my comments on YGE 1Q10 results:
33% gross margins, puts YGE at #2 in the rankings, behind FSLR's 50% (but TSL hasn't reported yet, and they had 33% GM last quarter). The rest of the big solars are way behind in the 23-13% range.
130% capacity utilization. The ability of Yingli to achieve this, is very bullish for the company, and very bearish for the industry. It means the previous numbers I've posted about total solar manufacturing capacity, could be 30% too low (assuming other companies could do what Yingli is doing). It means the big low-cost companies are going to grab an even bigger market share, and the squeeze on high-cost producers will get even more intense.
2010 Guidance: Expects G.M. 27-29%. 950MW - 1GW sold. No EPS or ASP guidance. Didn't say % currency hedging.
GAAP EPS $0.18. Annualizing that, gives a PE of 13 = 9.5/(.18 X 4)
cell efficiency: 16.5% multi-c, which is slightly behind TSL and STP. By 3Q10, PANDA mono-c will be 18.5%
Their average cost of polysilicon in 2009 was 120$/kg. That cost has a long way to fall, as their poly cost should eventually decline to 40$.
Debt, especially short-term debt, continues to increase, and interest expense is becoming a significant cost.
They don't separate cash and restricted cash, as is usual in financial reports. Restricted cash is already committed, and can't be used for other purposes.
Shares went up by 5.64M this quarter. At that rate, share count will be diluted by 15% during 2010, going from 148M to 171M.
If not for foreign exchange losses, their GAAP earnings would have been 53M$ instead of 28M$. They are attempting to reduce the currency risk by accelerated accounts receivable collection.
Restatement of 4Q09 and 2009 results:
<non-cash impairment of intangible assets and a non-cash bad debt expense of RMB 461.0 million in 4Q09> = 68M$, or $0.46/share. <As a result, net loss for the fourth quarter and full year 2009 increased by RMB 61.9 million.> = 9.1M$, or $0.06/share. They can call it "non-cash", but it amounts to a very real loss in revenue for the bad debts, and an admission that they paid too much for those "intangible assets" sometime in the past. Revised 4Q09 EPS GAAP is -0.11$, and revised 2009 GAAP EPS in -0.54$ (my calculations).
Overall, I'm very impressed by their 33% gross margins and 130% capacity utilization. Once the Euro stabilizes, and their poly cost come down, they will be more profitable. They didn't state market share, but it must be increasing. If I was going to add a second stock to my current (small) FSLR position, I'd add TSL or YGE. |
