Suntech Reports Fourth Quarter and Full Year 2006 Financial Results

Suntech Reports Fourth Quarter and Full Year 2006 Financial Results

March 14, 2007

    WUXI, China, March 14 /Xinhua-PRNewswire/ -- Suntech
Power Holdings Co., Ltd. (NYSE: STP), one of the world's
leading manufacturers of photovoltaic (PV) cells and
modules, today announced fourth quarter and full year 2006
financial results. 

    (Logo: http://www.xprn.com.cn/xprn/sa/200611091225.jpg
)

    Fourth Quarter and Full Year 2006 Highlights

    -- Fourth quarter 2006 total net revenues went up
144.8% 
       year-over-year to $217.9 million. Non-GAAP  Suntech

       Group net income attributable to holders of ordinary

       shares grew 101.4% year-over-year to $35.5 million,

       or $0.23 per non-GAAP(*) diluted American Depository

       Share (ADS). Each ADS represents one ordinary
share.

    -- Fourth quarter 2006 production output was 55.3MW;
full 
       year 2006 production output was 160.1MW,
representing 
       136.5% year-over-year growth.

    -- Full year 2006 total net revenues went up 165.0% 
       year-over-year to $598.9 million. Suntech Group net

       income attributable to holders of ordinary shares 
       grew 275.6% year-over-year to $106.0 million, or 
       $0.68 per diluted ADS.

    -- Annual capacity grew from 150MW at the end of 2005
to 
       270MW at the end of 2006, representing an increase
of 
       80%.
  
    * All non-GAAP measures exclude share-based
compensation expenses and the amortization expenses
incurred from purchase price allocation related to the
acquisition of MSK Corporation as of August 11, 2006.  For
further details on non-GAAP measures, please refer to the
reconciliation table and a detailed discussion of
management's use of non-GAAP information below.

    "We exceeded our initial fourth quarter output and
revenue guidance for our core business as we increased our
sales of PV modules, achieved sequential average selling
price increases throughout 2006 and ramped up recently
installed production lines ahead of schedule," said
Dr. Zhengrong Shi, Suntech's Chairman and CEO. "Our
operations are the healthiest they have been since our IPO
as our low cost per watt strategy combined with our strong
technology capabilities, expanding sales network and
successful silicon procurement keep us on track to achieve
industry leading growth."

    "During the quarter, we cemented our silicon
supply for 2007 and beyond by signing additional long term,
fixed price silicon supply agreements. In fact, we have
secured more silicon than we require to meet our upwardly
revised projected 2007 PV cell and module output
target," said Dr. Shi. "This ability to secure
silicon, despite the global shortage, is one of the key
reasons we have been able to increase our 2007 production
output target from 250 megawatts to 280 megawatts and our
year-end capacity target from 390 megawatts to 420
megawatts."

    Commenting on Suntech's international sales
development, Dr. Shi said, "In the fourth quarter, we
continued to diversify our sales geographically and
extended the reach of our global network. In addition to
partnering with SunEdison, we continued to build momentum
in the U.S. market and our current pipeline indicates that
we will be able to more than triple our sales to this
region in 2007. With the integration of MSK's sales network
and the establishment of Suntech Europe, we have set the
foundation to further expand our selling channels in key
European markets such as Spain." 

    Recent Business Highlights   

    -- In February 2007, Suntech closed an offering of $500

       million convertible senior notes, more than 60%
above 
       the original offering size. Suntech plans to use the

       net proceeds to expand production capacity, procure

       raw materials, repay a bridge loan related to the
MSK 
       acquisition and for other corporate purposes. 

    -- Multi-year silicon supply agreements were entered
into 
       with REC, Comtec and Sunlight Group in the fourth 
       quarter of 2006. Combined with existing agreements
with 
       MEMC and several leading China-based silicon
suppliers, 
       Suntech expects over two-thirds of silicon supply in
2007 
       needed for its projected output will come from 
long-term 
       silicon supply agreements, which will ramp up over
the 
       year and have average wafer costs measurably below
2006 
       wafer purchase prices. 

