Trina Solar beats guidance with 1,026MW module shipment

It also reported good 1Q15 NPAT.

Trina Solar reported clean 1Q15 NPAT of US$15.6m, beating consensus estimates.

According to a research note from Jefferies, the company shipped 1,026MW of modules, exceeding its guidance.

More importantly, the company cost reduction more than offset the decline in module ASPs, leading to 230bps QoQ expansion in gross margin.

Here's more from Jefferies:

1Q15 Highlights: The company shipped 1,026MW of modules in the first quarter, exceeding its guidance of 840-870MW announced in March, while realizing an ASP of US$0.60.

Revenues of US$558m, +26% YoY, -21% QoQ, was 4% above our estimates driven by higher shipments. Gross margin expanded by 230bps QoQ to 18.0% as the overall module production cost fell to US$0.50/W vs. US$52/W in 4Q15, offsetting the 1 cent decline in ASP.

However, higher SG&A and interest expenses as well as FX losses offset the better than expected gross profit. Moreover, non-controlling interest from the module business was higher than expected. If we exclude the FX losses, clean NPAT of US$15.6m beat consensus estimates but was below our estimate.

Improvement in shipment mix. The company has lowered its exposure to China by increasing shipments to Europe, Japan and the US (higher ASP regions). The company expect full year shipment mix of China to decrease from 35% to 28% while increasing shipments to the US, Europe and ROA.

2015 Outlook. The company is confident that it can maintain the high gross margin by further cost reduction while ASP may face downward pressure.

It is guiding 1,100-1,140MW of module shipments including 150-170MW of internal shipments for 2Q15. For the full year, the company reiterated its target of 4.4GW and 4.6GW of module shipments including 700-800MW of internal shipments.

The company expects to connect 700-750MW of downstream projects with around 65-70MW, 300MW and 325MW to be connected in 2Q, 3Q and 4Q15, respectively.

We are revising down our 2015 NPAT estimates by 15% to reflect higher than expected non-controlling interests from the module business.

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