Yingli sees sequentially lower gross margin, shares

BANGALORE (Reuters) - Chinese solar panel maker Yingli Green Energy Holding Co Ltd hopes the fast-growing solar market in its home country will help it meet full-year shipments forecast, but sees sequentially lower gross margin for the current quarter.

Yingli shares fell 9 percent in late-morning trade.

The company expects gross margin to be in the "low to middle twenties percentage" in the current quarter, compared with 27.3 percent in the first quarter.

"I think we are looking at an industry that in the future will operate at lower margins. If you want solar to be a ubiquitous product in every country, it should be somewhat more commoditized," said analyst Paul Clegg of Mizuho Securities USA.

Yingli said it is confident of meeting its shipments view of 1.7-1.75 gigawatt. It said most of its 2011 shipments to China are scheduled to be delivered in the second half of the year.

Besides, volumes are expected to pick up as prices drop. Most major solar manufacturers are increasing their capacity to grow their market share, even as key markets in Europe trim subsidies, leading to lower prices.

"The Italian markets which were pretty much closed in the first half will be re-opened in the second half. So there are plenty of reasons to believe they will be able to increase their volumes in the second half of the year," Clegg said.

Yingli, one of the largest producers of solar equipment, expects to triple China's contribution to its revenue to 11-13 percent in 2011.

The Chinese government is planning 10 GW and 50 GW of installation targets by 2015 and 2020, respectively, the company said.

"All producers are recognizing that the U.S. market and the Chinese market and potentially the Indian markets have a lot of upside and increasingly you will see markets shifting away from Europe," Clegg said.

Yingli last week warned that first-quarter shipments would be lower-than-expected after Italy pared its generous incentives for solar power. [nL3E7GB2ME]

Yingli's quarterly adjusted profit was 35 cents per American Depositary Share, against estimates of 39 cents, according to Thomson Reuters I/B/E/S. Revenue rose 47 percent to $527.3 million, below estimates of $567.5 million.

Yingli shares were down 8 percent at $9.13 on Friday on the New York Stock Exchange.

(Reporting by Swetha Gopinath and Krishna N Das in Bangalore, Nichola Groom in Los Angeles; Editing by Don Sebastian)