November 26, 2008

Baoding, China: Yingli Green Energy Reports Third Quarter 2008 Results

Yingli Green Energy today announced its unaudited consolidated financial results for the third quarter ended September 30, 2008.

Net revenues were RMB 2,209.8 million ($325.5 million) in the third quarter of 2008, an increase of 11.2% from RMB 1,987.0 million in the second quarter of 2008 and 73.1% from RMB 1,276.5 million in the third quarter of 2007. The increase was primarily due to increased shipment volume as a result of continued strong demand for PV modules supported by increased production output, partially offset by lower average selling price.

The average selling price for PV modules in the third quarter of 2008 was $4.04 per watt, a decrease of 3.8% from US$4.20 per watt in the second quarter of 2008. This decrease was primarily due to the depreciation of the Euro against the Renminbi in the third quarter of 2008 as a majority of the Company's PV module shipments were under contracts denominated in Euros.

Total PV module shipments increased 17.3% to 80.0 MW in the third quarter of 2008 from 68.2 MW in the second quarter of 2008. The increase of shipments was supported by the installation and trial production of an additional 200 MW of annual manufacturing capacity of each of PV polysilicon ingots and wafers, PV cells and PV modules in September, as well as improvements in operational efficiency and capacity utilization at each stage of the Company's manufacturing process.

Gross profit in the third quarter of 2008 was RMB 492.6 million ($72.6 million), a decrease of 3.7% from RMB 511.8 million in the second quarter of 2008 and an increase of 62.7% from RMB 302.9 million in the third quarter of 2007. Gross margin was 22.3% in the third quarter of 2008, down from 25.8% in the second quarter of 2008 and 23.7% in the third quarter of 2007. The decrease in gross margin was primarily due to the decrease in the average selling price caused by the depreciation of the Euro against the Renminbi in the third quarter of 2008. The unit cost level remained stable in the third quarter of 2008 despite higher polysilicon costs, as both polysilicon usage per watt and non-polysilicon costs were reduced through research and development efforts at each stage of the Company's vertically integrated manufacturing process.

Net income was RMB 150.8 million ($22.2 million) in the third quarter of 2008, a decrease of 27.2% from RMB 207.2 million in the second quarter of 2008 and 15.8% from RMB 179.0 million in the third quarter of 2007. Diluted earnings per ordinary share and per ADS were RMB 1.17 ($0.17) in the third quarter of 2008, compared to RMB 1.60 in the second quarter of 2008.

"The Company's business operations continued to be strong during the third quarter of 2008," commented Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy. "Net revenues continued to grow with increased PV module shipments and output, which benefited from our broad customer base and well-recognized brand name. The total shipments for the first three quarters of 2008 were on track, accounting for 75.1% to 72.4% of our shipment guidance of 270 MW to 280 MW for 2008. Looking forward, we believe Germany will remain a major growth driver of the global PV market while the PV market in the United States has gained additional visibility with the extension of the Investment Tax Credit in early October 2008. In addition to these two markets, we plan to further expand our sales in emerging PV markets including South Korea, Italy, France, Belgium and China. We believe our existing position and continued efforts in these markets will help us improve our brand recognition globally and further solidify our well-balanced geographical and customer sales portfolio. To date, the Company has signed sales contracts for delivery of approximately 120 MW of PV modules in 2009. In addition, we are in negotiations with customers for another 350 MW which we expect to finalize by the end of 2008 or early 2009."

"Recently, we kicked off a series of initiatives to enhance our marketing strategies with a focus on improving product quality and solidifying our customer base. For example, as previously announced, we are collaborating with Deutsche Bank to offer our customers 'one-stop shop' solar project financing solutions. We also formed a strategic partnership with T¨¹V Rheinland (Shanghai) Co., Ltd. to improve quality control and employee training. At the end of October, we successfully hosted the Yingli Green Energy 2008 Global Customer Conference, which more than 260 executives of our global customers, equipment suppliers, certification institutes, banks and government agencies from 15 countries and regions attended. We believe these initiatives will further strengthen our corporate image as a leading global PV manufacturer," Mr. Miao continued.

