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SFCE Media Scan for May 19, 2015
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Yingli Raises 'Substantial Doubt' About its Future
May 18, 2015 | Recharge News
By Karl-Erik Stromsta
China's Yingli Solar, until recently the world’s largest supplier of PV modules, has flagged up “substantial doubt” about its ability to remain solvent. -
Yingli Seeks Investors to Ease $2 Billion Debt After Solar Slump
May 19, 2015 | Bloomberg
By Justin Doom
Yingli Green Energy Holding Co., which was the world’s biggest solar panel maker until last year, is seeking investors to help it cope with $2 billion of debt that is threatening its ability to remain solvent. -
Yingli In Trouble: The 'Number One' Curse In Solar Strikes Again
May 18, 2015 | Forbes
By Michael Kanellos
Yingli Green Energy Holding Co., which was the number one module manufacturer in the world in 2012 and 2013 before narrowly dipping to second behind Trina in 2014, released its annual report on Friday. -
Facing Continued Losses, Yingli Solar Warns Investors About Its Ability to Operate
May 18, 2015 | Greentech Solar
By Stephan Lacey
After weeks of delay, Yingli Solar released its annual report for 2014 on Friday. The report details more losses at the vertically integrated Chinese solar company, as well as a warning to investors about its ability to continue operating. -
Yingli raises doubts over ability to continue trading
May 18, 2015 | PV-Tech
By John Parnell
The world’s second largest solar manufacturer, Yingli Green Energy, has raised "substantial doubts" over its ability to continue "as a going concern". -
Yingli Green flags "going concern" doubt amid financial difficulties
May 19, 2015 | See News Renewables
By Tsvetomira Tsanova
Yingli Green Energy Holding Co Ltd warned that it might not be able to meet payment obligations under its debt instruments and said there is “substantial doubt” as to its ability to continue as a going concern
Industry News
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Yingli Raises 'Substantial Doubt' About its Future
May 18, 2015 | Recharge News
By Karl-Erik Stromsta
Even as most major surviving module makers returned to profitability over the last two years, Yingli continues to swallow big losses.
Yingli reported a loss of 1.4bn yuan ($230m) loss for the whole of 2014 – meaning it lost a combined 6.7bn yuan from 2012 through 2014.
By comparison Trina Solar, which last year snatched the title of world's largest module supplier from Yingli, and which has a largely similar business model, reported a 2014 profit of $61.3m.
In its delayed 2014 annual report, Yingli acknowledges that “substantial doubt exists as to our ability to continue as a going concern”.
“In the past we have relied primarily on borrowings from commercial banks to fund a significant portion of our capital expenditures and working capital needs, and we expect to continue doing so in the future,” the report says.
But, it continues, “our substantial indebtedness may adversely affect our business, financial condition and results of operations, as well as our ability to meet our payment obligations”.
At the end of 2014, Yingli had 2.4bn yuan ($387m) of cash and cash equivalents on its books, but short-term debts totaling 10.1bn ($1.6bn).
In Yingli’s warning, industry observers will hear echoes of Suntech, which was the world’s largest module maker until defaulting on its bonds in 2013 and subsequently declaring insolvency. Suntech’s primary manufacturing assets were eventually acquired by Shunfeng.
The fall of Suntech made clear to many in the renewables industry that as much as Beijing intends for China to remain the world’s dominant PV manufacturer, no individual company is considered too big to fail.
Concerns about Yingli’s debt and losses have weighed heavily on the company’s New York-listed shares.
Since the beginning of 2014, Trina’s shares have lost 8% of their value, leaving it with a market capitalisation of $1.11bn. However, shares of Yingli have lost more than 65% of their value during that period, leaving the company with a market cap of just $296m – less than smaller Chinese solar peers like JA Solar.
