(Yicai) March 15 -- China's Drinda New Energy Technology intends to start tightening its belt after the maker of solar cells and automotive parts recorded a 16 percent jump in net profit last year, mainly due to government subsidies.

Drinda earned CNY832 million (USD115 million) in annual net profit, almost a fifth more than in 2022, while revenue surged by 59 percent to CNY18.4 billion (USD2.6 billion), the Haikou-based firm announced yesterday. Government subsidies make up more than 40 percent of the profit.

The firm is cutting its expenses as it predicted that the cost of its major product, tunnel oxide passivated contact cells, will drop by more than CNY0.02 (30 US cents) per watt by December. Drinda had a capacity of about 40 gigawatts of TOPCon cells last year and 9.5 GW of P-type passivated emitter and rear cells last year.

In the fourth quarter, when excluding nonrecurring items, Drinda's core business logged a net loss of CNY1 billion (USD139 million) because the end of the year is an off-season for installing photovoltaic equipment and the profitability of the P-type cells is poor, it said.

The next move is slowing down expansion and eyeing overseas markets. Drinda’s PV subsidiary Jietai New Energy Technology plans to widen its production capacity by 5 GW to 15 GW by setting up a factory in the Middle East or Southeast Asia.

Jietai basically has no inventory of PV cells, the parent said, predicting that the PV market will start to pick up this month and that the firm will increase its gains in the second quarter from the first quarter.

Jietai's shipments of solar cells ranked No. 4 globally last year and the firm was the No. 1 in terms of shipments of N-type cells, according to InfoLink Consulting.

Drinda's stock price [SHE: 002865] closed 0.6 percent higher at CNY74.41 (USD10) today.

Editor: Emmi Laine