Solar panel maker Yingli predicts return to profit as demand rises
Yingli Green Energy, the world's biggest solar-panel maker, expects to post its first quarterly profit in three years as early as next quarter as demand climbs and cost controls show results.
Yingli Green Energy, the world's biggest solar-panel maker, expects to post its first quarterly profit in three years as early as next quarter as demand climbs and cost controls show results.
The forecast indicates increasing optimism that solar-panel makers are recovering from a plunge in prices caused by surplus manufacturing capacity. Trina Solar and JinkoSolar already have returned to profit. Canadian Solar, the best-performing stock among peers in the past year, posted its first quarterly net income in more than two years in November.
Yingli's American depositary receipts on Tuesday increased 8.4 per cent to US$7.08 at the close in New York, the highest since October 24.
Yingli has surged more than 40 per cent this year after agreeing to form a venture with Datong Coal Mine Group to develop solar plants in Shanxi province.
The partners plan to build 100 megawatts of solar farms this year, according to Wang, who said such tie-ups were a low-cost way to increase sales for manufacturers.
Yingli also said it agreed to a venture with China National Nuclear Corp to develop 500 megawatts of distributed-generation projects, or small-scale power production near the point of use.
Rising demand for solar panels, along with improvements in research and development and tighter cost control, were responsible for the rebound at Baoding-based Yingli, Wang said.
Global solar-power installations might rise to 50 gigawatts this year from 40 gigawatts last year, led by sales in Japan, China and Southeast Asia, according to Wang.
Markets in South America, the United States and Africa also are picking up.
China might install 14 gigawatts of panels this year, making it Yingli's biggest market and surpassing Europe for the first time, Wang said.
Yingli, which last reported a quarterly profit in the three months to June 2011, expects margins to "recover to the levels of traditional or large-scale manufacturing industries," he said.
That means a gross margin of about 16 per cent and a net income margin of 3 per cent to 5 per cent.
The gross margin was 13.7 per cent in the third quarter of this year and the net margin was minus 6.5 per cent, according to data. Trina Solar, JinkoSolar and Canadian Solar all had wider gross margins than Yingli in the period.
Wang expects China to account for about 30 per cent of Yingli's panel shipments this year. While panel prices might rise, the advance would not be significant, he said.
