Yingli beats Q2 shipment guidance, but gross margin falls short

Yingli Green Energy, the debt-plagued Chinese PV giant, expects to blow past its shipment guidance for the second quarter of 2016 but fall short of its gross margin guidance, as it sold fewer modules into higher-priced foreign markets.

Announcing its preliminary results, Yingli says it maintained “positive momentum” in the second quarter, having reported a net profit in the first quarter for the first time in more than four years.

Yingli shipped 630-660MW in the second quarter, exceeding its guidance of 580-620MW – and handily surpassing the 508MW it shipped in the first quarter of 2016.

However, the company’s gross margin shrank to 17-19%, below its 18-20% guidance.

The margin contraction was the result of a greater proportion of sales going into the Chinese market, where average sales prices (ASP) are lower than many other large solar markets.

In the first quarter, Yingli said it had “focused” on higher ASP markets to boost its profitability, turning in a net income of 79.6m yuan ($11.9m). But the company apparently did not have that luxury in the second quarter.

Yingli continues to look for a way out from under its staggering debt pile, having defaulted on some of its bonds earlier this year and warned investors of “substantial doubt” as to its ability to continue to remain solvent.

The remainder of 2016 is expected to be tough for module manufacturers as the Chinese market cools off after a blistering first half.

Some module makers nevertheless remain bullish on the sector’s prospects given the robustness of other core markets like the US and the rapid development of new markets around the world.