(Bloomberg) — Yingli Green Energy Holding Co., the second-largest panel maker, fell the most in more than seven weeks
after saying there’s “substantial doubt” about its ability to
remain in business.
Yingli declined 12 percent to $1.49 at the close in New
York, the most since March 25.
“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,” the Baoding, China-based manufacturer said in a
filing Friday.
Yingli had short-term borrowings of about $1.6 billion at
the end of last year and long-term debt of $460 million,
according to the filing. It hasn’t reported a profit since the
second quarter of 2011.
“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.”
Yingli was the biggest panel maker in 2013 and slipped in
2014 after Trina Solar Ltd. shipped 3.66 gigawatts of panels,
compared with Yingli’s 3.36 gigawatts.
Cost Controls
“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 manufactures with lowest costs will
benefit from the growth in demand, he said.
Solar panel prices have declined almost 13 percent in the
past year, according to Bloomberg data.
The fight for survival in China’s solar and wind
industries, where overcapacity has weighed on earnings, is
escalating after President Xi Jinping said last year that the
nation should boost clean-energy supply amid worsening smog.
China’s government has sought to eliminate outdated
capacity by encouraging solar companies to consolidate through
mergers and acquisitions or restructuring.
Baoding Tianwei Group Co.’s default last month on an
onshore bond, the first by a state-owned company in China,
exposes the toll that a glut of solar manufacturing has
inflicted on some of the smallest and financially weakest
producers.
The company, 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.
To contact the reporter on this story:
Justin Doom in New York at
To contact the editors responsible for this story:
Reed Landberg at
Iain Wilson, Jason Rogers