Yingli takes low road in solar price war

Shares in Yingli Green Energy Holding slumped by as much as 13.3 per cent after the world’s largest solar panel maker posted its tenth straight quarterly loss and pushed back guidance for a return to profit to the third quarter of this year – a year later than some of its rivals and at least three months later than Yingli CFO Wang Yiyu predicted in January.

As Bloomberg notes, the China-based panel maker has adopted a strategy of market share over profit, relying more on low-margin sales to Chinese customers than its competitors, some of which were on the road to recovery from a two-year market slump.

So, while a surge in global demand for solar panels has helped peers like JinkoSolar and Canadian Solar shift into profitability, Yingli has fallen 8.3 percent to its lowest price this year.

“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,” Ardour Capital Investments analyst Adam Krop told Reuters.

Yingli’s average selling price was about 63-64 cents per watt in the fourth quarter ended December 31, lower than Trina’s average price of 66 cents per watt in the same period.

CFO Wang told analysts during a conference that Yingli would start to reach break-even in the second quarter and then make a profit in the following quarter.

The company also forecast its shipments would surge as much as 31 per cent this year to 4-4.2GW of solar panels. It sold a record 3.2GW in 2013, according to a a statement released on Tuesday.

Yingli is also expanding its efforts to build solar farms, having completed 128MW in projects last year. It expects to complete construction of 400-600MW of projects in China in 2014.