The article discusses the downfall of three major Chinese photovoltaic companies—Yingli, Suntech, and Saiwei—once seen as industry leaders. A few years ago, the booming solar market created wealth myths, with these giants at the forefront. However, the sudden cooling of the industry led to massive losses, debt crises, and delisting pressures, making 2012 a particularly tough year for them.
Despite their struggles, they are in a better position than many smaller PV companies that have already collapsed. With government rescue policies and the industry beginning to recover, these top firms are hoping to emerge stronger from the crisis and regain their footing in the evolving market.
Jiangxi LDK (Saiwei) remains deeply in debt. Five years ago, when its founder Peng Xiaofeng’s personal assets were valued at over 3 billion yuan, the company was a hot topic in the financial world. Today, its market value has plummeted to just 240 million USD, with high debt levels and a strained capital chain. Local governments have stepped in to provide support.
In December 2012, LDK sold power plant assets again to reduce debt, marking the second such move this year. The company also reported a net loss of $136.9 million in the third quarter, its sixth consecutive quarterly loss. Despite these challenges, LDK is trying to improve its situation by forming a joint venture with Pingmei Shenma Group to promote photovoltaic projects in Henan Province. Additionally, the local government-backed company Hengrui New Energy is investing $23 million in shares to help stabilize the firm.
However, industry experts remain skeptical about the long-term effectiveness of these measures. While they may ease short-term financial pressure, it's unclear if they will truly help LDK return to profitability.
Wuxi Suntech is also facing severe financial difficulties. Over the past year, the company has experienced declining revenue and persistent net losses. Its gross margin dropped sharply, and its debt-to-equity ratio reached 81.8%. The company has reduced its production capacity and is dealing with frequent executive turnover, which adds to its instability.
SunTech is expected to face even greater financial pressure next year, especially with a $575 million convertible bond due in March. It has been seeking new arrangements with major banks, but the conditions are harsh—requiring the founder, Shi Zhengrong, to give up control or exit entirely. If Suntech can't meet its obligations, it could face a debt-to-equity swap, leading to further stock price declines and potential delisting.
Yingli, on the other hand, shows some signs of recovery. In the third quarter, despite a significant loss, the company exceeded revenue expectations. It is shifting its focus away from the European market and expanding into domestic and emerging markets. Yingli is also moving downstream to build photovoltaic power plants, aiming to increase its market share and become the world's largest solar company in terms of shipments.
With a growing presence in China and rising demand in emerging markets, Yingli is optimistic about turning profits in the first half of next year. The company is adapting to the changing landscape and positioning itself for a stronger future in the global solar industry.
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