
|
|
Fixed assets – net
|
|
1,586,283
|
1,764,560
|
1,829,395
|
273,432
|
|
Intangible assets –
net
|
|
208,563
|
207,949
|
206,856
|
30,918
|
|
Goodwill
|
|
134,735
|
134,735
|
134,735
|
20,138
|
|
Deferred tax assets
|
|
13,789
|
15,013
|
16,239
|
2,427
|
|
Long-term deferred
expenses
|
|
33,158
|
30,289
|
29,639
|
4,430
|
|
Total non-current
assets
|
|
1,976,528
|
2,152,546
|
2,216,864
|
331,345
|
|
TOTAL ASSETS
|
|
5,297,258
|
5,961,683
|
7,117,219
|
1,063,780
|
|
LIABILITIES
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Derivative contracts
|
|
1,148
|
739
|
70,605
|
10,553
|
|
Short-term bank
borrowings
|
|
404,764
|
530,985
|
748,010
|
111,802
|
|
Long-term bank borrowings,
current portion
|
|
90,000
|
175,000
|
202,500
|
30,267
|
|
Accounts payable
|
|
441,768
|
410,061
|
528,902
|
79,053
|
|
Notes payable
|
|
186,921
|
209,590
|
142,509
|
21,300
|
|
Accrued expenses and other
liabilities
|
|
191,895
|
270,674
|
356,860
|
53,338
|
|
Customer deposits
|
|
59,685
|
122,743
|
127,498
|
19,057
|
|
Deferred tax
liability
|
|
0
|
0
|
766
|
115
|
|
Unrecognized tax
benefit
|
|
27,385
|
27,385
|
27,385
|
4,093
|
|
Amount due to related
parties
|
|
16,765
|
59,578
|
13,767
|
2,058
|
|
Total current
liabilities
|
|
1,420,331
|
1,806,755
|
2,218,802
|
331,636
|
|
Non-current
liabilities
|
|
|
|
|
|
|
Long-term bank borrowings,
non-current portion
|
|
380,000
|
250,000
|
200,000
|
29,893
|
|
Convertible notes
payable
|
|
658,653
|
634,666
|
928,369
|
138,759
|
|
Long term payable
|
|
0
|
0
|
0
|
0
|
|
Deferred tax
liability
|
|
26,566
|
26,271
|
26,124
|
3,905
|
|
Total non-current
liabilities
|
|
1,065,219
|
910,937
|
1,154,493
|
172,557
|
|
TOTAL LIABILITIES
|
|
2,485,550
|
2,717,692
|
3,373,295
|
504,193
|
|
|
|
|
|
|
|
|
Redeemable ordinary
shares
|
|
55
|
55
|
55
|
8
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
Shareholders’
equity
|
|
|
|
|
|
|
Ordinary shares
|
|
227
|
227
|
252
|
38
|
|
Additional paid-in
capital
|
|
2,331,797
|
2,352,293
|
2,877,447
|
430,079
|
|
Statutory reserves
|
|
69,564
|
104,467
|
151,541
|
22,650
|
|
Retained earnings
|
|
410,065
|
786,949
|
714,629
|
106,812
|
|
Total shareholders’
equity
|
|
2,811,653
|
3,243,936
|
3,743,869
|
559,579
|
|
Noncontrolling
interest
|
|
0
|
0
|
0
|
0
|
|
TOTAL EQUITY
|
|
2,811,653
|
3,243,936
|
3,743,869
|
559,579
|
|
TOTAL LIABILITIES, MEZZANINE
EQUITY AND SHAREHOLDERS’ EQUITY
|
|
5,297,258
|
5,961,683
|
7,117,219
|
1,063,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOLARFUN
POWER HOLDINGS CO., LTD.
