(Yicai) Aug. 22 -- China’s Tongwei Group said profit rose 8.6 percent in the first half from a year earlier despite tumbling polysilicon material prices. The world’s largest producer of solar silicon also revealed plans to build two new plants to make high-efficiency solar batteries.

Net profit was CNY13.3 billion (USD1.83 billion) in the six months ended June 30, the Chengdu-based firm said in a semi-annual earnings report yesterday. Revenue jumped 23 percent to CNY74.1 billion, with 80 percent coming from its photovoltaic business. Tongwei also noted that it cut the cost of making a ton of polysilicon to less than CNY48,000 (USD6,669).

Tongwei's earnings performance slowed last quarter from the first three months of this year as polysilicon material prices plunged. First-quarter net profit soared 66 percent to CNY8.6 billion (USD1.2 billion), while revenue rose 35 percent to CNY33.2 billion, according to the results it published in April.

Shares of Tongwei [SHA: 600438] dipped 0.5 percent to close at CNY31.50 (USD4.33) each today, while the broader Shanghai market climbed 0.9 percent. Tumbling silicon material prices have weighed on the stock, which has halved in value since reaching a record high early in July last year.

Silicon materials cost at about CNY70,000 per ton at the end of June, down from CNY240,100 (USD33,000) early this year, after much new capacity came on stream, according to data from China Nonferrous Metals Industry Association.

Still, Tongwei’s first-half earnings were better than those of its main rivals as their net profits fell on the sharp drop in main product prices, with Xinjiang Daqo New Energy reporting a 54 percent decline from a year ago, while its revenue sank 43 percent. Xinte Energy's net profit fell 15.3 percent, even though the firm’s revenue jumped 19.5 percent.

Early investment downstream enabled Tongwei to offset the drag on earnings from lower silicon material prices. As of the end of June, it has not only built a high-purity polysilicon annual capacity of 420,000 tons to remain a global leader, but also had an annual production capacity of 90 gigawatts of solar battery and 55 GW of solar panels, the firm pointed out.

In a separate announcement yesterday, Tongwei also said it plans to build two new plants to make high-efficiency solar cells in Leshan, Sichuan province, at a cost of CNY20 billion (USD2.8 billion).

Each will have an annual capacity of 16 GW and make various products, including silicon rods, silicon wafers, and cells, the firm said. They are expected to become operational by the end of next year and reach capacity a year later, it added.

Editor: Martin Kadiev