Yingli Green Energy (NYSE:YGE) and other Chinese panel makers like Suntech Power (NYSE:STP) may face anti-dumping charges in Europe if German player SolarWorld goes ahead with its plans to begin such proceedings in Europe.  SolarWorld’s CEO Mr. Frank Asbeck called upon European solar equipment manufacturers to join hands and initiate a case against low cost Chinese players with the European Commission’s Competition Agency. SolarWorld has spearheaded similar action in the U.S. where a commission has been set up to investigate unfair advantages enjoyed by solar companies in China.
We have a $5 price estimate for Yingli Green Energy, which is at a 20% premium over its current stock price.
The talk of anti-dumping allegations comes in the backdrop of solar companies in Germany continuing to struggle despite a record 3 GW of generation capacity being added within the country in the month of December. Low panel prices, driven by Chinese companies looking to shed inventory was one of the factors that led to high sales.  Mr. Asbeck accused Chinese players of dumping panels at below market costs. Two German PV firms filed for insolvency last month despite booming sales.
Chinese solar companies are already being investigated in the U.S. for benefiting unfairly from government subsidies. Panel imports in the U.S. could face duties if the claims are upheld by the commission. Chinese players like Yingli could be forced to set up manufacturing facilities outside of China if their imports are subject to tariffs. (See: Suntech, Trina May be Hit As U.S. Trade Panel Looks Into Import Tariffs)
Yingli’s sales are mostly concentrated in European markets such as Germany and Italy and therefore the new charges may affect it more than the investigation being held in the U.S. A major portion of our estimated value for the company comes from its module sales in Germany.Notes:
- Solarworld Planning China Anti-Dumping Case in Europe, CEO Says, Bloomberg [↩] [↩]