“Our lack of cash resources and our potential inability to continue as a going concern may materially and adversely affect the price of our ADSs and our ability to raise new capital or continue operations,” Yingli warns in its annual report.
http://www.rechargenews.com/solar/1400285/yingli-raises-substantial-doubt-about-its-future
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Yingli Seeks Investors to Ease $2 Billion Debt After Solar Slump
May 19, 2015 | Bloomberg
By Justin Doom
Yingli Green Energy Holding Co., which was the world’s biggest solar panel maker until last year, is seeking investors to help it cope with $2 billion of debt that is threatening its ability to remain solvent.
The Chinese manufacturer said it’s confident it can repay its liabilities, which include $1.6 billion in short-term loans. In an e-mailed statement on Tuesday, it said it’s looking for partners that can take additional shares as well as a strategic investor in the company.
The statement followed a 12 percent plunge in Yingli’s share price on Monday and a warning in a company filing on Friday that there’s “substantial doubt” it can remain afloat. As competitors led by Trina Solar Ltd. snap back from tumbling solar prices that gutted margins across the industry, Yingli has remained unprofitable since the second quarter of 2011.
“Potential risks don’t mean they will happen and don’t mean Yingli is facing or will face such risks,” Wang Yiyu, chief financial officer of Yingli, said in the statement on Tuesday from the company’s headquarters in Baoding, China. “They shouldn’t cause an overreaction.”
Yingli dropped the most in more than seven weeks to $1.49 on Monday in New York after its annual report contained a warning about its ability to remain a going concern. Yingli also had long-term debt of $460 million, according to the filing.Yingli’s Warning
“Our substantial indebtedness and net loss may adversely affect our business, financial condition and results of operations, as well as our ability to meet our payment obligations,” Yingli said in the filing on Friday.
Yingli was the biggest panel maker in 2013 and slipped in 2014 after Trina’s panel shipments reached 3.66 gigawatts, 8.9 percent more than the 3.36 gigawatts Yingli delivered.
“The firm’s reputation is for very low cost at its manufacturing base well away from the major cities, and for compromising on margin to sell volume,” said Jenny Chase, lead solar analyst for Bloomberg New Energy Finance. That “makes it popular with project developers, but has obvious consequences for the balance sheet.”
Solar panel prices have declined more than 67 percent since 2010. That bankrupted more than 30 companies including the main subsidiary of Suntech Power Holdings Co. and Q-Cells SE, which were the top solar suppliers before Yingli took the lead.Competition Recovering
While competitors such as Trina and JA Solar Holdings Co. focused on profit, Yingli concentrated on market share to maintain its size in the midst of an industry shakeout. Now, rising demand for panels is reviving profit at most solar companies.
“Solar cell and panel manufacturing has become more concentrated as prices have fallen,” Yin Lei, a Shenzhen-based analyst at China Merchants Securities Co., said by phone. “Companies with more liabilities and weaker cost controls will be eliminated,” while top manufacturers with the lowest costs will benefit from the growth in demand, he said.
China’s government, which invested heavily in the industry in the past decade, more recently has sent mixed signals about its willingness to support solar.
President Xi Jinping boosted targets for installations this year while authorities also sought to eliminate outdated capacity and encourage companies to consolidate through mergers or restructuring. The government also allowed Baoding Tianwei Group Co. to default on bond payments last month, a first by a state-owned company in China.
Baoding Tianwei, which is also based in the northern city of Baoding, failed to pay 85.5 million yuan ($13.8 million) of bond interest in April.
http://www.bloomberg.com/news/articles/2015-05-19/yingli-seeks-investors-to-ease-2-billion-debt-after-solar-slump
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Yingli In Trouble: The 'Number One' Curse In Solar Strikes Again
May 18, 2015 | Forbes
By Michael Kanellos
It’s a movie we’ve seen a few times in solar.
A company claws its way up to the top spot in market share.
Then a downward descent begins that’s tough to stop.
