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Cayman Islands | 3674 | Not Applicable | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
Copies to: | ||
Leiming Chen Simpson Thacher & Bartlett LLP 35th Floor, ICBC Tower 3 Garden Road Central, Hong Kong (852) 2514-7600 | Chun Wei Sullivan & Cromwell LLP 28th Floor Nine Queen’s Road Central Hong Kong (852) 2826-8688 |
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Per ADS | Total | |||||||
Public offering price | US$ | US$ | ||||||
Underwriting discount | US$ | US$ | ||||||
Proceeds, before expenses, to us | US$ | US$ | ||||||
Proceeds, before expenses, to the selling shareholder | US$ | US$ |
Goldman Sachs (Asia) L.L.C. | UBS Investment Bank |
Piper Jaffray | CIBC World Markets |
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EX-10.34 SALES AND PURCHASE CONTRACT |
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This summary highlights information about Yingli Green Energy Holding Company Limited, or Yingli Green Energy, and Baoding Tianwei Yingli New Energy Resources Co., Ltd., or Tianwei Yingli, our principal operating subsidiary and about the offering contained elsewhere in this prospectus, and is qualified in its entirety by the more detailed information and financial statements contained elsewhere in this prospectus. You should carefully read the entire prospectus before making an investment decision, especially the information presented under the heading “Risk Factors” and the consolidated financial statements and notes included elsewhere in this prospectus. Yingli Green Energy was incorporated on August 7, 2006. On September 5, 2006, Yingli Group, an entity controlled by Mr. Liansheng Miao, the chairperson of the board of directors and chief executive officer of Yingli Green Energy who also controls our controlling shareholder, Yingli Power Holding Company Ltd., or Yingli Power, transferred its 51% equity interest in Tianwei Yingli to Yingli Green Energy. As Yingli Group and Yingli Green Energy were entities under common control at the time of the transfer, the 51% equity interest in Tianwei Yingli was recorded by us at the historical cost to Yingli Group, which approximated the historical carrying values of the assets and liabilities of Tianwei Yingli. For financial statements reporting purposes, Tianwei Yingli was deemed to be our predecessor for periods prior to September 5, 2006. In our discussions of the year ended December 31, 2006, we refer to certain line items in the financial statements as “combined” for comparative purposes. These unaudited combined amounts represent the addition of the amounts for certain financial statement line items or captions of Tianwei Yingli, our predecessor, for the period from January 1, 2006 through September 4, 2006, and the amounts for the corresponding financial statement line items or captions of Yingli Green Energy, for the period from August 7, 2006 (date of inception) through December 31, 2006. For the period from August 7, 2006 through September 4, 2006, during which the financial statements of the predecessor and those of Yingli Green Energy overlap, Yingli Green Energy did not engage in any business or operations. The unaudited combined financial data for the year ended December 31, 2006 do not comply with accounting principles generally accepted in the United States, or U.S. GAAP. We are including these unaudited combined amounts to supplementally provide information that we believe will be helpful to gaining a better understanding of our results of operations and improve the comparative analysis against the prior periods, each of which was for a full fiscal year. These unaudited combined amounts do not purport to represent what our financial condition, results of operations or cash flows would have been in such period if Yingli Group had transferred its 51% equity interest in Tianwei Yingli to us on January 1, 2006. | |
In this prospectus, except as otherwise indicated or as the context may otherwise require, all references to “Yingli Green Energy,” “we,” “the Company,” “us” and “our” refer to Yingli Green Energy Holding Company Limited and, unless otherwise indicated or as the context may otherwise require, to our predecessor, Tianwei Yingli, and its consolidated subsidiaries. |
