BAODING, China, 13. November 2009 - Yingli Green Energy Holding Company Limited, one of the world's leading vertically integrated photovoltaic ("PV") product manufacturers, today announced its unaudited consolidated financial results for the quarter ended September 30, 2009.

Third Quarter 2009 Consolidated Financial and Operating Highlights

• Total net revenues were RMB 2,225.2 million (US$326.0 million) and PV module shipment volume increased more than 80% quarter over quarter.

• Gross profit was RMB 447.6 million (US$65.6 million), with a gross margin of 20.1%.

• Operating income was RMB 242.8 million (US$35.6 million), with an operating margin of 10.9 %.

• Net income(1) was RMB 120.8 million (US$17.7 million) and diluted earnings per ordinary share and per American depositary share ("ADS") was RMB 0.79 (US$0.12).

• On an adjusted Non-GAAP(2) basis, net income was RMB 184.2 million (US$27.0 million) and diluted earnings per ordinary share and per ADS was RMB 1.20 (US$0.18).

"I am pleased to announce strong results for the third quarter, with record highs in shipment volume and net revenues and healthy growth in net income," said Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy. "The main driving force for these results was increased market demand for our 'Yingli Solar' brand products as the solar project financing environment continued to improve and as we began to see the benefits of our recently implemented competitive pricing strategy, which leverages our favorable cost structure. Additionally, our continuous focus on high quality products and customer service enabled us to continue to expand our market share and raise recognition of our products in both established and emerging solar markets during the quarter, which we expect will help drive growth in the quarters to come."

"I am also very pleased to report that our gross margin continued to increase, reaching 20.1% in the third quarter from 18.3% in the second quarter of 2009 and 15.3% in the first quarter of 2009, underlining our ability to improve profitability by reducing both polysilicon and processing costs while achieving significant shipment volume growth," Mr. Miao continued.

Mr. Miao concluded, "To maintain our leading position, we will continue to focus on research and development and integrating our value chain. I am pleased to report that Project PANDA has achieved its first phase target ahead of schedule, producing next-generation cells with an average conversion efficiency rate of 18% or higher on our pilot production line. Also of note, our in-house polysilicon manufacturing plant, Fine Silicon, is set to begin trial production in December 2009. With Fine Silicon on-line, we will become one of a limited number of Photovoltaic manufacturers in the world with a fully vertically integrated business model, covering the manufacturing process from polysilicon to PV modules. In addition, we will be the first vertically integrated PV product manufacturer in the world to have all of our production facilities located on one site. We believe this will enable us to further optimize our cost structure and capture profit at nearly every stage of the PV industry value chain, thus driving profitability and allowing us to better serve our global customer base."

Third Quarter 2009 Financial Results

Total Net Revenues

Total net revenues were RMB 2,225.2 million (US$326.0 million) in the third quarter of 2009, an increase of 48.5% from RMB 1,498.9 million in the second quarter of 2009 and a slight increase from RMB 2,209.8 million in the third quarter of 2008. The increase from the second quarter of 2009 was primarily due to the more than 80% increase in PV module shipment volume resulting from the improved credit environment in major PV markets, increased brand awareness, continued promotional efforts and improved product bankability, and was partially offset by a lower average selling price.

Gross Profit and Gross Margin

Gross profit in the third quarter of 2009 was RMB 447.6 million (US$65.6 million), an increase of 63.5% from RMB 273.8 million in the second quarter of 2009 and a decrease of 9.1% from RMB 492.6 million in the third quarter of 2008. Gross margin was 20.1% in the third quarter of 2009, up from 18.3% in the second quarter of 2009 and down from 22.3% in the third quarter of 2008. The increase in gross margin from the second quarter of 2009 was primarily due to the decrease in the blended cost of polysilicon as a result of lower polysilicon purchase prices and consumption of comparatively higher priced polysilicon inventory as well as decreasing polysilicon usage per watt and lower non-polysilicon cost in the third quarter of 2009.