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(Amounts in
thousands of Renminbi ("RMB") and U.S. dollars ("US$"),
|
|
except for
number of shares and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
For the
three months ended
|
|
|
|
September
30
|
March
31
|
June
30
|
September
30
|
September
30
|
|
|
|
2009
|
2010
|
2010
|
2010
|
2010
|
|
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
|
|
RMB
|
RMB
|
RMB
|
RMB
|
USD
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
986,798
|
1,475,832
|
1,752,708
|
2,185,749
|
326,695
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
(782,399)
|
(1,203,334)
|
(1,383,868)
|
(1,689,393)
|
(252,506)
|
|
|
|
|
|
|
|
|
|
Gross profit /
(loss)
|
|
204,399
|
272,498
|
368,840
|
496,356
|
74,189
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Selling expenses
|
|
(24,806)
|
(29,481)
|
(39,238)
|
(44,195)
|
(6,606)
|
|
G&A expenses
|
|
(42,888)
|
(38,027)
|
(42,092)
|
(55,716)
|
(8,328)
|
|
R&D expenses
|
|
(7,324)
|
(15,916)
|
(18,290)
|
(4,672)
|
(698)
|
|
Total operating
expenses
|
|
(75,018)
|
(83,424)
|
(99,620)
|
(104,583)
|
(15,632)
|
|
Operating profit
(loss)
|
|
129,381
|
189,074
|
269,220
|
391,773
|
58,557
|
|
|
|
|
|
|
|
|
|
Interest expenses
|
|
(40,757)
|
(40,919)
|
(40,230)
|
(39,870)
|
(5,959)
|
|
Interest income
|
|
2,150
|
544
|
1,285
|
1,962
|
293
|
|
Exchange gain (loss)
|
|
8,139
|
(47,011)
|
(82,258)
|
76,220
|
11,392
|
|
Gain (loss) on change in fair
value of derivative
|
|
(27,466)
|
50,756
|
97,312
|
(108,042)
|
(16,149)
|
|
Gain (loss) on change in
conversion feature fair value of convertible bond
|
|
82,357
|
(2,505)
|
57,765
|
(279,228)
|
(41,735)
|
|
Other income
|
|
1,212
|
3,008
|
9,196
|
5,086
|
760
|
|
Other expenses
|
|
(1,903)
|
(1,996)
|
(484)
|
(1,291)
|
(193)
|
|
Government grant
|
|
1,957
|
9,365
|
13,195
|
3,669
|
548
|
|
Net income (loss) before income
tax
|
|
155,070
|
160,316
|
325,001
|
50,279
|
7,514
|
|
Income tax expenses
|
|
(18,117)
|
(21,367)
|
(52,163)
|
(75,525)
|
(11,288)
|
|
Net income (loss)
|
|
136,953
|
138,949
|
272,838
|
(25,246)
|
(3,774)
|
|
Net loss attributable to
non-controlling interest
|
|
331
|
0
|
0
|
0
|
0
|
|
Net income (loss)
attributable
|
|
|
|
|
|
|
|
to shareholders
|
|
136,622
|
138,949
|
272,838
|
(25,246)
|
(3,774)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share
|
|
|
|
|
|
|
|
Basic
|
|
0.51
|
0.48
|
0.94
|
(0.09)
|
(0.01)
|
|
Diluted
|
|
0.51
|
0.48
|
0.73
|
(0.09)
|
(0.01)
|
|
|
|
|
|
|
|
|
|
Shares used in
computation
|
|
|
|
|
|
|
|
Basic
|
|
270,304,495
|
289,674,891
|
289,851,889
|
296,202,329
|
296,202,329
|
|
Diluted
|
|
270,503,158
|
290,187,034
|
335,514,967
|
296,202,329
|
296,202,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
ADS
|
|
|
|
|
|
|
|
Basic
|
|
2.53
|
2.40
|
4.71
|
(0.43)
|
(0.06)
|
|
Diluted
|
|
2.53
|
2.39
|
3.63
|
(0.43)
|
(0.06)
|
|
|
|
|
|
|
|
|
|
ADSs used in
computation
|
|
|
|
|
|
|
|
Basic
|
|
54,060,899
|
57,934,978
|
57,970,378
|
59,240,466
|
59,240,466
|
|
Diluted
|
|
54,100,632
|
58,037,407
|
67,102,993
|
59,240,466
|
59,240,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
three months ended
|
|
For the
three months ended
|
|
|
September
30, 2009
|
|
June
30,
2010
|
|
September
30, 2010
|
|
September
30, 2010
|
|
|
(RMB million)
|
|
(RMB million)
|
|
(RMB million)
|
|
(US$ million)
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income/(loss)
|
68.2
|
|
231.7
|
|
273.7
|
|
40.9