We are one of the leading vertically integrated photovoltaic, or PV, product manufacturers in China. Through Tianwei Yingli, our principal operating subsidiary based in China, we design, manufacture and sell PV modules, and design, assemble, sell and install PV systems that are connected to an electricity transmission grid or those that operate on astand-alone basis. With an annual production capacity of 95 megawatts of polysilicon ingots and wafers, 90 megawatts of PV cells and 100 megawatts of PV modules as of the date of this prospectus, we believe we are currently one of the largest manufacturers of PV products in China as measured by annual production capacity. Except for the production of polysilicon materials that are used to manufacture polysilicon ingots and wafers, our products and services substantially cover the entire PV industry value chain from the manufacture of multicrystalline polysilicon ingots and wafers, PV cells, PV modules and PV systems to PV system installation. We believe we are one of the few large-scale PV companies in China to have adopted vertical integration as their business model. Our end-products include PV modules and PV systems in different sizes and power outputs. We sell PV modules under our own brand name, Yingli, to PV system integrators and distributors located in various markets around the world, including Germany, Spain, China and the United States. |
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• | government subsidies and economic incentives; | |
• | advances in technologies making solar power more cost-efficient; | |
• | rising demand for and increasing costs of fossil energy resources; | |
• | increasing environmental concerns over conventional energy; and | |
• | narrowing cost differentials between solar and conventional energy sources. |
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• | continuing reliance on government subsidies and economic incentives; | |
• | need for further cost-competitiveness; | |
• | raw materials supply shortage; and | |
• | aesthetic concern. |
• | vertically integrated business model; | |
• | cost-effective and efficient manufacturing process; | |
• | high-quality products and growing brand recognition; | |
• | steadily improving research and development capability; | |
• | established customer relationships; and | |
• | experienced management team. |
• | expand PV system sales to overseas markets; | |
• | expand global reach for our products; | |
• | secure and strengthen stable and long-term relationships with polysilicon suppliers; | |
• | achieve technological advances through dedicated and continuous research and development efforts; | |
• | increase production capacity; and | |
• | expand market share in China. |
• | risks associated with our ability to obtain sufficient quantities of quality silicon raw materials in a timely manner; | |
• | risks associated with the potential reduction in or discontinuation of government subsidies and economic incentives for solar energy applications which could reduce demand for our products and, in turn, our revenues; | |
• | uncertainties associated with responding effectively to competitive pressures from our competitors in the PV modules and PV systems markets as well as from conventional energy and other renewable energy sources, including other solar energy systems; | |
• | risks associated with our ability to expand our operations and manage such expansion effectively; |
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• | risks associated with our ability to successfully implement our overseas expansion; | |
• | risks associated with our ability to improve manufacturing efficiency or yield commercially viable new products; and | |
• | uncertainties associated with our ability to establish and maintain an effective internal control system and procedures. |
• | Yingli Power Holding Company Ltd., or Yingli Power, became our controlling shareholder, holding 59.58% of our issued and outstanding share capital on an as-converted, fully diluted basis immediately prior to this offering; | |
• | on September 5, 2006, Yingli Group, an entity controlled by Mr. Liansheng Miao, our chairperson and chief executive officer, who also controls our controlling shareholder, Yingli Power, transferred to us its 51% controlling equity interest in Tianwei Yingli. As a result of such transfer, Tianwei Yingli became our subsidiary. For financial statements reporting purposes, Tianwei Yingli is deemed to be our predecessor; | |
• | certain investors became holders of our Series A preferred shares, Series B preferred shares, warrants to purchase our ordinary shares and mandatory convertible bonds convertible into our ordinary shares, which represent on an aggregate basis 40.42% of our issued and outstanding share capital on an as-converted, fully diluted basis immediately prior to this offering; | |
• | our equity interest in Tianwei Yingli increased to 62.13% and would increase to 70.11% upon the completion of relevant PRC registration procedures for the additional equity contribution into Tianwei Yingli which was funded by the issuance of the Series B preferred shares and other financings as described in “Restructuring — Private Equity Investments and Other Financing Following the Restructuring;” and | |
