Yingli Green Energy Holding Co. (YGE),
the world’s largest maker of solar panels, expects its debt
burden to ease as higher shipments edge the company closer to
turning a profit after three consecutive annual losses.
Yingli Energy (China) Co. is forecast to return to profit
in the second quarter, while the listed company may do so in the
third, Chief Financial Officer Wang Yiyu said in an interview in
Baoding, China, yesterday.
“After turning to profit, the debt-to-asset ratio will
decrease and we’ll be able to raise financing from the capital
market to further reduce our debt ratio,” Wang said.
China’s clean-energy industry faces record debt payments
this quarter, heightening risks after panel maker Shanghai
Chaori Solar Energy Science Technology Co. (002506) became the
country’s first onshore bond issuer to default. Yingli, whose
American depositary receipts have dropped 11 percent since Jan.
1, had $1.11 billion in short-term debt at the end of 2013,
according to data compiled by Bloomberg.
China International Capital Corp., an investment bank, last
month flagged Yingli Energy (China) Co. as one of 12 companies
with outstanding onshore bonds in “great need” of more
Yingli Energy must pay interest on May 3 on bonds due 2015
and 2017, according to data compiled by Bloomberg.
“We paid interest in 2012 and 2013, the most difficult
periods,” Wang said. “As gross margin rebounds and cash flow
increases, we have no reason to default on payments.”
The company raised its forecast for gross margin in the
first quarter to at least 15.5 percent from 14 percent because
of higher average selling prices, it said on April 11.
Trina Solar Ltd. (TSL), JinkoSolar Holding Co. (JKS) and JA Solar
Holdings Co. (JASO) reported quarterly profits in 2013. Yingli has been
slower to return to profit because it’s focusing more on market
share in China, which is one of the regions with the lowest
average selling price of panels, said Wang Xiaoting, a Hong
Kong-based analyst from Bloomberg New Energy Finance.
“Yingli is deploying a more diversified business model
along the whole value chain, like downstream business, that
involves more intense capital investment,” she said.
China accounted for 34 percent of Yingli’s shipments last
year, Yingli’s Wang said.
To cut debt, the company has sought partners to develop
solar farms. Yingli and private equity manager Shanghai Sailing
Capital Management Co. last week agreed to form a fund with an
initial size of 1 billion yuan ($160 million) to invest
primarily in the manufacturer’s projects in China.
The company plans to develop 400 megawatts to 600 megawatts
of solar farms, mainly in China this year, the CFO said. Thirty
megawatts to 50 megawatts of projects will be built in East
Europe, South America, Mexico and Africa.
To contact Bloomberg News staff for this story:
Feifei Shen in Beijing at
To contact the editors responsible for this story:
Reed Landberg at
Iain Wilson, Indranil Ghosh