Yingli Green Energy Holding Co., which was the number one module manufacturer in the world in 2012 and 2013 before narrowly dipping to second behind Trina in 2014, released its annual report on Friday. And the key line that analysts and competitors are latching onto is:
“Substantial doubt exists as to our ability to continue as a growing concern. We have also incurred significant net losses in recent years… If we become unable to continue as a going concern, we may have to liquidate our assets.”
No ambiguity there. Yingli has accumulated short-term and long-term debt of around $2 billion and hasn’t reported a profitable quarter since 2011.
Yingli’s experience doesn’t prove it’s impossible to make money in solar. Trina and Canadian Solar are profitable as well. Canadian in fact had a record year last year. But there is an intriguing pattern here. Companies will spend capital and energy to gain market share only to trip soon because of intense competition and relentless price declines soon after.
Sharp was number one in 2005 and 2006. When Chinese manufacturers like Suntech entered the market, Sharp started to lose ground. The company is now in the midst of a reorganization. Suntech, touted as the most advanced Chinese solar company, came from nowhere in 2002 to become number one by 2010. It narrowlydropped to number two in 2011. Reorganization followed in 2013.
New number one Trina, meanwhile, saw profits drop by 31 percent in the first quarter.
The only company that seems to be able to escape this cycle is First Solar, which topped the charts in 2008, 2009 and 2011.
What’s the problem? Solar panels aren’t commodities, i.e. undifferentiated items that are typically sold by price and price alone. Instead, they are pernicious commodities, i.e. slightly differentiated items where price often plays a controlling factor but that nonetheless cost billions to develop and manufacturer. The difference is that, with a pernicious commodity, you have to spend huge amounts of capital to just to have a chance to break even. Some would call it a bad gambling habit.
We saw the same thing in PCs in the 90s and 2000s. Compaq knocked IBM out of the top spot, only to be up-ended by Dell and its direct model. HP later knocked out Dell through a combination of Dell’s missteps and the acquisition of Compaq. Still, the end-result for HP certainly didn’t set up Carly Fiorina to be the candidate to beat in 2016.
But, like in PCs, some companies have figured out ways to avoid the trap:Vertical Integration. First Solar, SunPower and now SolarCity are seem to be gaining ground on controlling as much of the supply as possible. Vertical integration isn’t a foolproof key to success: Optisolar, the vertical pioneer, went down in flames. (Side note: Fiorina actually walked away from funding Optisolar, maybe the only wacky concept that she never loved.) Admittedly, SolarCity isn’t profitable, but its accumulated power purchase agreements are setting it up for a long-term revenue stream.Branding. The Apple strategy. What makes the battery packs that SolarCity will install different than others? They are being promoted by a billionaire cult hero. Branding has never been easy in solar. Solar panels almost all look identical, do the same thin and largely sit on your roof, out of sight, for 30 years. Often, companies that try to inject radical technology into the market—Solyndra, Nanosolar, 245 others—wind up dead. Still, you’re seeing a pretty interesting amount of progress in branding by installers like Sungevity and SolarCity. SunPower has always had some strength here too.Be Part of a Conglomerate. A few years back, I predicted that Samsung and LG would become large solar players. That turned out not to be the case. Sharp’s recent trouble is a further indication that maybe this strategy needs some work. But on paper it makes great sense: who better to produce a product like this than a company with process manufacturing expertise to burn.Shoot for Singles, Not Home Runs. Back in 2010, Canadian Solar ranked sixth in the world, but mostly was a source of confusion. Why was a company with most of its operations in China called Canadian? (Answer: HQ was in Canada.) Founder Shawn Qu told me back then that his overall strategy was to slowly gain market share while avoiding price wars. To that end, Canadian would experiment with different technologies and business models, but never get too unbalanced. Since then the plan has largely been working.
It will be interesting to see what happens next.
http://www.forbes.com/sites/michaelkanellos/2015/05/18/yingli-in-trouble-the-number-one-curse-in-solar-strikes-again/2/
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Facing Continued Losses, Yingli Solar Warns Investors About Its Ability to Operate
May 18, 2015 | Greentech Solar
By Stephan Lacey
After weeks of delay, Yingli Solar released its annual report for 2014 on Friday. The report details more losses at the vertically integrated Chinese solar company, as well as a warning to investors about its ability to continue operating.
