Yingli Green Energy Holding Co., a Chinese solar manufacturer, expects to become the world’s biggest panel supplier this year as domestic sales surge, its chief executive officer said.
Panel shipments for the year will be 2.1 gigawatts to 2.2 gigawatts, up as much as 37 percent from 2011, the Baoding, China-based company said in a statement today. Yingli also expects gross margin to rebound to as high as 2 percent in the current quarter after reporting its first negative margin for the third quarter.
Sales in China accounted for 28 percent of Yingli’s third-quarter revenue, twice as much as in the second quarter. That’s boosting the company’s shipments as slowing demand in other regions prompts competitors to revise their forecasts. Suntech Power Holdings Co., the largest solar manufacturer last year, expects to ship as much as 2 gigawatts of panels this year.
“In the fourth quarter, we continue to see stable demand from Europe and the U.S. and rising shipments to rapidly growing markets like China,” Chief Executive Officer Miao Liansheng said in the statement. “Demand in China has grown rapidly.”
The company’s American depositary receipts, each worth one ordinary share, increased 13 percent to $1.62 at the close in New York.
Solar manufacturers are contending with a global glut that’s driving down prices and cutting into margins as governments from Europe to the U.S. reduce support. Photovoltaic panel prices have dropped 19 percent in the past year, according to Bloomberg New Energy Finance.
Yingli expects China to represent 40 percent of its shipments in the fourth quarter, while European sales slip to 40 percent. New solar markets will account for another 10 percent of shipments, and sales to the U.S., where duties were imposed against Chinese imports, will fall to less than 10 percent.
China’s installed capacity will reach 21 gigawatts by 2015 driven by new policies, Miao said during a conference call today.
Yingli has supplied panels for the largest solar farms in Latin America and Singapore this year and is looking at markets such as Uruguay and Sri Lanka.
The company’s production costs, excluding silicon, will fall to about 45 cents a watt at the end of the year and will decline another 5 cents next year, Miao said. Silicon costs, now at around 17 cents a watt, may decline 5 cents to 7 cents next year.
Yingli reported a gross margin of negative 23 percent for the third quarter, its first negative margin for at least three years, as prices fell and shipments slipped 17 percent from the prior quarter. The margin was 11 percent a year earlier.
The company’s net loss widened to 959.2 million yuan ($152.6 million) from 180.5 million yuan a year earlier.