* Posts tenth straight quarterly loss in fourth quarter
* Sees breaking even in 2nd-qtr, Sees profit in 3rd-qtr
* Sees higher shipments, margins in 2014 as China
* Says has 1 GW worth of power plant projects across China
* Shares fall as much as 13 pct
By Swetha Gopinath
March 18 Yingli Green Energy Holding Co Ltd
said it expects to return to profitability only in the
third quarter, a year later than its rivals, as it sells panels
at lower prices to gain market share.
Yingli's shares fell as much as 13.3 percent on Tuesday
after the world's largest panel supplier by volumes posted its
tenth straight quarterly loss.
A recovery in solar panel prices after a four year slump has
helped Yingli's rivals such as Trina Solar Ltd, JA Solar
Holdings Co Ltd post profits in recent quarters, while
JinkoSolar Holding Co Ltd posted a profit last August.
"Yingli are a little bit more aggressive with their pricing
versus their competition so they give up a little bit of gross
margin on that front," said Ardour Capital Investments analyst
Yingli's average selling price was about 63-64 cents per
watt in the fourth quarter ended Dec. 31, lower than Trina's
average price of 66 cents per watt in the same period.
However, Yingli said on Tuesday it expected its solar panel
shipments to rise by as much as a third this year, as it shifts
focus to sell more to solar markets, besides China. That would
help speed up its return to profitability.
"We expect our company to break even at the end of the
second quarter and start making profits in early third quarter,"
a Yingli executive said on a conference call with analysts.
That is faster than what Wall Street expected. Analysts on
average were expecting the company to post a profit in the
fourth quarter, according to Thomson Reuters I/B/E/S.
HIGHER SHIPMENTS, MARGINS
Analysts have said Yingli's heavy costs to service its debt,
investments in research and development and higher fixed costs
than its rivals were also contributing to the company's losses.
"I think the cost of Yingli's debt is the main reason for
continued net losses," said IHS analyst Stefan de Haan,
estimating the company's debt was higher than its direct rivals.
Yingli's fixed costs are higher because it's a fully
integrated company, meaning that it makes its own ingots,
wafers, cells and panels unlike competitors who rely on
third-party suppliers for some components, RBC Capital Markets
analyst Shawn Yuan said.
Still, Yingli said it expects to ship 4.0-4.2 gigawatts (GW)
of solar panels this year, up from the 3.2 GW shipped last year,
with a higher contribution from regions other than Europe, the
United States and China - where prices are among the lowest.
Worldwide solar installations are set to rise by double
digits to 40-45 GW in 2014, according to HIS estimates.
Much of that is expected to be driven by power subsidies in
Japan and China's ambitious target to install 14.5 GW of solar
generating capacity this year - close to Finland's entire power
The company's said it expects gross margins to rise to 14-16
percent in the first quarter, when it expects to sell fewer
panels in China, from 12.2 percent in the fourth quarter.
The company's net loss shrank to $128.2 million, or 82 cents
per American depositary share (ADS), in the fourth quarter ended
Dec. 31, from $200.5 million, or $1.28 per ADS, a year earlier.
Revenue rose about 31 percent to $613 million.
Yingli, like its rivals, is also pushing into the
higher-margin business of building solar power plants to lower
its reliance on the highly-competitive business of selling
Yingli said it had 1 GW of power plants projects in
different approval stages across China, of which the
construction of about 400-600 megawatts (MW) is expected to be
complete by the end of this year.
The company has tied up with China National Nuclear Corp and
others to build solar plants and said it was evaluating various
approaches to hold or sell these projects.
Yingli, which is also building 200 MW of utility-scale
projects outside China, said it was pushing into emerging
markets in the sun-belt regions of Africa, the Middle East,
Central and South America.
Solar companies such as SunEdison Inc and SunPower
Corp are looking at retaining some solar plants, rather
than selling them, to spin them off into a separate,
Yingli shares were down 11 percent at $5.25 in afternoon
trading on the New York Stock Exchange. The stock has more than
doubled in the past year amid a broad rally in solar stocks.