Li Zongwei: PV industry will come out of winter in 2013

Since the beginning of last December, the price of photovoltaic modules has started to rise, and this upward trend has continued up until now. This increase has had a positive impact on the performance of some solar companies in the fourth quarter, offering a glimmer of hope for the entire photovoltaic industry. During the global launch of the World Wildlife Fund's Carbon Reduction Pioneer Project on January 29, Li Zongwei, Executive Director and CFO of Yingli Green Energy Holdings Co., Ltd., shared his insights on the current state of the market. He stated that, based on the current trends in PV module prices, the industry is expected to emerge from its "winter" in 2013. Li explained that since December 2012, PV module prices have stabilized, partly due to a more balanced supply and demand situation. Although there are still surpluses, they have significantly improved. Additionally, the Chinese market has started to recover quickly, with downstream demand increasing. He also noted that while there may be some corrections in module prices during 2013, they are expected to rise by 5% to 10% compared to 2012. According to a research report from Cinda Securities, the prices of photovoltaic products have been rising steadily, marking the first increase in module prices since the second half of 2011. According to PVInsights' sample data, the average price increases for PV-grade polysilicon wafers and polycrystalline silicon wafers were 0.19% and 1.36%, respectively. Solar cell and wafer prices rose by 1.47% and 0.46% in the past week, while silicon wafers and battery prices saw increases of over 1%. Thanks to this price movement, Yingli’s performance in the fourth quarter of 2012 improved compared to the third quarter, with reduced losses. However, the company’s third-quarter financial results showed revenue of 2.237 billion yuan (approximately $355.9 million), which was higher than expectations but still represented a 27.9% drop from the previous quarter and a 47.46% year-over-year decline. The net loss for the quarter reached 959 million yuan ($152.6 million). Despite the rising component prices, Li emphasized that production costs are decreasing, leading to a wider profit margin and a significant improvement in gross profit margins. He believes the entire photovoltaic industry will see a recovery in 2013, although it won’t return to the levels seen in 2009. Through consolidation and elimination of weaker players, the industry is entering a stronger and more sustainable phase.

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