Yingli Falls on Saying ‘Substantial Doubt’ It Will Continue

(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China’s government has sought to eliminate outdated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


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

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