(Yicai Global) July 5 -- Tongwei’s shares soared to the highest ever after the Chinese solar polysilicon giant predicted net profit to have at least quadrupled in the first half from a year earlier, mainly because of the increase in solar high-purity polysilicon products.

Tongwei [SHA: 600438] closed 3.2 percent up at CNY67.75 (USD10.12). The stock has nearly doubled since April 25.

Net profit likely rose 304.6 percent to 321.5 percent to between CNY12 billion and CNY12.5 billion (USD1.8 billion and USD1.9 billion) in the six months ended June 30 from the same period a year ago, the Chengdu, Sichuan province-based company said in a statement yesterday.

Since Tongwei’s first quarter net profit was CNY5.2 billion (USD777 million), according to data the company released earlier, the latest first half data imply that its second quarter net profit was rising to around CNY7 billion, quite close to the CNY8.2 billion net profit it recorded in whole year 2021.

The sharp rise in the price of polysilicon is the main reason behind the leap in Tongwei’s performance. Polycrystalline silicon prices jumped to between CNY280,000  and CNY290,000 (USD41,800 and USD43,300) per ton last week, compared with CNY134,000 in June and nearly CNY70,000 (USD10,450) at the beginning of 2021, according to data published by the silicon industry division of the China Nonferrous Metals Industry Association on June 29.

Tongwei’s capacity also improved in the first half from a year earlier. Its high-purity silicon output topped the world last year, taking a domestic market share of 22 percent, according to data from the China Photovoltaic Industry Association. At the end of 2021, it had an annual capacity of high-purity silicon of 180,000 tons, but with the new capacity expansions to be completed by the end of next year, the amount will almost double to 350,000 tons.

Tongwei signed long-term supply agreements with five big customers in the past three months, four of which were in June alone. The total value of the deals reached CNY254 billion (USD37.9 billion). This means that Tongwei’s polysilicon products will continue to be popular in the market over the next few years.

Editor: Futura Costaglione