(Bloomberg) -- Longi Green Energy Technology Co., the world's largest solar manufacturer, reported higher first-half profits supported by stronger production and a growing market outside its domestic base in China.
Overseas operations accounted for almost half of Longi's revenue, up from 38% in the same period a year earlier, with new markets emerging in India, Brazil and Chile to add to continued strong demand from regions including Europe, the U.S., and Australia, the Xi'an-based manufacturer said Monday in a statement.
Net income rose 21% to 4.99 billion yuan ($771 million) in the first six months, while solar module production jumped 149% on a year ago to 19.93 gigawatts, the company said.
Solar supply chains are being shaken by efforts by the U.S. and allies to act against allegations of human-rights abuses in China's Xinjiang region, the world's key source of polysilicon used in the production of panels. Multiple Chinese producers have had components detained at U.S. ports under a Biden administration ban on imports with links to a specific raw material supplier.
Read more: Escalating U.S.-China Solar Rift Threatens Biden Green Goals
“Although the company has taken measures including deploying overseas production capacity to avoid relevant trade barriers, there are still uncertainties and risks brought by the rigorous international trade barriers and policies,” Longi said. The producer has declined to say whether it has been impacted directly by the U.S. ban.
Longi's gross profit margin fell slightly to about 23%, the company said. Producers have grappled with higher costs of polysilicon and passed on some of those costs. Panel prices rose as much as 20% earlier in the year due to the spike in raw materials, though have since eased.
Shortages of raw materials including polysilicon contributed to the company not producing at full capacity in the first half, even as it lifted output, the statement said.
The producer is lifting spending on research and development by about 50% to 1.6 billion yuan as the sector makes a new push to deliver improvements to solar technology.
(A previous version of this story corrected attribution in sixth paragraph.)
©2021 Bloomberg L.P.
With assistance from Bloomberg
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
