[odyd 1,301]

ZURICH, Switzerland and BAODING, China, Oct. 22, 2012 /PRNewswire-FirstCall/ -- Yingli Green Energy Holding Company Limited (NYSE: YGE) ("Yingli Green Energy" or the "Company"), a leading solar energy company and one of the world's largest vertically integrated photovoltaic ("PV") manufacturers, which markets its products under the brand "Yingli Solar</person>", today successfully completed its Fifth Annual Customer Conference at the Home of FIFA, the Company's partner in developing a greener world through the passion of football, in Zurich, Switzerland. Yingli Green Energy was the first Chinese and the first renewable energy company in history to sponsor the FIFA World Cup™ in 2010 and 2014. Approximately 200 customers, partners and representatives from renowned international research institutes have joined the event in Zurich, the Swiss city located in the heart of Europe. The conference was opened by a welcome speech from Mr. Joseph S. Blatter</person>, President of FIFA, who attended the conference together with Mr. Thierry Weil</person>, FIFA Director of Marketing. Keynote speeches from Yingli Green Energy's Senior Vice President, Mr. Zhiheng Zhao</person>, Executive Director and Chief Financial Officer, Mr. Bryan Li</person> and Chief Strategy Officer, Mr. Yiyu Wang</person> followed. "We are honored that Yingli was able to host such an important event at the Home of FIFA. Yingli Solar</person> is a leader in the renewable industry and we are proud that Yingli is part of our family. Yingli did not only bring forth the knowledge of renewable energy to FIFA, but also to the world of football. Football is the largest and most popular sport in the world. Together with our passion for football and responsibility towards the environment, we are able to create a better and more sustainable future", said Mr. Joseph S. Blatter</person>, President of FIFA. "The solar industry is now at a critical turning point which will determine its long-term prosperity. We as a leading solar player are very well positioned to weather the headwinds. Our success demonstrates the attractiveness of our value proposition, brand reputation, strong partnerships and highly motivated employees. This year, we have become the global leader as measured by module shipment volume and we are confident to maintain this upward trend," said Mr. Zhiheng Zhao</person>, Senior Vice President of Yingli Green Energy. "Regardless of the current disruptions and building on the trust we have established with our long-term customers and partners, Yingli Green Energy has always proven to be able to come out as a winner in a highly competitive market. We are very proud to say that there is now more than 4.5 GW of Yingli Solar</person> modules installed worldwide in 38 countries. We remain confident to be able to continuously differentiate ourselves and be the supplier of choice to our committed partners," said Mr. Yiyu Wang</person>, Chief Strategy Officer of Yingli Green Energy. "We successfully navigated the policy uncertainty here in Europe and are working closely together with our customers on strategies to tackle new markets even beyond public incentives. It goes without saying that the anti-dumping and anti-subsidy complaint filed at the EU commission in July and September this year has cast a shadow on the European solar industry. However, we retain our optimism that Europe will remain a significant market for Yingli Green Energy, given the rapid reduction in the cost of solar deployment, electricity price inflation and the 2020 climate targets," said Darren Thompson</person>, Managing Director of Yingli Green Energy International AG.

[odyd 1,301]

Yingli is the third company after Trina and Renesola in 24 hours to release a note about Singapore http://en.prnasia.com/pr/2012/10/24/US201210CN9908211.shtml It seems a lot of the activities is foreseen for those regions.

[odyd 1,301]

They are talking about 17% drop from 15% in Q2, so I am happy surprised it was not worse. But I am not getting this, would those reversal of duties have an positive impact not a negative one? "In addition, according to the final rulings by the United States International Trade Commission regarding the import of Chinese PV cells and modules to the U.S., the Company expects to reverse the preliminary countervailing and anti-dumping duties provision recognized in the first quarter of 2012. As a result, the Company expects its gross margin in the third quarter of 2012 to be in the range of negative 22% to 24%. Excluding the impact of the non-cash charges and the reversal of duties provision mentioned above, the Company expects its gross margin of PV modules in the third quarter of 2012 to be in the range of 0% to 1%." http://ir.yinglisolar.com/phoenix.zhtml?c=213018&p=irol-newsArticle&ID=1759633&highlight=

[explo 628]

But I am not getting this, would those reversal of duties have an positive impact not a negative one?

They have a positve gm impact, not excluding those the non-gaap gm would be even higher. This means that the negative effect from inventory provision and under utililzation total more than 20% negative gm effect. I think it is the first time one of these companies exclude the under utilization cost.

[explo 628]

With 0% gm with most non cash effects excluded it is clear that they've sold products just a few cents above their cash cost.

[odyd 1,301]

Their poly costs are horrendous and their inventory must be the most expensive. I think they were under 50% for wafers and cells for whole quarter, and perhaps good part of the module was down too. I would hope their write off on the inventory plus selling only from it could give them half inventory numbers, or am I too naive?

[explo 628]

Their poly costs are horrendous and their inventory must be the most expensive. I think they were under 50% for wafers and cells for whole quarter, and perhaps good part of the module was down too. I would hope their write off on the inventory plus selling only from it could give them half inventory numbers, or am I too naive?

FG inventory is bad for anyone shipping less than expected, of course worsened by input cost moving slower than market (like YGE poly cost). Underutilization is extra bad for those with a lot of fixed assets on their balance sheets. YGE is one of those trappex by having paid more for its production assets than can be recovered with low ASPs. At underutilization this unreoverability becomes highlighted. Just as STP's Q2 warning a while ago (still not reported) YGE's warning means the quarterly net loss to be reported could be close to 200m.

[explo 628]

You're right that underutilization cost taken this quarter reduces inventory provision cost next quarter, by not building too much inventory. This can be done when you expect low demand and thus low need to keep inventory to meet customer commitments.

