Yingli Green Energy Holding Company Limited or shortly “Yingli Solar,” is one of the world’s leading solar panel manufacturers. Yingli Green Energy’s manufacturing covers the photovoltaic value chain from ingot casting and wafering through to solar cell production and solar panel assembly. Headquartered in Baoding, China, Yingli Green Energy has more than 20 regional subsidiaries and branch offices and has distributed more than 85 million solar panels (representing over 20 GW) to more than 90 countries, including Germany, Spain, Italy, Greece, France, South Korea, China, Japan, Brazil, Australia, South Africa, Mexico and the United States.
In 2016, 2017 and 2018, portions of revenues derived from overseas markets, which included Japan, India, the United States, Europe, Turkey, Australia, Latin Americas and Middle East, etc. In these markets, Yingli Green Energy competes with both local and international producers of solar products, including PV module manufacturers such as SunPower Corporation, thin film solar module manufacturers such as First Solar, Inc., and integrated PV product manufacturers such as SolarWorld AG, Renewable Energy Corporation, and Trina Solar Limited. In 2018, sales in China accounted for 59.4% of total revenues, compared to approximately 40.9% in 2015, approximately 58.9% in 2016, and 76.8% in 2017.
According to the Annual Financial Report, the company incurred a net loss of RMB 1,654.2 million or US$ 240.6 million in 2018. At the end of 2018 the company had a total shareholders’ deficit of RMB13.3 billion (US$ 1.9 billion) and a deficit in working capital of RMB11.9 billion (US$ 1.7 billion).
As of December 31st 2018, the company had cash assets of RMB 604.4 million (US$ 87.9 million), and a current portion of long-term debt of RMB 10,685.6 million (US$ 1,554.1 million), short-term overdue borrowing of RMB 1,107.1 million (US$ 161.0 million) and total short-term borrowing of RMB 8,008.5 million (US$ 1,164.8 million) that were expected to be due within one year.
Total net revenues was RMB 4,456.2 million (US$ 648.1 million) in 2018, compared to RMB 8,363.7 million (US$ 1,216.16 million) in 2017, a decrease of 53.3%. The PV module shipment volume in 2018 was 1,731.1 megawatts, a decrease of 41.4% from 2,953.0 megawatts in 2017.
Net revenues from sales of PV modules were RMB 3,535.5 million (US$ 514.2 million), or 79.3% of total net revenues in 2018, compared to RMB 7,469.7 million (US$ 1,086.52 million) or 89.3% of total net revenues in 2017, a decrease by 52.7% of sales of PV modules in 2018 compared to 2017.
PV module sales in China in 2018 were RMB 2,111.8 million (US$ 307.1 million), or 47.4% of total net revenues, compared to RMB 5,597.3 million (US$ 813.97 million), or 66.9% of total net revenues in 2017. PV module sales in Japan in 2018 were RMB 551.9 million (US$ 80.2 million), or 15.5% of total net revenues, compared to RMB 721.8 million (US$ 104.6 million), or 8.8% of total net revenues in 2017. The shipment decreased by 41.4% and the average selling price decreased by 19.3%.
Total cost of revenues were RMB 4,734.4 million (US$ 688.6 million) in 2018, compared to RMB 8,059.0 million (US$ 1,172 million) in 2017. The decrease was primarily due to the decline of sales.
Gross profit was negative RMB 278.2 million (US$ 40.5 million) in 2018, compared to RMB 304.7 million (US$ 44.31 million) in 2017. Gross margin was negative 6.2% in 2018, compared to 3.6% in 2017. The decrease of gross margin was mainly due to the significant decrease of market selling price as a result of competition worldwide and lower production volume.
Operating expenses in 2018 were RMB 764.8 million (US$ 111.2 million), compared to RMB 3,247.6 million (US$ 472.27 million) in 2017. Operating expenses as a percentage of net revenue was 17.2% in 2018, compared to 39.0% in 2017. The decrease was mainly due to impairment of long-lived assets amounting to RMB 1,897.3 million (US$ 275.86 million) for property, plant and equipment and RMB 144.9 million (US$ 21.07 million) for project assets, primarily as a result of the lower gross margin and continuous decrease of the average selling price.
Net loss attributable to Yingli Green Energy was RMB 1,613.3 million (US$ 234.6 million) in 2018, compared to RMB 3,318.0 million (US$ 482.50 million) in 2017.
Since the middle of 2015, the company has not had sufficient working capital to maintain the full utilization of production facilities as a result of the tight cash flow. To reduce operating cash requirements in 2015, 2016, 2017 and 2018, Yingli Green Energy contracted with third parties to allow them to operate more than half of polysilicon ingot and wafer production facilities. These arrangements help the company finance its production value chain, and reduce working capital requirements.
The company´s ability to continue as a going concern depends on the ability of management to successfully execute its business plan, to renew borrowings, to agree on a debt restructuring plan with creditors, and to persuade creditors to refrain from enforcing debt payment obligations or initiate any bankruptcy proceeding.