Chinese manufacturing rivals come to Yingli Green’s aid

Facebook
Twitter
LinkedIn
Reddit
Email

Updated: The precarious financial position of major tier-one PV manufacturer Yingli Green was further highlighted in its second quarter financial results and subsequent earnings call with financial analysts. 

The company had slashed its third quarter and full-year PV module shipment guidance from a range of 3.6GW to 3.9GW to only 2.5GW to 2.8GW. 

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

With PV module nameplate capacity unchanged from 2014 at 4GW, Yingli Green had an average quarterly run rate of 1,000MW, while it shipped 754MW in Q1, 729MW in Q2 and guided shipments of 550MW to 580MW for Q3. Taking full-year revised shipment guidance (mid-point Q3 and full-year) shipments in Q4 would be just over 600MW and full-year shipments of around 2,650MW. 

PV Tech assessed that Yingli Green would have approximately 1,350MW of unused capacity in 2015, resulting in average utilisation rates of around 63% to 65% in 2015. 

In comparison, major rivals, Trina Solar, JinkoSolar, Canadian Solar and JA Solar have been effectively operating at 100% utilisation rates 

Module tolling 

However, Yingli Green management noted in its earnings call that it was working with an unspecified number of other Chinese PV manufacturers to provide tolling (OEM) module services to keep production utilisation rates as high as 90% through the second half of the year. 

Described as ‘business partners’ rival firms were said to be providing the necessary materials (wafers, EVA, backsheet) to Yingli Green so that it preserved cash, while the company incurred costs such as electricity and labour only, indicating it was tolling rather being a sub-contractor. 

Yiyu Wang, Yingli Green’s CFO said in the call: “The OEM payment term will almost like cash payments, because we don’t need to invest in the majority materials; the OEM partners will provide their materials. So, we just need to invest in some of the necessary cost components like electricity, labour and some small assets and the collection of these kind of OEM revenue will be very short, almost like a monthly collection which is very fast.”

Management also noted that the module tolling business would not be registered as shipments, but rather such tolling arrangements would be entered on to its balance sheet as ‘other income’. 

The company reported second quarter ‘other income’ of US$14.07 million.

The purpose of the tolling, other than keeping utilisation rates high and therefore production costs as competitive as possible was the ability to generate cash from tolling much quicker than traditional modules sales. 

Management said that payment for module tolling was almost instant, with monthly payments guaranteed. 

As PV Tech has recently highlighted, Trina Solar, JinkoSolar, Canadian Solar and JA Solar, key companies that have joined a super league of manufacturers have guided shipments ahead of nameplate plate capacity in 2015, totalling around 1.5GW. 

Yingli Green also said in the call that tolling orders could account for 20-30% of total production capacity in the third quarter, while 50-60% of production would be for self-orders.

“Regarding to the utilization ratio, in Q3 and Q4 from the orders perspective, we should have enough third-party sales orders to fully support our production utilization ratio, added Wang in the conference call.  “However, given the current cash flow challenge, we plan to take some OEM orders which may represent around 20% to 30% of our total production capacity for Q3. And we plan to use roughly 50% to 60% of our total production capacity for our sales orders. Therefore, the average expected utilization ratio could be in the range from 70 to 90%, depends on the following part of the Q3, how everything [utilisation rates] goes up.” 

However, although the module tolling would potentially keep utilisation rates high, management noted it would be forced to undertake a significant impairment charge study, using independent third parties on its large manufacturing assets. 

This would lead to significant impairment charges on such long-lived assets that would have a serious material and adverse effect on the company. 

Yingli Green had reported in its second quarter financial filings that property, plant and equipment assets were valued at US$11.68 billion.

Read Next

July 16, 2025
Supply-demand imbalances and inventory pressures have driven down prices and negatively impacted the operational performance of several listed Chinese PV companies that released their 2025 interim forecasts this week.
July 16, 2025
ABB has announced that its 2,000V OTDC is the first switch-disconnector of this size to receive certification from UL Solutions.
July 16, 2025
US IPP Geronimo Power has started construction at its 250MW Portage Solar project in its home state of Wisconsin.
July 16, 2025
IPP Cero Generation and developer Enso Energy have reached financial close on a 360MW solar-plus-storage portfolio of projects in the UK.
July 16, 2025
Planning uncertainty and policy instability regarding renewables in Queensland have seen it slip in investment attractiveness, with New South Wales now leading Australia.
July 16, 2025
The New South Wales government has announced AU$26.2 million in funding for several Australian solar PV and battery initiatives.

Subscribe to Newsletter

Upcoming Events

Media Partners, Solar Media Events
September 2, 2025
Mexico City, Mexico
Solar Media Events
September 16, 2025
Athens, Greece
Solar Media Events
September 22, 2025
Bilbao, Spain
Solar Media Events
September 30, 2025
Seattle, USA
Solar Media Events
October 1, 2025
London, UK