Operating Expenses

Operating expenses in the third quarter of 2009 were RMB 204.8 million (US$30.0 million), compared to RMB 167.0 million in the second quarter of 2009 and RMB 115.5 million in the third quarter of 2008. The increase in operating expenses from the second quarter of 2009 was primarily attributable to the increase in selling expenses and general and administrative expenses consistent with the large increase in PV module shipment volume, as well as higher research and development expenses in connection with the progress of a series of research and development initiatives, including Project PANDA. Operating expenses as a percentage of total net revenues were 9.2% in the third quarter of 2009, compared to 11.1% in the second quarter of 2009 and 5.2% in the third quarter of 2008. The decrease in operating expenses as a percentage of total net revenues from the second quarter of 2009 was mainly due to the increase in total net revenues.

Operating Income and Margin

Operating income in the third quarter of 2009 was RMB 242.8 million (US$35.6 million), an increase of 127.4% from RMB 106.8 million in the second quarter of 2009 and a decrease of 35.6% from RMB 377.1 million in the third quarter of 2008. Operating margin was 10.9% in the third quarter of 2009, compared to 7.1% in the second quarter of 2009 and 17.1% in the third quarter of 2008. The increase in operating margin from the second quarter of 2009 was mainly due to increased gross margin and decreased operating expenses as a percentage of net revenues.

Interest Expense

Interest expense was RMB 100.6 million (US$14.7 million) in the third quarter of 2009, compared to RMB 115.9 million in the second quarter of 2009 and RMB 34.8 million(3) in the third quarter of 2008.

After excluding non-cash interest expenses, interest expense was RMB 68.2 million (US$10.0 million) in the third quarter of 2009, compared to RMB 79.1 million in the second quarter of 2009 and RMB 31.6 million in the third quarter of 2008. The weighted average interest rate for the borrowings in the third quarter of 2009 was 6.66%, a decrease from 6.88% in the second quarter of 2009, both measured on a basis excluding non-cash interest expenses. The decrease in weighted average interest rate was a result of the Company's efforts to reduce funding costs.

Foreign Currency Exchange Gain

Foreign currency exchange gain was RMB 71.8 million (US$10.5 million) in the third quarter of 2009, compared to a foreign currency exchange gain of RMB 108.7 million in the second quarter of 2009 and a foreign currency exchange loss of RMB 133.1 million in the third quarter of 2008. The foreign currency exchange gain in the third quarter of 2009 was primarily due to the appreciation of the Euro against the Renminbi.

Income Tax Expense

Income tax expense was RMB 31.0 million (US$4.5 million) in the third quarter of 2009, compared to an income tax expense of RMB 16.0 million in the second quarter of 2009 and an income tax benefit of RMB 0.2 million in the third quarter of 2008. The increase in income tax expense from the second quarter of 2009 was primarily attributable to the increased net operating income generated by Tianwei Yingli. Under the PRC Enterprise Income Tax Law and the various implementation rules, Tianwei Yingli was subject to an enterprise income tax rate of 0% in 2008 and 12.5% in 2009, and Yingli Energy (China) Company Limited ("Yingli China"), a wholly-owned subsidiary of the Company, was subject to an enterprise income tax rate of 15% in both 2008 and 2009.

Net Income

As a result of the factors discussed above, net income was RMB 120.8 million (US$17.7 million) in the third quarter of 2009, compared to a net loss of RMB 393.7 million in the second quarter of 2009 and net income of RMB 147.6 million in the third quarter of 2008. Diluted earnings per ordinary share and per ADS was RMB 0.79 (US$0.12) in the third quarter of 2009, compared to diluted loss per ordinary share and per ADS of RMB 3.03 in the second quarter of 2009.

