March 8, 2010

Boading, China: Yingli Announces Fourth Quarter Results; Expands Production Capacity

Yingli Green Energy today announced its unaudited consolidated financial results for the fourth quarter and full year ended December 31, 2009.

Total net revenues were RMB 2,530.9 million (US$370.8 million) in the fourth quarter of 2009, an increase of 13.7% from RMB 2,225.2 million in the third quarter of 2009 and an increase of 43.7% from RMB 1,761.2 million in the fourth quarter of 2008. The increase from the third quarter of 2009 was primarily due to a 15.7% increase in PV module shipment volume over the previous quarter, a result of the increasingly well-recognized 'Yingli Solar' brand, solid and diversified customer base, enhanced sales channels and stronger customer service offerings, as well as the recovery of the solar industry from the global economic recession.

Gross profit in the fourth quarter of 2009 was RMB 750.4 million (US$109.9 million), an increase of 50.0% from RMB 500.3 million in the third quarter of 2009 and 187.9% from RMB 260.6 million in the fourth quarter of 2008. Gross margin was 29.6% in the fourth quarter of 2009, up from 22.5% in the third quarter of 2009 and 14.8% in the fourth quarter of 2008. The increase in gross margin was primarily due to the continuous decline in the blended cost of polysilicon, decreasing polysilicon usage per watt, continuous reduction in non-polysilicon cost, and the relatively flattish average selling price in the fourth quarter of 2009.

Operating income in the fourth quarter of 2009 was RMB 111.1 million (US$16.3 million), compared to RMB 242.8 million in the third quarter of 2009 and RMB 97.8 million in the fourth quarter of 2008.

Operating margin was 4.4% in the fourth quarter of 2009, compared to 10.9% in the third quarter of 2009 and 5.6% in the fourth quarter of 2008.

Net loss was RMB44.8 million (US$6.6 million) in the fourth quarter of 2009, compared to net income of RMB 120.8 million in the third quarter of 2009 and RMB 82.0 million in the fourth quarter of 2008. Diluted loss per ordinary share and per ADS was RMB 0.30 (US$0.04) in the fourth quarter of 2009, compared to diluted earnings per ordinary share and per ADS of RMB 0.79 in the third quarter of 2009 and RMB 0.64 in the fourth quarter of 2008.

Total net revenues for the full year 2009 were RMB 7,254.9 million (US$1,062.8 million), compared to RMB 7,553.0 million for the full year 2008. PV module shipment volume for the full year 2009 was 525.3 MW, an increase of 86.6% from 281.5 MW for the full year 2008. The increase in total shipments was primarily due to the Company's increasingly well-recognized brand, solid and diversified customer base, enhanced sales channels and stronger customer service offerings, and was supported by the completion of an additional 200 MW of total production capacity for each of polysilicon ingots and wafers, PV cells and PV modules in July 2009. The decrease in net revenues despite the 86.6% shipment increase was primarily due to a significant reduction in the average selling price for PV modules, which was caused by the rationalization of profitability across each stage along the solar value chain catalyzed by the recent global financial crisis and the depreciation of the Euro against the Renminbi.

Gross profit for the full year 2009 was RMB 1,714.4 million (US$251.2 million), compared to RMB 1,767.2 million for 2008. Gross margin was 23.6% for the full year 2009, compared to 23.4% in 2008. The slight increase in gross margin for the full year 2009 was primarily a result of our continuous efforts in reducing blended cost of polysilicon and non-polysilicon processing cost, despite of the sharp decrease in the average selling price for PV modules.