|
|
|
|
|
|
|
|
|
|
|
Fair value changes of the
conversion features of the Convertible bonds
|
82.4
|
|
57.8
|
|
(279.2)
|
|
(41.7)
|
|
|
|
|
|
|
|
|
|
|
Accretion of interest of the
Convertible bonds
|
(14.0)
|
|
(16.7)
|
|
(19.7)
|
|
(2.9)
|
|
GAAP net
income/(loss)
|
136.6
|
|
272.8
|
|
(25.2)
|
|
(3.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
three months ended
|
|
For the
three months ended
|
|
|
September
30, 2009
|
|
June
30,
2010
|
|
September
30, 2010
|
|
September
30, 2010
|
|
|
(RMB)
|
|
(RMB)
|
|
(RMB)
|
|
(USD)
|
|
|
|
|
|
|
|
|
|
|
Non GAAP net income per ADS -
Basic
|
1.26
|
|
4.00
|
|
4.62
|
|
0.69
|
|
|
|
|
|
|
|
|
|
|
Fair value changes of the
conversion features of the Convertible bonds
|
1.52
|
|
1.00
|
|
(4.71)
|
|
(0.70)
|
|
|
|
|
|
|
|
|
|
|
Accretion of interest of the
Convertible bonds
|
(0.26)
|
|
(0.29)
|
|
(0.33)
|
|
(0.05)
|
|
Net profit contributed to
Solarfun Power Holdings Co., Ltd shareholders per ADS -
Basic
|
2.53
|
|
4.71
|
|
(0.43)
|
|
(0.06)
|
|
|
|
|
|
|
|
|
|
|
ADS (Basic)
|
54,060,899
|
|
57,970,378
|
|
59,240,466
|
|
59,240,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
three months ended
|
|
Annualized
for the 3rd
quarter of
2009
|
|
Annualized
for the 2nd
quarter of
2010
|
|
Annualized
for the
3rd quarter of
2010
|
|
|
September
30, 2009
|
|
June
30,
2010
|
|
September
30, 2010
|
|
September
30, 2009
|
|
June 30,
2010
|
|
September
30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Return on
Equity
|
3.34%
|
|
8.97%
|
|
8.82%
|
|
13.36%
|
|
35.88%
|
|
35.28%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value changes of the
conversion features of the Convertible bonds
|
2.43%
|
|
0.36%
|
|
-8.98%
|
|
9.70%
|
|
1.44%
|
|
-35.90%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accretion of interest of the
Convertible bonds
|
-0.54%
|
|
-0.54%
|
|
-0.56%
|
|
-2.14%
|
|
-2.16%
|
|
-2.26%
|
|
GAAP Return on equity
|
5.23%
|
|
8.79%
|
|
-0.72%
|
|
20.92%
|
|
35.16%
|
|
-2.88%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOLARFUN
POWER HOLDINGS CO., LTD.
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(Amounts in
thousands of Renminbi ("RMB") and U.S. dollars ("US$"),
|
|
except for
number of shares and per share data)
|
|
|
|
|
|
|
For three
months
ended
|
For three
months ended
|
|
|
|
|
September
30, 2009
|
June
30,
2010
|
September
30, 2010
|
September
30, 2010
|
|
|
|
|
RMB
|
RMB
|
RMB
|
USD
|
|
Cash flow from operating
activities
|
|
|
|
|
|
|
Net income (loss)
|
136,953
|
272,838
|
(25,246)
|
(3,774)
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net
income (loss) to net cash
|
|
|
|
|
|
|
|
provided (used) in operating
activities:
|
|
|
|
|
|
|
|
Unrealised financial
derivative
|
27,967
|
(19,644)
|
134,483
|
20,101
|
|
|
|
Loss from disposal of a
subsidiary
|
|
|
0
|
0
|
|
|
|
Amortization of convertible
bonds discount
|
12,946
|
14,693
|
14,475
|
2,164
|
|
|
|
Changes in fair value of
conversion feature of convertible bonds
|
(82,357)
|
(57,765)
|
279,228
|
41,735
|
|
|
|
Loss from disposal of fixed
assets
|
20
|
105
|
133
|
20
|
|
|
|
Depreciation and
amortization
|
41,403
|
44,900
|
48,064
|
7,184
|
|
|
|
Amortization of long-term
deferred expense
|
1,636
|
1,796
|
1,802
|
269
|
|
|
|
Provision for doubtful debt of
advance to suppliers
|
(1,954)
|
|
(46)
|
(7)
|
|
|
|
Reversal of doubtful debt for
accounts receivable
|
115
|
|
0
|
0
|
|
|
|
Write down of
inventory
|
71,971
|
19,881