• | Tianwei Yingli became a Sino-foreign equity joint venture enterprise established under PRC law and subject to certain PRC laws and regulations as described in “PRC Government Regulations — Equity Joint Ventures.” |
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(1) | Mr. Liansheng Miao, our chairperson and chief executive officer, owns all of the issued and outstanding share capital of Yingli Power and is the sole director of Yingli Power. Mr. Miao is also vice chairperson and chief executive officer of Tianwei Yingli. The principal business of Yingli Power is holding of investment securities in Yingli Green Energy. Mr. Miao beneficially owns 100% equity interest in Yingli Group, which transferred its controlling equity interest in Tianwei Yingli to us. Upon completion of this offering, Mr Miao’s family trust will beneficially own all of the issued and outstanding share capital of Yingli Power. |
(2) | Indicates jurisdiction of incorporation. |
(3) | Currently include (i) Inspiration Partners Limited, the holder of all of our outstanding Series A preferred shares, (ii) Baytree Investments (Mauritius) Pte Ltd., an affiliate of Temasek Holdings Pte Ltd., and 13 other investors that hold our Series B preferred shares, (iii) holders of the mandatory exchangeable notes issued by Yingli Power, our controlling shareholder, whose terms substantially mirror the mandatory convertible bonds issued by us to Yingli Power on the same date and which are mandatorily exchangeable into our ordinary shares and (iv) China Sunshine Investment Co., Ltd. and Fairdeal Development Ltd., holders of our ordinary shares. All outstanding Series A preferred shares, Series B preferred shares and mandatory exchangeable notes are automatically convertible or exchangeable into our ordinary shares upon completion of this offering. 11 of our Series B preferred investors hold warrants to purchase our ordinary shares prior to this offering, but these warrants have been rendered not exercisable under an agreement, dated May 21, 2007, among us, Yingli Power, Mr. Liansheng Miao and Baytree Investments (Mauritius) Pte Ltd., the lead Series B preferred shareholder. See “Restructuring — Private Equity Investments and Other Financings Following the Restructuring” and “Principal and Selling Shareholders.” |
(4) | Tianwei Baobian is controlled and 51.1% owned by Baoding Tianwei Group Co., Ltd., or Tianwei Group, a wholly state-owned limited liability company established in the PRC, which is in turn controlled by the State-asset Administration and Supervision Committee of the Baoding Municipal Government in Hebei Province of the PRC. |
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(5) | Indicates the percentage as of the date of this prospectus. The equity interests in Tianwei Yingli held by Yingli Green Energy and Tianwei Baobian would change to 70.11% and 29.89%, respectively, upon the completion of relevant PRC registration procedures for the additional equity contribution of US$118 million in the aggregate from portions of the proceeds from the issuance and sale of the mandatory redeemable bonds, the mandatory convertible bonds and the Series B preferred shares into the registered capital of Tianwei Yingli. See “Restructuring — Private Equity Investments and Other Financings Following the Restructuring.” Upon completion of the equity contribution to Tianwei Yingli of a part of the proceeds from this offering and the related PRC approval and registration procedures, the equity interests in Tianwei Yingli held by Yingli Green Energy and Tianwei Baobian would change to 73.6% and 26.4%, respectively. |
(6) | The principal business of Tianwei Yingli is the design, manufacture and sale of PV modules and the design, assembly, sale and installation of PV systems. See “Business — Overview.” |
(7) | The remaining 36% equity interest of Chengdu Yingli is owned by Shiqian Chen, Xiao Wei, Jiafu Yu and Shiguang Du, each owning 9%. Mr. Chen is a director of Chengdu Yingli, and Messrs. Wei, Yu and Du are its executive officers. None of these individuals is otherwise affiliated with us. |
(8) | The remaining 50% equity interest of Tibet Tianwei Yingli is owned, as to 30%, by Weiping Yu, vice chairperson of Tibetan Yingli and, as to the other 20%, by Tibetan Energy Demonstration Center, an entity wholly owned by the Tibetan Bureau of Technology, a Tibetan government agency. Neither Mr. Yu nor Tibetan Energy Demonstration Center is otherwise affiliated with us. |
(9) | The remaining 49% equity interest of Baoding Yingli is owned by Northeast Trading Co., Ltd. (Japan), which is not our affiliate. |
(10) | The remaining 1% equity interest of Tibet Keguang is owned by Huasheng Deng, which is not our affiliate. |