"I am very pleased to close 2009 with a strong fourth quarter," said Mr. Liansheng Miao, Chairman and CEO of Yingli Green Energy, "Our PV module shipments for the fourth quarter increased by 15.7% over the previous quarter, and the fourth quarter gross margin continued to improve, reaching 29.6%, reflecting our continued efforts to balance profitability and market share expansion. Although 2009 was a challenging year for us and the solar industry as a whole, Yingli Green Energy was able to emerge stronger by increasing full year PV module shipments by 86.6% year over year to 525.3 MW. Two main factors contributed to our solid shipment growth. First, by satisfying vigorous demand for our highly bankable and cost-effective products, we have enhanced cooperation with our top existing customers. Second, we were able to attract an influx of orders from new customers with our strong brand, well established reputation and integrated service model."

Yingli Green Energy will build PANDA mono-crystalline silicon-based manufacturing lines with annual production capacity of 300 MW in each of mono-crystalline ingots and wafers, cells and modules at its Baoding headquarters, through its wholly owned subsidiary, Yingli Energy (China) Co., Ltd. The new production lines will be designed to produce next-generation high efficiency PV cells based on the technology developed through Project PANDA, a collaboration among Yingli Green Energy, the Energy Research Centre of the Netherlands, a leading solar research center in Europe, and Amtech Systems, Inc., a global supplier of production and automation systems and related supplies for the manufacture of PV cells.

Mr. Miao continued, "Looking into 2010, in view of the shared anticipation of global industry growth and the robust flow of purchase orders and inquiries that we have already received, we are confident in our ability to achieve our full year PV module shipment guidance of 950 MW to 1 GW. This confidence is further supported by our planned capacity expansion. In spite of the expected cuts in feed-in tariff subsidies in Germany in the middle of the year, which may put pressure on the module price, we expect to experience a sustainable growth in the German market in 2010 by capitalizing on our solid position and extensive customer base in that market. In addition, we are expanding our footprint rapidly in the US, Spain, Italy, China and other emerging markets to further drive our growth. To back up our shipment target and goal of further market share expansion, we are actively implementing a 300 MW strategic capacity expansion plan of high efficiency mono-crystalline silicon-based, vertically integrated production lines at our Baoding headquarters. Combined with the existing 600 MW production capacity in Baoding and the 100 MW capacity under construction in Hainan Province, this new expansion project is expected to bring our total production capacity to 1 GW by the end of 2010. In this expansion project, we will adopt new technologies developed from our PANDA project, through which we have already developed next-generation PV cells with an average efficiency rate of 18% or higher on pilot production lines. We expect that the average efficiency rate of our next-generation PV cells will reach at least 18.5% on the commercial application lines by the end of this year. With this expansion in place, we will be better positioned than ever to solidify our leadership in the global PV market."

"Throughout 2009, we focused on promoting our 'Yingli Solar' brand. To deepen our relationships with existing customers and reach out to more potential customers, we joined the privileged ranks of official sponsors of the 2010 FIFA World Cup in South Africa. By associating our brand with one of the world's most popular sporting events, we look forward to better communicating our brand and demonstrating our commitment to making solar energy a clean, enduring and cost-effective energy solution for all humankind," Mr. Miao concluded.

Based on current market and operating conditions, estimated production capacity and forecasted customer demand, the Company expects its PV module shipment target to be in the estimated range of 950 MW to 1 GW for fiscal year 2010, which represents an increase of 80.8% to 90.4% compared to fiscal year 2009. In addition, after taking into consideration the Company's estimated blended cost of polysilicon in 2010, the expected average selling price of PV modules and forecasted exchange rates of the Euro and U.S. Dollar against the Renminbi, the Company currently expects that its gross margin target for fiscal year 2010 to be in the estimated range of 27% to 29%.

Yingli Green Energy also announced Yingli China has secured a project loan of RMB 1.5 billion and a working capital credit facility of RMB 250 million from the Bank of Communications Co., Ltd., Hebei Branch (BOCOM). Under the loan agreement, BOCOM has agreed to provide to Yingli China, subject to certain conditions, a five-year project loan of RMB 1.5 billion to support Yingli China's 300 MW expansion project in Baoding. In addition, BOCOM also granted a working capital credit facility of RMB 250 million to Yingli China.

Further details about: Yingli Green Energy