Yingli Green Energy will return to profitability in third quarter of 2014

Chinese solar giant Yingli Green Energy has announced that it doesn’t expect to return to profitability until the third quarter of 2014 – a year later than some of its rivals and at least three months later than the company’s CFO predicted in January.

Shares in the world’s largest solar panel maker slumped by as much as 13.3 per cent on news of the revised profit guidance, delivered on Tuesday along with the company’s 10th straight quarterly loss.

“We expect our company to break even at the end of the second quarter and start making profits in early third quarter,” a Yingli executive said on a conference call with analysts on Tuesday.

The China-based panel maker has adopted a strategy of market share over profit, relying more on low-margin sales to Chinese customers than its competitors, some of which were already on the road to recovery from a two-year market slump.

Yingli’s average selling price for solar panels was about 63-64 cents per watt in the fourth quarter ended December 31, lower than Trina’s average price of 66 cents per watt in the same period.

“Yingli are a little bit more aggressive with their pricing versus their competition so they give up a little bit of gross margin on that front,” Ardour Capital Investments analyst Adam Krop told Reuters.

Indeed, while a surge in global demand for solar panels has helped peers like JinkoSolar and Canadian Solar shift into profitability, Yingli has fallen 8.3 per cent to its lowest price this year.

But the company has also predicted that its shipments will surge as much as 31 per cent this year to as much as 4.2GW of solar panels. It sold a record 3.2GW in 2013, according to a a statement released on Tuesday.

Yingli is also expanding its efforts to build solar farms, having completed 128MW in projects last year. It expects to complete construction of 400-600MW of projects in China in 2014.

© Solar Choice Pty Ltd 2014