    -- After winning the contract to supply over 23MW of
solar 
       modules to the world's largest solar farm in Spain,

       Suntech continued to achieve steady sales wins in
Spain. 
       In the fourth quarter of 2006, Suntech sales to
Spain 
       increased four-fold above the nearly 10% of total
revenues 
       in the first nine months of 2006 and it is currently

       expected that it will grow to be approximately 20%
of 
       total revenues in 2007.  

    -- In February 2007, Suntech made the strategic
decision to 
       halt MSK's module production activities in Japan and

       initiated immediate actions to focus MSK on its
three 
       strategic goals. MSK will concentrate efforts on
BIPV 
       product development and expanding BIPV sales into
key 
       geographies beyond Japan, growing Japan-based sales
and 
       utilizing MSK's sales organization to expand
Suntech's 
       customer base.

    -- Suntech recently entered into multiple sales
agreements 
       with Conergy AG, a leading global solar system
integrator, 
       to supply PV modules with a value of approximately
$270 
       million in 2007. 

    -- Suntech established Suntech Europe in January as
part of 
       a natural evolution to expand its customer base as
well 
       as to deepen the service and support offered to its

       customers in Europe, the Middle East and Africa
(EMEA). 
       The headquarters for Suntech Europe will be in
London with
       sales offices expected to be opened in key cities in
the 
       region commencing in 2007. 

    -- Suntech recently joined the Global Roundtable on
Climate 
       Change (GROCC) to raise the profile of solar energy
and 
       encourage governments worldwide to develop effective

       policies on climate change. 

    Suntech Group Consolidated Results for the Full Year
2006 Including MSK

    Suntech Group's net revenues for the full year 2006
were $598.9 million, an increase of 165.0% year-over-year.
For the full year 2006, Suntech Group derived approximately
20.8 % of total net revenues from sales of PV cells and
78.8% from PV modules. 

    Gross profit for the full year 2006 was $148.9 million,
an increase of 117.2% over the full year 2005.  Gross margin
decreased to 24.9% in 2006 from 30.3% in 2005. Suntech
Group's income from operations for the full year 2006 was
$103.2 million, an increase of 142.0% year-over-year.
Operating margin was 17.2% in 2006, down from 18.9% in
2005. Net income attributable to holders of ordinary shares
for the full year 2006 was $106.0 million, an increase of
275.6% from 2005. Diluted income per ADS was $0.68 in 2006,
compared to $0.26 in 2005. 

    Capital expenditures were $52.3 million in the full
year 2006. Depreciation and amortization expenses in the
full year 2006 were $11.9 million.

    As of December 31, 2006, Suntech had cash and cash
equivalents of $225.5 million compared with $314.2 million
at the end of the third quarter of 2006.  Short term debt
rose to $288.2 million at the end of the fourth quarter of
2006 from $221.7 million at the end of the third quarter of
2006, primarily as a result of continuous leverage of
banking facility to support expanding production scale and
capital expenditures and cash flow management needs related
to PRC foreign currency controls. 

    Outlook for First Quarter and Full Year 2007

    Based on current operating and other conditions,
Suntech expects its first quarter 2007 total production
output, including contribution from MSK, to be in the
estimated range of 60MW to 62MW and its total net revenues
to be in the estimated range of $220 million to $228
million.  

    As the Company will have carryover spot market priced
silicon supply from 2006 and as its silicon supply from its
long term supply contracts will not become a majority of its
silicon supply until the second quarter of 2007, the Company
will likely have a slight decline in the gross margin in its
core business in the first quarter of 2007 with
stabilization and improvement expected in the gross margin
of its core business thereafter.

    Such guidance takes into account the assumption that
Suntech's total PV cell production capacity will remain
constant at 270MW until the second quarter of 2007 when
additional capacity is expected to become operational. In
addition, the first quarter 2007 guidance also takes into
account the shorter month of February and the Chinese New
Year holiday.  

