Yingli's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Yingli Green Energy Holding Co. Ltd. (YGE)

Q2 2012 Results Earnings Call

August 29, 2012 8:00 AM ET


Arthur Chen - Director, Legal Affairs

Miao Liansheng - Chairman and CEO

Bryan Li - Executive Director and CFO

Wang Yiyu - Chief Strategy Officer

Miao Qing - Director, Investor Relations

Darren Thompson - Managing Director, Yingli Green Energy, Europe

Robert Petrina - Managing Director, Yingli Green Energy Americas


Vishal Shah - Deutsche Bank

Satya Kumar - Credit Suisse

Amir Rozwadowski - Barclays Capital

Dan Ries - CapRok Capital

Kelly Dougherty - Macquarie

Timothy Lam - Citigroup

Colin Rusch - Thinkequity

Gloria Ho - HSBC

Ben Schuman - Pacific Crest

Aaron Chew - Maxim Group



Hello, ladies and gentlemen. This is [Yokoyama]. I'll be the operator for this conference call. I would like to welcome everyone to Yingli Green Energy Holding Company Limited Second Quarter 2012 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After today’s presentation, there will be a question-and-answer session. Please follow the instructions given at that time if you’d like to ask a question.

Now I would like to transfer the call to the host for today’s call, Arthur Chen, Director of Legal Affairs of Yingli Green Energy. Arthur, please proceed.

Arthur Chen

Thank you, Operator. And thank you everyone for joining us today for Yingli’s second quarter 2012 financial results conference call. The second quarter 2012 earnings release was issued earlier today and available on the company’s website at www.yinglisolar.com. We have already provided a supplemental presentation for today’s earnings call, which can also be found on our IR website. I hope you all had a chance to review it by now.

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; Ms. Miao Qing, Director of Investor Relations; Mr. Darren Thompson, Managing Director of Yingli Green Energy, Europe; Mr. Robert Petrina, Managing Director of Yingli Green Energy Americas.

The call today will feature a presentation from Mr. Miao, covering business and operational developments. Mr. Thompson and Mr. Petrina will talk about the developments of European and American markets, respectively. And then Mr. Li will take you through a discussion of the company’s financial performance. 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 U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as will, expect, anticipate, 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 those and other risks, uncertainties, or factors is included in Yingli Green Energy’s filings with the U.S. 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. Please begin.

Miao Liansheng

Welcome to our call everyone. Thank you for joining us today. In the second quarter, we increased module shipment volumes by 13.7% over the previous quarter and achieved a gross margin of 4.6%. We managed to keep our growing momentum despite the significant pressure from the feed-in-tariff adjustment in Germany, the ongoing anti-dumping and countervailing duty investigations in the U.S. and continued excessive module supply.

Our shipment volume results in the first half of the year have exceeded our expectations. Based on public information, we have become the global leader as measured by module shipment volumes among all module manufacturers. We expect to maintain this leadership in the second half of this year.

In Europe, we successfully navigated the policy uncertainty and benefited from the pull-in demand before feed-in-tariff adjustments in Germany. Due to the expiration of the cash grant program, the U.S. market experienced substantial demand by all segments in the first quarter. Total installation volumes nearly doubled the first quarter of 2011. In the second quarter, the U.S. market continued to show solid demand across all segments.

Demand gradually increased in the second quarter as the installation of utility scale projects in northwestern China and the Golden Sun Program have accelerated. Importantly, we expect to see a significant increase of demand in the second half of this year, especially from September to November. By leveraging our strategic planning, solid customer base and broad sales networks in our domestic market, we’re confident to achieve our shipment targets in China this year.

In addition to our aforementioned market share gains, we have continued to drive costs down throughout our value chain by making consistent technical improvements. For example, enhanced ingot casting techniques have contributed to the improvement of wafer quality and subsequently drive higher cell efficiency.

In order to foster sulfur innovative thinking among our employees, we will host The First Technology Innovation Exposition at our Baoding headquarters in November to showcase the innovative technology improvements by our employees in all manufacturing divisions. Through this exposition and constant focus on improving our products and our processes, we aim to create and maintain an atmosphere that will encourage and reward innovation.

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