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April 16, 2014Trina and Yingli revise their Q1 2014 shipment projections downward
Both Trina Solar (TSL) and Yingli Green Energy (YGE) are big names in the solar industry today. They performed quite well in Q4 2013 
with big shipment numbers. While Trina achieved a 2.58 GW shipment, Yingli achieved a target of ~3,234 MW in 2013. Both the companies performed quite well, giving results in line with their targets. 2014 is going to be a big year for the solar industry, especially for China which plans to instal 14 GW in 2014. With such an environment of solar development all around, companies have made big promises and announced bigger targets to be achieved for the forthcoming 2014.
However both Trina Solar and Yingli Green Energy have failed to achieve their mentioned shipment targets in Q1 2014. While Trina had announced its solar module shipment target to be between ~670-700 MW, it now feels that shipment of ~540-570 MW can be achieved. Similarly, Yingli expects its actual shipments to be 30% lower than what it had expected earlier. The companies have given their reasons for the same. Trina Solar feels the reason for such a decrease was due to lower shipments to EU and Yingli thinks it could be primarily because of low Chinese demand and considerable delays in obtaining construction approvals for PV projects planned in Algeria.
Though the companies have given their reasons for the decline in shipments in Q1 itself, I believe that the projections made were quite aggressive, and if there is any slowdown in China, the companies may not be able to meet their shipment projections over the year. Thus the projections need to be more prudent and the companies need to be more careful. As a result of such a decline between the actual and the targets, the price of both the stocks declined.
Jifan Gao, chairman and CEO of Trina Solar, said, “Given the temporary decrease in Q1 shipments to the European markets pending the finalization of the price undertaking adjustment, we are updating our guidance for the first quarter of 2014. We expect demand in certain European countries to remain strong, and our first-rate reputation and strong customer service will continue to allow Trina, as a market leader, to capture opportunities and achieve growth in the European markets. We will maintain our strategic focus on diversifying our business across a wider geographical footprint and delivering sustainable growth. We believe achieving increased gross margins will further support improved bottom line growth quarter over quarter.”