    Suntech has increased its total PV cell production
output target for 2007 from 250MW to 280MW.  This target
takes into account third party PV cell purchases originally
contracted by MSK. Suntech has also raised its expected 2007
year end PV cell production capacity target from 390MW to
420MW. 

    Suntech expects capital expenditures for the full year
2007 to be in the estimated range of $80 to $100 million. 

    Given the accelerated integration between Suntech and
MSK's business operations, Suntech will not continue to
report separate results or give separate guidance for MSK
in the future.

    About Suntech

    Suntech Power Holdings Co., Ltd. is a leading solar
energy company in the world as measured by both production
output and capacity of solar cells and modules. Suntech
provides solar solutions for a green future. Suntech
designs, develops, manufactures, and markets a variety of
high quality, cost effective and environmentally friendly
PV cells and modules for electric power applications in the
residential, commercial, industrial, and public utility
sectors. Suntech's majority-owned subsidiary, MSK
Corporation is a pioneer within the higher value-added
building-integrated photovoltaics (BIPV) space. Suntech's
customers are located in various markets worldwide,
including key markets throughout Europe, Japan, China and
the United States. For more information, please visit 
http://www.suntech-power.com .

    Safe Harbor Statement 

    This press release contains forward-looking statements.
These statements constitute "forward-looking"
statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and as defined
in the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology suchas "will," "expects,"
"anticipates," 
"future," "intends," "plans,"
"believes," "estimates" and similar
statements.  In particular, the projected first quarter and
fiscal year 2007 data, regarding production output, total
net revenues and consolidated net income, core business
gross margin, the business outlook and quotations from
management in this announcement, statements regarding
Suntech's beliefs and expectations about integrating the
business and operations of MSK Corporation and the
resulting synergies and benefits, as well as Suntech's
strategic and operational plans, are forward-looking
statements.  Forward-looking statements involve certain
risks and uncertainties that could cause actual results to
differ materially from those in the forward-looking
statements. Further information regarding these and other
risks is included in Suntech's filings with the U.S.
Securities and Exchange Commission, including its Annual
Report on Form 20-F. Suntech does not undertake any
obligation to update any forward-looking statement as a
result of new information, future events or otherwise,
except as required under applicable law.  

    About Non-GAAP Financial Measures 

    To supplement its consolidated financial results
presented in accordance with GAAP, Suntech uses the
following non-GAAP measures which are adjusted from the
most directly comparable GAAP results to exclude items
related to share-based compensation and the purchase price
allocation effect related to the MSK Corporation
acquisition. Management believes these non-GAAP measures
are useful to investors in enabling them to better assess
changes in Suntech's core business across different
reporting periods on a consistent basis, independently of
stock-based compensation expenses and the purchase price
allocation effect related to the MSK acquisition. Thus, the
non-GAAP financial measures provide investors with another
method for assessing Suntech's operating results in a
manner that is focused on the performance of its ongoing
operations. Management also uses these non-GAAP measures
internally to make an apples-to-apples comparison of the
business and financial performances of current and
historical results, for strategic decision making,
forecasting future results and evaluating the Company's
current performance.  Many analysts covering Suntech use
the non-GAAP measures as well. These non-GAAP measures are
not in accordance with or an alternative for GAAP financial
data, the non-GAAP results should be reviewed together with
the GAAP results and are not intended to serve as a
substitute for results under GAAP, and may be different
from non-GAAP measures used by other companies. For more
information on these non-GAAP financial measures, please
see the tables captioned "Reconciliations of non-GAAP
results of operations measures to the nearest comparable
GAAP measures" set forth at the end of this release
and which shall be read together with the preceding
financial statements prepared under GAAP.


    For more information, please contact:

     Steven Chan
     VP of Business Development
     Suntech Power Holdings Co., Ltd.
     Tel:   [phone]
     Email: [e-mail]

    In the United States:
     E.E. Wang
     The Piacente Group, Inc.
     Tel:   [phone]
     Email: [e-mail]

    In China:
     Rory Macpherson
     Ogilvy Public Relations Worldwide
     Tel:   [phone]
     Email: [e-mail]