[odyd 1,301]

They are mostly non-cash losses, however.

[explo 628]

Yes loss derived from provision and depreciation cost reflect loss on cash spent when raw material was bought and goods was produced and when equipment was bought relative to cash they can get for/from it now when goods are sold. They still burned the share holder capital, they just recognize it now although the cash was spent quarters ago. The loss related to the 110m in opex and interest cost is cash cost and affects current cash balance.

[odyd 1,301]

I am reading on Polaris that Yingli s going to have 0.66 per watt cost for Q3 and .58 per watt for Q4. They said they will do 2.1 to 2.2GW, 36.7% China market in second half. There was a meeting held by Yingli about moving into the EPC business plans to have 5GW of projects in 6 provinces by 2015. Wow.

[explo 628]

Wow that is a lot of projects. Very interesting. Do you have a link? Short-term regarding averaging down and yge vs tsl. I think there are a few short-term things in favor of tsl. PPS tanked recently. Better balance sheet. And most importantly guidance given says yge will lose 150-200m in q3, thus joining the ranks of ldk and stp, while tsl guidance points to them staying at a 50-100m bleed level.

[Guest nanofrogfish_spf]

Those are pretty ambitious goals for projects. They would need some pretty good financial backing to make that happen. It's not surprising that the China demand this year has not lived up to earlier expectations...these things always seem to take longer than anticipated. But it is coming...so it could be possible to hit that 5GW in 3-years (I assume that would include pipeline). I guess the big question is how much margin will there be on those. Do those costs/W include poly?...they seem pretty competitive, especially Q4.

[odyd 1,301]

HI guys, yes on all-in, links below this is the site , if you using chrome will give you immediate translation http://guangfu.bjx.com.cn Pop this into the search : 英利 this is on costs http://guangfu.bjx.com.cn/news/20121115/401826.shtml this is on projects and power generation http://guangfu.bjx.com.cn/news/20121109/400677.shtml I got to be honest explo I do not think level of debt matters. Yes, Yingli has a lot of it, but they have means to manage themselves out of it. Their losses will be non cash: inventory provision and underutilized capacity depreciation. Nano I think they want to own those projects and generate power, which is even more than I expect. More and more I think about it I see how Chinese will make those to be successful. I do not think we , Western world in general have an idea, how powerful those desires are. At the same time, the stock exchange future of those stocks could go either way complete abandonment or massive appreciation in long term. I am attaching the excel file to show how I see this, check the % of China's shipments. They will meet their 2.1GW objective

[explo 628]

I got to be honest explo I do not think level of debt matters. Yes, Yingli has a lot of it, but they have means to manage themselves out of it. Their losses will be non cash: inventory provision and underutilized capacity depreciation.

Debt alone might not matter. I look at the capital allocation, i.e. how they take funds from investors and banks and allocate that for fixed assets and working capital. Banks will get what they pitched in back with interest. Share holders will get what's left. Right now that part is diminishing for YGE and other fixed asset heavy companies like LDK and STP. In case of BK banks and other creditors have asset claim preceedence over share holders. If you look at LDK the share holders claim on the company assets are now down to less than 10%. The companies might survive, but the share holder claim has been wiped out, unless they pitch in new capital. In LDK's case that would mean in the order of a billion, i.e. $10 per share (x10 more shares needs to be issued), to get some substantial claim back. Basically those that took money from share holders and used it poorly by buying too expensive equipment are now letting the share holder take the blow for that poor capital management. How do you mean that they will manage out of the debt? I know the company can find ways to pay the bills, but I don't see how they can do that in a way that is good for share holders. The charges now taken on poorly allocated capital, like inventory and AR provisions for poor working capital allocation, and impairment and under utilization charges for poor fixed asset capital allocation (besides the regular heavy depreciation cost for spending too much on fixed assets), are non-cash for the quarter they are taken, but that is only because the cash burnt on this was paid in previous quarter. They still took the share holders and banks money and spent it without recoverability (and the share holder takes the full blow for both its and the bank's burnt money). From an insolvency perspective it might feel good that it is only non-cash losses, but I've never seen solvency as a problem, since these companies are liquidity backed by endless credit lines from SOE banks and local governments. Plants and jobs won't be lost, share holder claim on assets and business and thus on any future profits will be.

[Guest nanofrogfish_spf]

Very good post explo... Sometimes all the details on the accounting side makes my head spin (I can't see the forest thru the trees). Your post really gets right to the point; All those write-downs are just the final accounting acknowledgement of previously wasted investor capital, and it's primarily the stock investors' equity that has been lost. From a stock investor's standpoint, I just don't know how those companies in this industry that are Billions in debt can ever climb out of those huge holes they've dug for themselves, without further eroding the stock-holders' equity stake (barring some type of debt forgiveness). Again, thanks for that well written post...

[explo 628]

Thanks nano, you got my point. I should add that I recognize that some shares that used to cost $70 now is for sale for only $0.70. So capital burnt is baked in, even some of which has not been recognized yet. This buyers market in PV stocks (reflecting a buyers market in the industry) is why as I'm still positive on some names, but you have to be picky now. Pick those that have less losses left to recognize than what is baked in. Say that LDK lost $69.30 going from $70 to $0.70 in market value of its shares, then my point is that for companies bleeding that much those 70 cents are gone too. Its liabilities has now exceeded its replacement value in my book.

[Guest greensolar]

http://goo.gl/NjJlF

[explo 628]

$1.15 per watt retail for a kit. Seems low. Good for manufacturers that margins are compressed at retail level too, to spur demand.

[odyd 1,301]

http://finance.yahoo.com/news/yingli-green-energy-announces-largest-032200033.html