"Facts and circumstances including recurring losses, negative working capital, net cash outflows, and uncertainties on the repayment of the debts raise substantial doubt about our ability to continue as a going concern," reads the report.
The company said that its declining financial health may make it difficult to fund future operations.
"If we become unable to continue as a going concern, we may have to liquidate our assets, and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our audited consolidated financial statements. Our lack of cash resources and our potential inability to continue as a going concern may materially and adversely affect the price of our ADSs and our ability to raise new capital or continue our operations."
The language echoes similar warnings from two other failed solar companies: Suntech and Solyndra.
Yingli Solar was once the biggest solar manufacturer in the world in terms of shipments, but dropped to second place behind Trina in 2014.
Yingli racked up $209 million in losses last year -- marking the third unprofitable year in a row for the company. Leading competitors Trina and Canadian Solar are posting profits.
The company has kept pace with industry-leading cost reductions, however. In 2014, Yingli was able to reduce costs by 8 percent and produce modules for an all-in cost of 48 cents. That's on par with Jinko, Trina and Canadian Solar, which are all producing modules well below 50 cents per watt.
"In 2014, Yingli was able to reduce internal costs, increase gross margins, diversify its regional portfolio, grow its downstream business, and remain one of the top suppliers in terms of shipments. Looking at these achievements, the company was comparable to top Chinese manufacturers in 2014. Though comparable in strategy, the company's bad debt is a weakness and one that has been raising questions for some time," said Jade Jones, a solar analyst with GTM Research.
Other analysts have called Yingli's fundamentals "pathetic." With more than $2 billion in debt, mostly from Chinese banks, the company is expressing worries about its ability to pay down its loans and access more capital, as well as its exposure to interest-rate variability compared to competitors.
Yingli says it is "exploring a variety of alternative financing plans" that include selling additional shares to major shareholders or borrowing money from existing shareholders.
The company also hopes that its downstream solar development business can help improve its financial health. Yingli reports that it has 1.6 gigawatts of projects in the pipeline for China, and an additional 300 megawatts of projects outside China.
"We are considering various strategies in such downstream businesses including selling self-developed solar projects to third parties upon completion, retaining and operating self-developed solar projects, forming joint ventures with third parties to develop and operate solar projects, and providing engineering, procurement and construction, or EPC services, to third parties," reads the annual report.
http://www.greentechmedia.com/articles/read/facing-continued-losses-yingli-solar-issues-going-concern-warning-to-invest
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Yingli raises doubts over ability to continue trading
May 18, 2015 | PV-Tech
By John Parnell
The world’s second largest solar manufacturer, Yingli Green Energy, has raised "substantial doubts" over its ability to continue "as a going concern".
In its delayed annual report released on Friday evening, the company said its level of debt, sequential losses, its inability to raise new finance and other industry risks, including trade disputes, mean the company faces an uncertain future.
“In the past we have relied primarily on borrowings from commercial banks to fund a significant portion of our capital expenditures and working capital needs, and we expect to continue doing so in the future. Substantial doubt exists as to our ability to continue as a going concern. We have also incurred significant net losses in recent years," the report states.
The filing, released after markets in the US closed has confirmed many of those fears.
“If we become unable to continue as a going concern, we may have to liquidate our assets, and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our audited consolidated financial statements. Our lack of cash resources and our potential inability to continue as a going concern may materially and adversely affect the price of our ADSs and our ability to raise new capital or continue our operations,” the filing said.
Rumours had been circulating that Yingli was experiencing difficulties since the company delayed publication of its annual report last month.