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• | “€” and “Euro” are to the legal currency of the member states of the European Union that adopted such currency as their single currency in accordance with the Treaty Establishing the European Community (signed in Rome on March 25, 1957), as amended by the Treaty on European Union (signed in Maastricht on February 7, 1992); | |
• | “$,” “US$” and “U.S. dollars” are to the legal currency of the United States; | |
• | “China” and the “PRC” are to the People’s Republic of China, excluding, for the purposes of this prospectus, Taiwan and the special administrative regions of Hong Kong and Macau; and | |
• | “RMB” and “Renminbi” are to the legal currency of the PRC. |
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Price per ADS | We currently estimate the initial public offering price will be between US$11.00 and US$13.00 per ADS. | |
This Offering: | ||
ADSs offered by us | 26,550,000 ADSs | |
ADSs offered by our controlling shareholder | 2,450,000 ADSs | |
Total | 29,000,00 ADSs | |
Ordinary shares outstanding immediately after this offering | 126,923,609 ordinary shares, excluding ordinary shares issuable upon the exercise of outstanding share options and ordinary shares reserved for issuance under our 2006 stock incentive plan and after giving effect to the automatic conversion of all of our outstanding preferred shares and mandatory convertible bonds upon the completion of this offering. | |
Option to purchase additional ADSs | Certain selling shareholders have granted to the underwriters an option, exercisable for 30 days after the date of this prospectus, to purchase from these selling shareholders up to an aggregate of 4,350,000 additional ADSs at the initial public offering price listed on the cover page of this prospectus, less underwriting discount. | |
Tianwei Baobian’s subscription right | If Tianwei Baobian, which holds a minority equity interest in Tianwei Yingli, exercises the right we granted to it under a PRC law-governed joint venture contract between us and Tianwei Baobian, we will be obligated to issue, after this offering, a number of our ordinary shares to Tianwei Baobian in exchange for all but not part of its equity interest in Tianwei Yingli at the time of the exercise according to a pre-agreed formula. The number of our ordinary shares to be newly issued upon the exercise of Tianwei Baobian’s subscription right will be substantial, and upon such exercise, the equity interest in us held by you in the form of ADSs will be substantially diluted. See “Restructuring — Joint Venture Contract — Subscription Right.” | |
The ADSs | Each ADS represents one ordinary share, par value US$0.01 per share. The ADSs will be evidenced by American Depositary Receipts, or ADRs. | |
The depositary will be the holder of the ordinary shares underlying the ADSs and you will have the rights of an ADR holder as provided in the deposit agreement among us, the depositary and owners and beneficial owners of ADSs from time to time. | ||
You may surrender your ADSs to the depositary to withdraw the ordinary shares underlying your ADSs. The depositary will charge you a fee for such an exchange. | ||
We may amend or terminate the deposit agreement for any reason without your consent. If an amendment becomes effective, you will be bound by the deposit agreement as amended if you continue to hold your ADSs. |
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To better understand the terms of the ADSs, you should carefully read the section in this prospectus entitled “Description of American Depositary Shares.” We also encourage you to read the deposit agreement, which is an exhibit to the registration statement that includes this prospectus. | ||
Use of proceeds | We estimate that we will receive net proceeds of approximately US$290.4 million from this offering, assuming an initial public offering price of US$12.00 per ADS, being the midpoint of the estimated range of the initial public offering price after deducting underwriting discounts and estimated aggregate offering expenses payable by us. | |
We intend to use our net proceeds from this offering for the following purposes: | ||
• approximately US$252.4 million to make an equity contribution to Tianwei Yingli, which would, subject to relevant PRC regulatory approvals and registrations, increase our equity interest in Tianwei Yingli from 70.11% (following our completion of relevant PRC registration procedures for the injection into Tianwei Yingli of the proceeds from the Series B and other financings) to approximately 73.6% immediately following such equity contribution; and | ||
• US$38 million to fully redeem the mandatory redeemable bonds issued by us in November 2006. | ||
