They guide a lower Q2 when they released Q1. My guess it's already priced in. Yiyu said 2H will be much better. If they continue guiding an awesome 2H as predicted by Yiyu, we could see stock double in no time. But I can't trust Yiyu right now.
Q1 gross margin was 14% So total gross margin 7% would be half. Q4 2014 gross margin was 16%.
The PV sale business has a lower margin thus is 6 to 7%.
Jfu. The first company to focus on downstream project was Suntech when they JV with Global Solar Fund to build projects in Italy about 5 or 6 years ago. The current Tier one, Canadian solar was one of the earliest to focus on downstream projects and been the most successful thus far and their gross margins been well over 20%. Conversely, Yingli was the last Tier 1 to start the downstream projects. In 2013, when Trina and esp Jinko, they ramped up their downstream project as Yingli was focusing on expanding capacity to get the crown of #1 solar producer in the world. So they can use that title for the world cup in 2014. They gamble big time on world cup and it has failed. World cup did not help generate any business. Yingli only got serious in down stream projects last year when they did secondary offering diluting our shares to form JV with Sailing Capitol in April 2014. After wasting all the money in world cup and giving away panels to charity, they can only build projects by JV. But the answer is downstream project usually gives a margin of 22-30%. The upstream business my guess the highest is around 19% and that can go all the way down to negative margins.
No way. It says dropped from 7% 8% to 6%7% on PV sales only no? Not the total margin rate. PRNEWS didn't mentioned the total margin. Plus total downstream increased 2Q 40mw to 60mw from 1Q 30mw. Correct me if I'm wrong please.
The reason why downstream is better is because of the larger scope of work that a project consists of. There are a lot of ways to make money. A 10 MW project will cost 1.60/W to build. Since yingli builds the whole project they can recognize the revenue of the whole project, which is 16Mill and a profit of 1.6 to 3.2 Mill or so. If they were just selling modules to this project at say .60/W and that is only 6 mill in revenue and only 600k profit, roughly 1/3 to 1/5 of the value for the same project size.
I am not an expert tiger80g but I believe they make more money on downstream projects than selling panels. That’s why they shifted gears and are more focused on downstream projects. All the other tier one solar companies are struggling and I believe they are coming to realizing that and will follow Yingli Solar. This is my understanding; we will see. Others posting here for a long time can better give you a technical explanation. The new posters are just showing up to bash!
Sentiment: Strong Buy
YGE is doomed - their margins are just too low to survive. I can't see much hope of profitability and no way can they raise any capital. It's a good thing for the industry and the tier 1 Companies like TSL and JKS, but sadly for YGE it's too late.
I was here for you in your time of need telling you to sell @ 1.40! Remember never trust the communists! If your country has poor markets and a government you can not trust, Better dump your shares! I am so proud of you right now! I covered a few shares today. They were probably yours!
The system is run by communists that do not have a clue! Pay people to take down crosses instead of putting the money into solar! Chinese people have to do something about their corrupt government!
Sentiment: Strong Sell
Welcome to the world of China. Don't get me wrong there hard working but the system has a lot of corruption and much money was borrowed to control the solar market. Creative destruction being played out as some of the Chinese will go down as well.
Nothing about the management gives me hope. They're just incompetent and from how they deceived us into not selling or in my case buying more share, yes I agree they should be sued for deception.