Xinyi plans CNY 300 million PV glass plant

Xinyi Glass Holdings, the largest exporter of auto glass by volume in China, will invest CNY 300 million (HKD 290.46 million) in a new plant to make ultra-clear photovoltaic (PV) glass products in ord…

Xinyi Glass Holdings, the largest exporter of auto glass by volume in China, will invest CNY 300 million (HKD 290.46 million) in a new plant to make ultra-clear photovoltaic (PV) glass products in order to diversify its product range. Xinyi, which raised HKD 836 million when it went public in February 2005, said it may fund the investment by selling new shares if “capital-market conditions permit”. The expected size of the share sale will not exceed 5% of the firm“s issued share capital, Xinyi said. “We intend to use internal resources or banking facilities as the major source for the new project, as our net debt gearing ratio is only 11%,” said chief executive Tung Chingsai, adding that the company has a more than HKD 800 million credit line. The new plant will be located in Dongguan in Guangdong and is expected to start trial production in the 3Q of 2006. It will have an annual capacity of 100,000 tons. Ultra-clear PV glass is mainly used as the transparent cover on solar panels as well as other industrial applications, such as glass canopies and interior applications. Worldwide demand for ultra-clear PV glass products is expected to rise to more than 500,000 tons by 2010, from 180,000 tons in 2005. “Demand for ultra-clear photovoltaic glass products for the construction glass market is expected to soar amid the increasing awareness of the importance of environmental protection”, Tung said. He said the profit margin on ultra-clear PV glass products is more than 50%, compared to Xinyi“s average gross profit margin of 36%. The new project will start to contribute profits to the company in the 4Q 2007. Xinyi posted a net profit of HKD 260 million 2005, up 10.3% from HKD 236 million a year earlier. Turnover jumped 34% to HKD 1.38 billion.