"We also expanded our total annual production capacity to 400 MW in each of polysilicon ingots and wafers, PV cells and PV modules in September. We expect to further expand our total manufacturing capacity to 600 MW in the third quarter of 2009 while maintaining adequate working capital to support our operations with current cash, expected cash flow from operations and available lines of credit. In this regard, our long-term credit facilities with DEG, FMO and PROPARCO have not only strengthened our ability to expand our vertically integrated manufacturing capacity but also enhanced our debt structure by enabling us to shift to longer-term debt financing of our capital expenditures."

"On the polysilicon procurement side, we have secured sufficient polysilicon to meet our estimated production requirements for 2008. Meanwhile, in light of the recent decrease in the price of polysilicon, we have been renegotiating contracted pricing terms with our suppliers for a portion of the polysilicon delivery for the rest of 2008 and for 2009. Furthermore, five mid- to long-term virgin polysilicon supply agreements with leading global polysilicon suppliers will start delivery at the beginning of 2009 and are expected to allow us to produce more than 230 MW of PV modules in 2009. We believe these agreements will significantly reduce our blended polysilicon cost and support our efforts to improve product quality."

"Moreover, we believe that economies of scale enhanced by the successful ramp-up to 400 MW of production capacity, together with higher yield rates, advanced equipment and technologies and our ongoing research and development initiatives, will further strengthen our position as a leading PV product manufacturer with one of the lowest non-polysilicon manufacturing cost structures in the industry. With our increased operational scale and efficiency and a stable long-term customer base, we believe we are well- positioned for the challenges and opportunities ahead in this difficult macro- economic environment," Mr. Miao added.

Based on current market and operating conditions, current production capacity and forecasted customer demand, as well as current exchange rates for the U.S. dollar, Euro and Renminbi, the Company reaffirms its expected PV module shipment and net revenue targets for fiscal year 2008 as follows:

-- PV module shipments are expected to be in the estimated range of 270 MW to 280 MW, which represents an increase of 89.5% to 96.5% compared to fiscal year 2007.

-- Total net revenues are expected to be in the estimated range of $1,053 million to $1,106 million, which represents an increase of 89.2% to 98.7% compared to fiscal year 2007.

The Company also entered into a binding letter of intent on November 26, 2008 with Grand Avenue Group Limited, a company controlled by Mr. Liansheng Miao, Baoding Yingli Group Company Limited, an affiliate of Grand Avenue, Yingli Energy (China) Company Ltd., a wholly owned subsidiary of the Company ("Yingli China"), and Mr. Liansheng Miao in connection with the proposed acquisition of 100% of the issued and outstanding share capital of Cyber Power Group Limited, a company incorporated under the laws of the British Virgin Islands.

Cyber Power, through Fine Silicon Co., Ltd., its principal operating subsidiary in China, is a development stage enterprise which will be engaged in the business of producing solar-grade polysilicon in Baoding, Hebei Province, China. The Company expects that the Proposed Acquisition will enable the Company to have a more secure and stable supply of polysilicon independent of market conditions, and allow it to further vertically integrate its manufacturing processes and improve margins.

Under the terms of the LOI, the Company proposes to acquire Cyber Power for an aggregate consideration in the range of $70 million to $80 million, which is determined with reference to the book value of Cyber Power's net tangible assets and subject to adjustment after further due diligence. $25 million of the total consideration is payable by November 27, 2008 or as otherwise agreed upon by the parties.

Under the LOI, the Initial Consideration will be used by Grand Avenue to repay a portion of Grande Avenue's indebtedness to finance the construction of the polysilicon operation of Fine Silicon Co., Ltd. The remaining total consideration will be payable on the completion of the Proposed Acquisition.

The Initial Consideration is required to be repaid in full to the Company in the event that the LOI is terminated or the Proposed Acquisition is not consummated prior to February 6, 2009. The repayment obligation of the Initial Consideration will be secured by certain guarantees and collateral provided by affiliates of Grand Avenue and Mr. Liansheng Miao, in favor of the Company and Yingli China.

Further details about: Yingli Green Energy