|
41,498
|
6,203
|
|
|
|
Stock compensation
expense
|
9,855
|
7,492
|
10,586
|
1,582
|
|
|
|
Warranty provision
|
8,259
|
13,038
|
21,705
|
3,244
|
|
|
|
Deferred tax benefit
|
(4,421)
|
8,314
|
(15,939)
|
(2,382)
|
|
|
|
Unrecognized tax
benefit
|
268
|
0
|
0
|
0
|
|
|
Changes in operating assets and
liabilities
|
|
|
|
|
|
|
|
Restricted cash
|
(13,096)
|
(16,022)
|
37,044
|
5,537
|
|
|
|
Inventory
|
(184,643)
|
109,394
|
(139,479)
|
(20,847)
|
|
|
|
Account receivables
|
(193,022)
|
20,019
|
(460,992)
|
(68,902)
|
|
|
|
Advances to suppliers
|
51,984
|
41,322
|
(292,070)
|
(43,654)
|
|
|
|
Prepaid expense
|
34,770
|
(6,819)
|
52,510
|
7,848
|
|
|
|
Other current assets
|
58,464
|
5,898
|
(63,457)
|
(9,487)
|
|
|
|
Amount due from related
parties
|
(18,155)
|
(9,489)
|
96,219
|
14,381
|
|
|
|
Accounts payable
|
143,970
|
(80,216)
|
42,067
|
6,288
|
|
|
|
Accrued expenses and other
liabilities
|
33,950
|
44,919
|
64,461
|
9,635
|
|
|
|
Customer deposits
|
18,000
|
(18,683)
|
4,755
|
711
|
|
|
|
Amount due to related
parties
|
5,461
|
21,504
|
(45,811)
|
(6,847)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided (used) in
operating activities
|
160,344
|
417,475
|
(194,010)
|
(28,998)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
Acquisition of fixed
assets
|
(46,623)
|
(188,170)
|
(103,397)
|
(15,454)
|
|
|
|
Change of restricted
cash
|
142,308
|
(6,140)
|
(440)
|
(66)
|
|
|
|
Acquisition of intangible
assets
|
|
(140)
|
0
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided (used) in
investing activities
|
95,685
|
(194,450)
|
(103,837)
|
(15,520)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
Proceeds from share lending
arrangement with Hanwha
|
|
|
21
|
3
|
|
|
|
Proceeds from exercise of stock
option
|
|
751
|
4,263
|
637
|
|
|
|
Proceeds from issuance of
ordinary shares
|
78,607
|
|
510,330
|
76,277
|
|
|
|
Proceeds from short-term bank
borrowings
|
631,564
|
97,143
|
460,713
|
68,861
|
|
|
|
Payment of short term bank
borrowings
|
(1,011,840)
|
(349,290)
|
(243,688)
|
(36,423)
|
|
|
|
Proceeds from long term bank
borrowings
|
300,000
|
0
|
0
|
0
|
|
|
|
Payment for long term bank
borrowings
|
(7,500)
|
(22,500)
|
(22,500)
|
(3,363)
|
|
|
|
Utilization of notes
payables
|
51,586
|
|
0
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided (used) by
financing activities
|
42,417
|
(273,896)
|
709,139
|
105,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
and cash equivalents
|
298,446
|
(50,871)
|
411,292
|
61,474
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the
beginning of period
|
494,740
|
936,313
|
885,442
|
132,343
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the
end of period
|
793,186
|
885,442
|
1,296,734
|
193,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash
flow information:
|
|
|
|
|
|
|
Interest paid
|
100,412
|
13,731
|
31,438
|
4,699
|
|
|
Income tax paid
|
|
31,542
|
41,589
|
6,216
|
|
|
Realized gain from derivative
contracts
|
503
|
77,668
|
26,443
|
3,952
|
|
Supplemental schedule of
non-cash activities:
|
|
|
|
|
|
|
Acquisition of fixed assets
included in accounts payable, accrued expenses and other
liabilities
|
33,702
|
16,332
|
9,694
|
1,449
|
|
|
Conversion of CB into ordinary
shares
|
|
|
|
|
|
|
Transfer of unamortized debt
issuance costs to equity
|
|
|
|
|
|
|
|
upon conversion of CB into
ordinary shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Solarfun Power Holdings Co., Ltd.