(Updates with shares in seventh paragraph.)
Oct. 24 (Bloomberg) -- Yingli Green Energy Holding Co., the Chinese maker of solar-power modules whose stock slumped 72 percent from April 1 through last week, reported a surge of sales in Germany and an acceleration in Italy.
German sales of photovoltaic equipment are rising after prices dropped low enough to increase developers’ return to about 15 percent, Darren Thompson, Yingli’s managing director for Europe, said in an Oct. 21 interview.
“There’s a big rush on in Germany now after it was slow at the start of the year,” Thompson said at the opening of the company’s research center near Madrid. “Prices have fallen to a level where the economics are very attractive.”
The photovoltaic power industry has been seeking signs of sales picking up in September and October after the market shut down in the second quarter, sending stock prices into a tailspin. Panel prices slumped 40 percent so far this year as distributors struggled to shift mounting stockpiles.
“I don’t think we’re going to see these huge price falls again next year because of the compression in margins we’ve already seen,” Thompson said.
The Bloomberg Large Solar Energy Index has lost 71 percent since the beginning of April. The average profit margin across the 17 companies in the index fell to minus 24 percent in the second quarter from 8 percent a year earlier, according to Bloomberg data.
Yingli rose as much as 7.3 percent in New York trading and was up 6.7 percent at $3.82 at 11:20 a.m. local time.
PV Crystalox Solar Plc, an Oxfordshire, England-based solar wafer maker, on Oct. 21 said demand in Germany had been weaker than expected in the second half and it would shutter plants and shed workers to conserve cash as it braced for an operating loss this year.
The year-end rally executives had expected “does not appear to be materializing,” the company said in a statement.
Yingli, the sixth-biggest producer of solar panels and solar cells, expects to report increased shipments in the third quarter while the overall market was flat, Thompson said. Net income for 2011 will fall 32 percent to $143 million, according to the median estimate of 17 analysts surveyed by Bloomberg.
“That indicates we’re taking market share,” he said.
Germany will account for about 45 percent of Yingli’s sales this year, Thompson said. That compares with 57 percent in 2010, according to Bloomberg data.
“We’re starting to get less and less reliant on Germany,” he said. “It has picked up again in Italy as well.”
Italy, which accounted for 6.8 percent of Yingli’s sales last year, may overtake Germany in 2011 to become the biggest market after installing about 8 gigawatts of generators, Bloomberg New Energy Finance forecasts. Yingli expects to ship about 1.7 gigawatts.
Yingli, based in Baoding, China, is looking to the U.S. and China as the next two markets to generate growth as installations slow in Europe, which accounted for 82 percent of sales last year. Still, those developments are unlikely to emerge quickly enough to sustain sales growth in 2012.
“Next year I don’t think we’re going to see huge growth,” Thompson said.
--Editors: Stephen Cunningham, Todd White
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