On an adjusted non-GAAP basis, net income was RMB 184.2 million (US$27.0 million) in the third quarter of 2009, compared to adjusted non-GAAP net income of RMB 119.8 million in the second quarter of 2009. Adjusted non-GAAP diluted earnings per ordinary share and per ADS was RMB 1.20 (US$0.18) in the third quarter of 2009, compared to adjusted non-GAAP diluted earnings per ordinary share and per ADS of RMB 0.91 in the second quarter of 2009.

Balance Sheet Analysis

As of September 30, 2009, Yingli Green Energy had RMB 2,657.6 million (US$389.3 million) in cash and restricted cash, and RMB 3,045.3 million (US$446.1 million) in working capital, compared to RMB 2,620.6 million in cash and restricted cash, and RMB 4,356.4 million in working capital, as of June 30, 2009.

Long-term bank borrowings decreased to RMB 1,107.5 million (US$162.2 million) as of September 30, 2009 from RMB 1,971.9 million as of June 30, 2009 and short-term borrowings increased to RMB 3,142.8 million (US$460.4 million) as of September 30, 2009 from RMB 1,817.5 million as of June 30, 2009. The change in the balances of long-term bank borrowings and short-term borrowings in the third quarter was primarily due to the reclassification of long-term bank borrowings and short-term borrowings.

As of the date of this press release, the Company had approximately RMB 7,623 million in authorized lines of credit, of which RMB 4,897 million had been utilized.

Business Outlook for Full Year 2009

Given the strong third quarter results and greater visibility into market demand for the fourth quarter, the Company is updating its annual PV module shipment target to be in the estimated range of 490 MW to 500 MW from the previous expected range of 450 MW to 500 MW for fiscal year 2009, which represents an increase of 74.0% to 77.6% compared to fiscal year 2008.

In addition, the Company is updating its gross margin target for fiscal year 2009 to be in the estimated range of 19% to 20% from the previous expected range of 18% to 20%.

Non-GAAP Financial Measures

To supplement the financial measures calculated in accordance with GAAP, this press release includes certain non-GAAP financial measures of adjusted net income (loss) and adjusted diluted earnings (loss) per ordinary share and per ADS, each of which is adjusted to exclude items related to share-based compensation, accretion of the non-cash interest expense resulting from the derivative liabilities bifurcated from the Company's convertible notes issued in January 2009, from the beneficial conversion feature from the convertible notes issued in July 2009, from the freestanding warrants issued in connection with a loan facility provided by ADM Capital in April 2009, and from the equity component bifurcated from the Company's convertible notes issued in December 2007 upon the adoption and retroactive application of FSP APB14-1, the non-cash interest expense in connection with the conversion of the Company's convertible notes issued in January 2009, the non-cash interest expense in connection with the change in the fair value of interest rate swap entered into in June 2009, the non-cash loss on debt extinguishment resulting from the early full repayment of ADM Capital loan, the subsequent non-cash changes in the fair value of the derivative liabilities and amortization of intangible assets arising from purchase price allocation in connection with a series of acquisitions of equity interests in Tianwei Yingli.

The Company believes excluding these items from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company's core operating results as such items are not directly attributable to the underlying performance of the Company's business operations and do not impact its cash earnings. The Company also believes these non-GAAP financial measures are important to help investors understand the Company's current financial performance and future prospects and compare business trends among different reporting periods on a consistent basis. These non-GAAP financial measures should be considered in addition to financial measures presented in accordance with GAAP, but should not be considered as a substitute for, or superior to, financial measures presented in accordance with GAAP. For a reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP financial measure, please see the financial information included elsewhere in this press release.

Currency Conversion

Solely for the convenience of readers, certain Renminbi amounts have been translated into U.S. dollar amounts at the rate of RMB 6.8262 to US$1.00, the noon buying rate in New York for cable transfers of Renminbi per U.S. dollar as set forth in the H.10 weekly statistical release of the Federal Reserve Board, as of September 30, 2009. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollar amounts at such rate, or at any other rate. The percentages stated in this press release are calculated based on Renminbi.

Sourse: Yingli Green Energy

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