August 6, 2008

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

Yingli Green Energy today announced its unaudited financial results for the second quarter ended June 30, 2008.

Net revenues were RMB 1,987.0 million (US$289.7 million) in the second quarter of 2008, which increased by 24.6% from RMB 1,595.0 million in the first quarter of 2008 and by 120.5% from RMB 901.1 million in the second quarter of 2007.

The increase was primarily due to continued strong growth in market demand for PV modules, and increased production output, resulting in a higher average selling price and increased shipment volume.

Total PV module shipments increased to 68.2 MW in the second quarter of 2008 from 54.6 MW in the first quarter of 2008. The increase of shipments was primarily due to improvements in operational efficiency and capacity utilization at each stage of our manufacturing process from our research and development efforts, full production of 180-micron wafers throughout the quarter, higher yields resulted by reduced breakage rates and achievements in increasing cell conversion efficiency rates.

"We are pleased to report another strong quarter," commented Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy. "During the second quarter, our total PV module shipments increased significantly, largely as a result of improvements in throughput and operational efficiency at the existing facilities attributable to our R&D efforts carried out at each stage along our vertically integrated manufacturing process, the production of thinner, 180-micron wafers throughout the quarter, higher yields resulting from reduced breakage rates, and higher cell conversion efficiency rates."

"As of today, substantially all of our estimated production output in the second half of 2008 has been contractually secured. With solid demand from existing PV markets and growing demand from emerging PV markets, we have also further expanded our sales in emerging PV markets including Korea, Italy, France, Belgium, the United States and China, which demonstrates our strong ability to effectively build up our brand and extend our presence globally. We believe our position in these markets will further improve our brand recognition and generate well balanced sales portfolio in the future."

"On the polysilicon procurement side, in addition to our four long term contracts with Wacker, the new supply agreements with DC Chemical and Sailing demonstrate our collaborative relationships with existing suppliers and our ability to attract new partners. Additionally, as previously reported, our expansion projects remain on track. Construction, equipment delivery and installation, and personnel training are progressing as planned. We are expecting total production capacity to reach 400 MW in late 2008 and 600 MW towards the middle of 2009."

"As a result of our strong momentum stated above, we feel comfortable raising our expected PV module shipments and net revenue targets for the full year 2008. We are confident that the continued successful execution of our vertically integrated strategy will strengthen our leading position in the PV industry in both the near and long term."

Gross profit in the second quarter of 2008 was RMB 511.8 million (US$74.6 million), which increased by 30.5% from RMB 392.3 million in the first quarter of 2008 and by 149.9% from RMB 204.8 million in the second quarter of 2007. Gross margin was 25.8% in the second quarter of 2008, up from 24.6% in the first quarter of 2008 and 22.7% in the second quarter of 2007. The increase was a result of the cost reduction achieved through research and development efforts at each stage of the Company's vertically integrated manufacturing process.

Operating expenses in the second quarter of 2008 were RMB 116.1 million (US$16.9 million), compared to RMB 109.6 million in the first quarter of 2008 and RMB 57.2 million in the second quarter of 2007. Operating expenses as a percentage of net revenues decreased to 5.8% in the second quarter of 2008 from 6.9% in the first quarter of 2008. The decrease in operating expenses as a percentage of net revenues was primarily due to economies of scale.

Operating income in the second quarter of 2008 was RMB 395.7 million (US$57.7 million), which increased by 40.0% from RMB 282.7 million in the first quarter of 2008 and by 168.1% from RMB 147.6 million in the second quarter of 2007. Operating margin increased to 19.9% in the second quarter of 2008 from 17.7% in the first quarter of 2008 and 16.4% in the second quarter of 2007. The increase in operating margin in the second quarter of 2008 was primarily due to increased gross margin and decreased operating expenses as a percentage of net revenues

Further details about: Yingli Solar