Solar wafer manufacturer LDK Solar has a strong order book for 2011 as global demand remains strong and is likely to revise up its full-year revenue target.
Chairman and chief executive Peng Xiaofeng, 35, one of the world’s youngest billionaires, told Reuters in a telephone interview on Thursday that sales to China would reach 50 percent of its total in the next two years from 30 percent.
The Nasdaq-listed solar company is eyeing expansion in core markets such as Canada, the United States and Europe as well as Africa and India.
“In 2011 the market is very bullish and we have received a lot of orders especially in the first half of the year. Demand is very strong across the world,” Peng said.
LDK Solar raised its outlook for third quarter revenue and wafer shipments on the back of strong demand for solar power products in October.
The vertically integrated manufacturer is one of the world’s largest manufacturers of solar wafers, and also sells products including solar modules, solar materials and wafer processing services.
Analysts are cautious that slowing demand as a result of a less government spending in the sector could trigger a price slump in 2011 similar to that of last year when cell and module prices fell up to 50 percent, throwing the sector into crisis.
LDK’s rivals have also expressed confidence on the outlook.
Cheaper manufacturing costs have allowed Chinese solar companies such as JA Solar and Yingli Green Energy to parlay their low cost structures into sales.
But an appreciating yuan, which has risen nearly 3 percent against the dollar since mid-June, is putting pressure on an average discount margin of up to 20 percent.
A small percentage appreciation in China’s currency, known as the renminbi, would be manageable, Peng said.
“Of course if it is a huge difference it will be a big, big problem for the whole industry, but small should be workable. Of course we are working on that, trying to lower costs to meet this challenge,” he said.
Domestic market
Peng, nicknamed Light for his interest in optics, said demand from China as a consumer of solar products would continue to grow.
“The percentage of sales in China should increase in the future. I think in future our local sales for wafer and module products will reach 50 percent within the next few years.”
China, the world’s largest producer and consumer of coal, is plowing billions of dollars into renewable energy such as nuclear, hydropower and solar, and has extended credit guarantees to several solar companies, including $9 billion for LDK Solar earlier this year.
LDK Solar’s headquarters are based in Jiangxi province in southern China, and it has offices in Asia, Europe and North America.
“I live on an airplane,” Peng, an avid swimmer, said.
The company’s share price, which has gained 57 percent since the start of this year, is highly volatile. On Tuesday, it plunged 14 percent after China unexpectedly raised interest rates. Its shares closed at $11.03 on Wednesday.
