Yingli Green Energy Holding Company Limited (YGE)
Q3 2010 Earnings Call Transcript
November 19, 2010 8:00 am ET
Arthur Chen – Legal Counsel
Miao Liansheng – Chairman and CEO
Bryan Li – CFO
Miao Qing – Director, IR
Wang Yiyu – Chief Strategy Officer
Robert Petrina – Managing Director, Yingli Green Energy Americas
Jesse Pichel – Jefferies
Dan Ries – Collins Stewart
Vishal Shah [ph] – Vishal Capital [ph]
Lu Yeung – UBS
Timothy Arcuri – Citi
Gary Hsueh – Oppenheimer
Satya Kumar – Credit Suisse
Adhira [ph] – Lazard Capital Markets
Amy Song – Goldman Sachs
Sam Dubinsky – Wells Fargo
Stuart Bush – RBC Capital Markets
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Hello, ladies and gentlemen. This is Isha, and I will be your operator for this conference call. I would like to welcome everyone to the Yingli Green Energy Holding Company Limited third quarter 2010 financial results conference call. All lines have been placed on mute to prevent background noise. As a reminder, today’s conference call is being recorded. After today’s presentation, there will be a question-and-answer session. Please follow the instructions given at that time, if you would like to ask a question.
I would now like to transfer the call to the host for today’s call, Arthur Chen, In-house Legal Counsel of Yingli Green Energy. Arthur, please proceed.
Thank you, operator. And thank you, everyone, for joining us today for Yingli’s third quarter 2010 financial results conference call. On the call today from Yingli Green Energy are Mr. Miao Liansheng, Chairman and Chief Executive Officer; Mr. Bryan Li, Executive Director and Chief Financial Officer; Mr. Wang Yiyu, Chief Strategy Officer; Mr. Stuart Brannigan, Managing Director of Yingli Green Energy Europe; Mr. Robert Petrina, Managing Director of Yingli Green Energy Americas; and Ms. Miao Qing, IR Director.
The third quarter 2010 earnings release was issued earlier today and is available on the company’s website at www.yinglisolar.com. We have already provided supplemental presentation for today’s earnings call, which can also be found on our IR website. I hope you all had the chance to review it by now.
The call today will feature a short presentation from Mr. Miao covering business and development highlights, and then Mr. Li will take you through a discussion of the company’s financial results and updates. After that, we will open the floor to questions from the audience.
Before beginning, Yingli Green Energy’s management team would like to remind the audience that this presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the US Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminologies such as will, expects, anticipates, future, intends, plans, believes, estimates, and similar phrases.
Such statements are based upon management’s current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Yingli Green Energy’s control, which may cause Yingli Green Energy’s actual results, performance or achievements to differ materially from those in the forward-looking statements.
Further information regarding these and other risks, uncertainties or factors is included in Yingli Green Energy’s filings with the US Securities and Exchange Commission. Yingli Green Energy does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as required under applicable law.
I’d now like to turn the call over to Mr. Miao Liansheng. Mr. Miao, please begin.
Hello, everyone. Thank you for joining us today. First, I would like to discuss some quarterly business highlights and achievements. Please refer to page five to page eight of the presentation. Later on, Bryan Li, our CFO, will take you through our third quarter 2010 financial results.
In the third quarter, Yingli continued to deliver impressive operating results. PV module shipment volume increased by 25.2% compared with the second quarter, driven by robust market demand, growing global brand awareness, and the successful ramp-up of our manufacturing capacity. As a result of our tireless commitment to our cost reduction, we achieved a gross margin of 33.3%, well above the high end of our previous guidance.
Globally, we see continued strong volume demand and a stable pricing through the various PV markets. Europe remained a key component of global PV markets, and it continues to diversify the small countries’ increased demand for solar energy, Italy, France, Spain, UK, and Greece, all growing into attractive sizable markets, which are helping to reduce the industry’s reliance on Germany.
Outside Europe, we are seeing rapid development in emerging markets such as US where we have consolidated our position as one of the largest and most reliable suppliers of high quality PV modules. Recently, several products using Yingli solar modules have been completed, such as 15 megawatts projects with Kaiser Permanente, one of the largest distributed generation projects in the US, Constellation’s 4.4 megawatts utility project at Denver International Airport, and the solar power system at New York Jets’ team headquarters and training center.
In California, we exited the third quarter in third place to commercial installation applications capping a solid (inaudible) fourth quarter 2009. We are committed to tirelessly support our customers in the distribution, commercial, institutional, as well as utility segments to further expand our market share.
Demand for Yingli solar modules continued to increase in global market. Specifically, we see robust demand momentum for the Yingli Solar Panda modules due to their advantages such as high efficiency, low decoration, and superior performance in low radiation conditions. As of today, we have entered into a total of 722 megawatts of PV modules sales contracts, which are expected to be delivered in 2011. We expect the contract volume will reach 1 gigawatts by the end of this year. Customers are generally required to pay payments to issue the committed delivery in 2011.