MORE CHINA SOLAR GROWTH

China Tightens Its Grip on Solar
Travis Holum, November 22, 2010 (The Motley Fool)

"Chinese solar manufacturers can't seem to help expanding capacity faster than anyone expects. Maybe it's the cheap money available to Chinese companies, growing demand around the world, or improving margins…China rules our solar universe right now.

"Solar leader Yingli Green Energy continued a strong earnings season for solar…The company keeps pushing more and more panels out, increasing module output 25.2% since the second quarter and planning for 1.7 gigawatts of capacity by the end of next year."

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"The headline numbers jump out…Revenue was up 50% to $490.9 million and earnings per share jumped to $0.44 from $0.12 last year. But with solar, the devil is in the details.

"Yingli Green Energy's gross margin was 33.3%, approaching First Solar's sector- leading 40.3%. The company is still having trouble cutting costs, as non-silicon manufacturing costs were flat from the second quarter at $0.74 per watt…[W]hen Solarfun (Nasdaq: SOLF) reported that the cost per watt actually rose in the third quarter, [it signaled] an end to solar's steep price drop."

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"…[Like] bullish sentiments from the rest of the sector for 2011…Yingli Green Energy has 721 megawatts of modules under contract for 2011, with prepayments required from most customers; it expects to have one gigawatt under contract by the end of the year.

"Yingli Green Energy stands above some of its competitors because it owns the entire module supply chain, reducing risk and increasing margins. Investors are starting to get worried about 2011…[but] if 2011 is as tough as some suspect, Yingli Green Energy should be able to weather it better than most competitors. No matter what 2011 brings…China has become the epicenter of the solar industry."