Chinese solar component manufacturer Yingli Green Energy posted a 14% rise in net profit in the second quarter, buoyed by increasing sales and higher than expected prices.
The China-based, New York-listed company, which markets its photovoltaic products under the name Yingli Solar, reported a net profit of RMB217.8 million ($32 million), up from RMB190.9 million in the first quarter and a loss of almost RMB400 million in the second quarter of 2009.
Net revenue rose 10% compared with the previous quarter to RMB2,699.6 million, boosted by an increase in photovoltaic module shipments, while operating costs rose 21.5%, which Yingli attributed, in part, to its sponsorship of this year’s football World Cup.
Yingli chief executive Liansheng Miao highlighted the company’s international growth and said the company is confident of a strong second half of the year. However, while the company benefited from better-than-expected prices for its product in the second quarter, Miao told analysts that selling prices could fall by a percentage of “high single digits” in this quarter.
David Cunningham, a London-based renewables and cleantech analyst with corporate finance group Altium Securities, said Yingli’s results reflect its “strong competitive position”, driven by its size, attractive government support and the stabilisation of module pricing.
“Yingli is in a very strong position simply because of its size, its economies of scale, its vertical integration,” Cunningham told Environmental Finance. “It’s got extremely cheap financing through the state government – you couldn’t get that anywhere else in the world.
“There [are] very few European companies that can compete with the Chinese on price, and unfortunately that doesn’t look like it’s going to change any time soon.”
John-Marc Bunce, a cleantech analyst with Nomura in London, said Yingli’s increased profits reflect that of other low-cost Chinese solar companies such as Renesola, LDK Solar and JA Solar.
He said European incentives are also helping to drive China’s solar profits boom. For example, Germany’s decision to reduce government incentives for solar installations from 1 July prompted a rush in solar activity in the first half of the year.
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