(Yicai) Aug. 3 -- Shares of Longi Green Energy Technology jumped after the world’s largest supplier of solar wafers and panels said net profit climbed nearly 42 percent in the first half of the year thanks to lower raw material prices and increased product shipments.

Longi [SHA: 601012] ended 6.1 percent up at CNY30.85 (USD4.29) a share today. The benchmark Shanghai Composite Index rose 0.6 percent.

Net profit stood at CNY9.2 billion (USD1.3 billion) in the six months ended June 30, Xi’an-based Longi said in an unaudited first-half earnings report published late yesterday. Operating revenue jumped 28 percent to CNY64.7 billion (USD9 billion).

Longi attributed the gain to a wider gross profit margin at its solar panels business after prices of polycrystalline silicon and wafer products in the upstream industry tumbled, and a jump in shipments of solar silicon wafers and modules from a year earlier after new plants came on stream. Higher returns on investment and an exchange rate gain also contributed.

After revenue soared 52 percent and net profit 37 percent in the first quarter, income growth slowed while profit growth quickened in the second quarter. A big drop in silicon wafer prices, the firm’s main product, is why operating revenue rose more slowly.

Longi targets operating revenue of CNY160 billion (USD22.3 billion) this year, its 2022 earnings report showed, so it needs to be much higher in the second half to achieve that.

Market prices for polycrystalline silicon and silicon wafers tumbled thanks to the start of some new production capacity in the first half, which benefited Longi by reducing production costs significantly but also shaved the margins on its wafer business.

More than 600,000 tons of polycrystalline silicon were produced in China in the first six months, a more than 65 percent jump from a year earlier, data from the China Photovoltaic Industry Association showed last month. Silicon wafer output surged 63 percent to more than 250 gigawatts, that of batteries rose over 62 percent to more than 220 GW, and that of modules soared in excess of 60 percent to more than 220 GW.

Longi did not disclose its total first-half production capacity, but according to its 2022 earnings report, it expects its annual capacity to turn out monocrystalline silicon wafers to jump to 190 GW by the end of this year from 133 GW at the end of 2022, while battery output should reach 110 GW from 50 GW, and modules 130 GW from 85 GW. It aims to ship 130 GW of monocrystalline silicon wafers, 85 GW of batteries, and 85 GW of modules this year.

Editor: Martin Kadiev