“Like we saw with Suntech a few years back, we’re again seeing the potential failing of another industry leader," said Ash Sharma, senior director, solar research at IHS. "Yingli was the largest module supplier in both 2012 and 2013 before being surpassed by Trina. Throughout that time it made some questionable strategic decisions, such as sponsoring the FIFA World Cup and its unsuccessful move upstream into polysilicon manufacturing. Both of which ultimately proved costly and possibly contributed to the dire position it is now in. Yet again we’re seeing that no company within the solar industry is too big to fail.”
The company said that it is in negotiations with a major shareholder over the possibility of a loan and/or a private share placement, that could raise as much as RMB600 million (US$96.7 million). The company also hinted at a potential windfall from local authorities. It recently received nearlyRMB600 million for the land use rights of the plot of land next to its existing polysilicon facility. According to the annual report, the local government "may at its sole discretion” return any funds its makes from the land over and above the RMB600 million to Yingli. The company predicts the site could be worth RMB1.42-2.22 billion leaving Yingli with additional funds of between RMB820 million (US$132 million) and RMB1.62 billion (US$260 million).
The Chinese government has in the past said it would permit consolidation in the solar sector, indicating that struggling firms would not be bailed out. Jifan Gao, CEO of Trina Solar, has previously talked about the need for consolidation while Chinese PV analysts have long predicted it.
The company made a US$209 million loss in 2014.
Debts
The SEC filing provides details on the company’s debt levels and concedes that it could restrict its growth and ability to meet its repayment obligations.
“We have a significant amount of debt and debt service requirements. As of December 31, 2014, we had RMB10,112.1 million (US$1,629.8 million) in outstanding short-term borrowings (including the current portion of medium-term notes and long-term debt), RMB1,713.3 million (US$276.1 million) in outstanding medium-term notes (excluding RMB2.34 billion that have or will become due in 2015) and RMB2,858.2 million (US$460.7 million) in outstanding long-term debt (excluding the current portion).”
Yingli also revealed its current actual manufacturing capacity, with modules on 4GW, 3GW for ingots and wafers and 3.2GW for cells.
Downstream
The annual report also provided an update on the company’s downstream ventures. It has a 1.6GW pipeline in China with projects to be sold upon completion.
It conceded that it is still considering how to develop its downstream business by selling to third parties, retaining its own projects or forming joint ventures.
Its overseas portfolio totals 300MW.
http://www.pv-tech.org/news/yingli_says_there_substantial_doubt_ability_to_continue_trading
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Yingli Green flags "going concern" doubt amid financial difficulties
May 19, 2015 | See News Renewables
By Tsvetomira Tsanova
Yingli Green Energy Holding Co Ltd (NYSE:YGE) warned that it might not be able to meet payment obligations under its debt instruments and said there is “substantial doubt” as to its ability to continue as a going concern.
The Chinese company was the number-one solar module supplier globally in both 2012 and 2013. It said in its Annual Report, filed late last week, that it requires “a significant amount of cash” to fund its operations and meet future capital requirements. It explained that due to the weakened macroeconomic conditions, including adverse credit market conditions, it has been increasingly difficult to secure financing on acceptable terms or at all.
As of the end of 2014 photovoltaics (PV) maker Yingli had CNY 10.1 billion (USD 1.63bn/EUR 1.44bn) in outstanding short-term borrowings, CNY 1.7 billion in outstanding medium-term notes and CNY 2.86 billion in outstanding long-term debt. These do not include CNY 2.34 billion of medium-term notes that have or will become due in 2015.
Yingli said its ability to generate significant cash flow in the future is subject to general economic, financial, competitive, regulatory and other factors which are beyond its control.
For 2014, the Chinese company reported a net loss of CNY 1.3 billion on revenues of CNY 12.93 billion. These compare to a loss of CNY 1.94 billion and revenues of CNY 13.42 billion in 2013.
(CNY 1 = USD 0.161/EUR 0.142)
http://renewables.seenews.com/news/yingli-green-flags-going-concern-doubt-amid-financial-difficulties-476976
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