The $800M is forecasted for total revenues. Opex should decline as a percentage while sales of projects should act to cancel out interest payments on debt, where the pay down of the long term debt seems to be the priority on their balance sheet.
Very true and the downstream shipments to their own projects for the remainder of 2014, as in Q2, ahead of major project selling any amount to sunken/upfront costs, which serves to create a more predictable revenue stream QoQ rather than wild variances. That the project pipeline increased from 1GW to 1.4GW and only 400-600 are projected for completion in 2014 leaves room ahead for not only consistent revenue via selling, but investments and holding in due time imho.
This was addressed in the 2Q Earnings CC percentage wise - see the Q&A section of the transcript. As for owning the projects long term; that appears to be Yingli's goal as evidenced by Sailing Capital and selective holdings but the impetus is to return to profitability asap and the departure from the 50:50 hold/sell balance is welcomed news for 2014.
"for Q2 yinli averaged $0.112/watt for Opex and $0.042 for interest. That is $0.154 in costs per watt
Peers Trina is at $0.068 and $0.0085 for a total of $0.076 or half of YGE,. Then again this is total shipments and not just shipments for revenue."
TSL margins are shrinking on less total shipment and YGE's margins remain above 15% on more total shipment. Are you sure about your estimates?
"If partners presume half the profits go to others so they gross $17M. "
You assume that half of the profits go to partners but none of the costs?
Do you have any projects in progress? If so I can find you willing partners.
How much does Yingli really get for projects? They are building them for appx $1.10/watt and are getting a 15% gross return when sold. That is $0.17/watt. On 200 MW that is $34M. Now the question is are these 100% owned or partners? If partners presume half the profits go to others so they gross $17M.
The real money is in owning the projects long term. This takes capital that Yingli does not have and the rate of return is very minimal over the first few years.
I do not look at Opex as a percent of shipments when looking at a companies operational efficiency. I prefer to look at their costs on a per watt shipment and compare to their peers.
for Q2 yinli averaged $0.112/watt for Opex and $0.042 for interest. That is $0.154 in costs per watt
Peers Trina is at $0.068 and $0.0085 for a total of $0.076 or half of YGE,. Then again this is total shipments and not just shipments for revenue.
JKS is at $0.073 and $0.13 $0.017 for interest and a total of $0.09/watt shipped for revenue.
For Q3 The numbers are better for Yingli as the costs are estimated(including project shipments) to drop to $0.133 down from $0.154.
Peers Trian however drops from $0.076 to $0.071.
JKS drops from $0.09 to $0.075(project included)
I like to present this way because you can roughly estimate cost increases and you will notice that even though Yingli reduces Opex and interest per watt by appx 13%, their Opex and interest increases by roughly $8M to ~ $144M
Not all those 1100MW are shipped for revenues. By their own admission 165MW of projects in Q3 and likely similar rates in Q4. So reality is around 950MW shipped for revenue
not certain where you come up with the $800M + but at 15% GM you are looking at $120M gross profit. Current Q2 Opex and interest is at ~$135M and by your own admission going to go up with the added shipments.
Good discussion. I'll point out two other insights soon, perhaps not within this thread Going into 2015!
Keep us posted on the IPO pricing/dates. I have been an Alibaba member since 2010 which is the year that they passed over one million paying members (Nov). At that time, it was referred to as a Gold Supplier membership. Definitely worth some time to determine what changes have taken place but I don't doubt their business track record in the least.
Have you ever searched for Yingli stuff on AB?
CFO said we will now focus on improving margins. He gave an example when he was asked "many companies especially in the U.S. are holding their downstream projects, so any possibility that you will follow and start holding downstream projects?" CFO said they will not hold projects because that will take cash and refinancing. They have 60% of projects lined up to sell this year and the other 40% will be sold next year. CFO said they are now focus on profitability. They had 1GW 3RD party OEM to boost capacity to 4.2 GW. Now they don't need the label "biggest solar manufacturer in the world for FIFA. Getting rid of OEM and stop using Taiwan cells, everything will be done in house. When they cash in sales of downstream projects in 3Q, they should report a profit next quarter. After hearing that, YGE is heading the right direction. We will follow other solar stocks that pop to double digits after reporting profitability.
Sentiment: Strong Buy
" Not great on resolving efficiency issues"
If you mean streamlining business type of inefficiencies you might want to consider the POV from the SA article below.
"Yingli Makes Major Moves To Conserve Cash"
Aug. 28, 2014 1:19 PM ET
YGE is the world's largest for a reason or two. Not great on resolving efficiency issues , but the future of solar opportunities ate immense. Investor patience and YGE's addressing issues will grease the rails.
" in name again to stick around tsl rebounded nicely overall after the loses "
pull up the YGE chart . It is over here ===================================================
Then go to 'COMPARE' in the header click then add "TSL" in the provided box.
the truth is the company has lots of issues and the odds are it will continue downward slide to low three's people are fearful to put new money to work in name and at the end will sell off position and move into other names to make money they will sell it in frustration of no real upside in name in current market conditions it needs a positive day to give investors confidence in name again to stick around tsl rebounded nicely overall after the loses buy yge needle stalemate everyday or lower eventually they will sell if trend continues hopeful it goes up but not confident at this point due to the situation right now
The debate is in are you going to buy Alibaba answer is absolutely. If you lookat amazon and apple and look at there numbers Alibaba will be a 200 to 300 stock by early next year. They have ridiculous profit margin before going public. I heard the IPO price could be around 40 to 50 Alibaba is a sure triple in profits by end of 2015 why wouldn't you buy and hold this one