Sunshine Power: EPC as scheduled, in line with expectations, rather than-expected

Company Announcement : According to October 8, 2012 between the Company and Sanyang Jiuquan Jiuquan sunrise and signed 100MW of 900 million yuan ( tax included ) power plant EPC contract provides for a capital increase agreement , Jiuquan Jiuquan Sanyang sunrise and May 3, 2013 days to complete business registration change registration , no longer is the company's wholly owned subsidiary. The two companies each hold a 10% stake.

The contract for the EPC contract, the actual results contribute not only to a more limited ( expected net profit contribution of 50 million ) , and is expected within : Although the contract does not include taxes of approximately 800 million yuan , accounting for the company by the year 2012 audit 74% of revenue , but the implementation of the performance level, we estimate the contribution of net profit for 2013 of about 50 million or so. This contract is the completion of the equity transfer of the capital increase is in line with the terms of EPC project is expected to exceed expectations rather than within .

Profitability in the inverter 's judgment , we insist that the prices will not rebound but will decline, but prices fell gradually synchronous speed at lower costs , gross margin stabilized : the PV inverter price competition need to have full understanding of property as anasset-light inverter assembly manufacturing is difficult to form a similarasset-heavy upstream polysilicon price elasticity .

We have the cash and cost advantages that companies will not easily relax and let the market share price in the short term is difficult to see the inverter gridtiepowerinverteronline price trend rally. But the rapid decline in profitability period has expired , the future rate of decline in prices will gradually return to synchronous speed at lower costs . We expect the gross margin decline this year compared to last year narrowed substantially .

After last year's R & D and sales expansion , and complete the equity incentive this year, the expense ratio is expected to shrink a certain extent : Last year, the company increased sales and R & D , sales and administrative expense ratio increased by 2 percentage points each . From this point of view , we believe that the absolute value of sales and administrative expenses will remain stable, thus the management expense ratio and sales rate will decline.