We intend to procure Tianwei Yingli to use the proceeds from our equity contribution in the amount of US$252.4 million for the following purposes: | ||
• approximately US$200.0 million to fund a majority of the planned expansion of Tianwei Yingli’s manufacturing capacity for the production of silicon ingots and wafers, PV cells and PV modules each to reach 400 megawatts by the end of 2008; | ||
• approximately US$50.0 million to purchase, or make prepayments for, raw materials; and | ||
• the remaining amount for other general corporate purposes. | ||
See “Use of Proceeds” for additional information. | ||
We will not receive any of the proceeds from the sale of the ADSs by the selling shareholders. | ||
Risk factors | See “Risk Factors” and other information included in this prospectus for a discussion of the risks you should carefully consider before deciding to invest in our ADSs. | |
Listing | Our application to list our ADSs on the New York Stock Exchange, or the NYSE, has been approved. Our ordinary shares will not be listed on any exchange or quoted for trading on anyover-the-counter trading system. | |
Proposed New York Stock Exchange symbol | “YGE” | |
Depositary | JPMorgan Chase Bank, N.A. |
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Lock-up | We, the selling shareholders, our directors, executive officers and substantially all of our other existing shareholders have agreed with the underwriters not to sell, transfer or dispose of any ADSs, ordinary shares or similar securities for a period of 180 days after the date of this prospectus. See “Underwriting.” |
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Yingli Green | |||||||||||||||||||||||||||||||||
Predecessor | Energy | Combined | Yingli Green Energy | ||||||||||||||||||||||||||||||
For the | For the | ||||||||||||||||||||||||||||||||
period from | period from | ||||||||||||||||||||||||||||||||
For the year ended | January 1, 2006 | August 7, 2006 | For the three-month period | ||||||||||||||||||||||||||||||
December 31, | ended March 31, | ||||||||||||||||||||||||||||||||
through | through | For the year ended | |||||||||||||||||||||||||||||||
2004 | 2005 | September 4, 2006 | December 31, 2006 | December 31, 2006 | 2007 | ||||||||||||||||||||||||||||
(in thousands of RMB) | (in thousands | (in thousands | (in thousands | (in thousands | |||||||||||||||||||||||||||||
(in thousands of | of RMB) | of US$) | of RMB, | of US$, except | |||||||||||||||||||||||||||||
RMB, except for | except for per | for per share | |||||||||||||||||||||||||||||||
per share and per | share and per | and per ADS | |||||||||||||||||||||||||||||||
ADS data) | ADS data) | data) | |||||||||||||||||||||||||||||||
Consolidated Statement of Income Data | |||||||||||||||||||||||||||||||||
Net revenues | 120,483 | 361,794 | 883,988 | 754,793 | 1,638,781 | 212,189 | 428,553 | 55,489 | |||||||||||||||||||||||||
Gross profit | 25,180 | 108,190 | 272,352 | 179,946 | 452,298 | 58,564 | 89,610 | 11,603 | |||||||||||||||||||||||||
Operating expenses | 11,436 | 24,515 | 37,721 | 47,658 | 85,379 | 11,055 | 48,642 | 6,298 | |||||||||||||||||||||||||
Income from operations | 13,744 | 83,675 | 234,631 | 132,288 | 366,919 | 47,509 | 40,968 | 5,305 | |||||||||||||||||||||||||
Interest expense, (net) | (6,324 | ) | (5,003 | ) | (21,923 | ) | (25,201 | ) | (47,124 | ) | (6,102 | ) | (18,873 | ) | (2,444 | ) | |||||||||||||||||
Income tax (expense) benefit | (1,221 | ) | (12,736 | ) | (22,546 | ) | (22,968 | ) | (45,514 | ) | (5,893 | ) | 360 | 47 | |||||||||||||||||||
Income before minority interest | 6,013 | 65,918 | 186,147 | 75,302 | 261,449 | 33,852 | 22,386 | 2,899 | |||||||||||||||||||||||||
Minority interest | 76 | 36 | 76 | (45,285 | ) | — | (3) | — | (3) | (14,046 | ) | (1,819 | ) | ||||||||||||||||||||
Net income | 6,089 | 65,954 | 186,223 | 30,017 | — | (3) | — | (3) | 8,340 | 1,080 | |||||||||||||||||||||||
Net income (loss) attributable to ordinary shareholders | 23,048 | — | (3) | — | (3) | (22,157 | ) | (2,869 | ) | ||||||||||||||||||||||||
Net income (loss) attributable per ordinary share — basic(1)(6) | 0.36 | — | (3) | — | (3) | (0.36 | ) | (0.05 | ) | ||||||||||||||||||||||||
Net income (loss) attributable per ordinary share — diluted(1)(6) | 0.36 | — | (3) | — | (3) | (0.36 | ) | (0.05 | ) | ||||||||||||||||||||||||
Net income (loss) attributable per ADS — basic(1)(6) | 0.36 | — | (3) | — | (3) | (0.36 | ) | (0.05 | ) | ||||||||||||||||||||||||
Net income (loss) attributable per ADS — diluted(1)(6) | 0.36 | — | (3) | — | (3) | (0.36 | ) | (0.05 | ) | ||||||||||||||||||||||||
Pro forma net income attributable per ordinary share — basic(2)(6) | 0.40 | — | (3) | — | (3) | 0.18 | 0.02 | ||||||||||||||||||||||||||
Pro forma net income attributable per ordinary share — diluted(2)(6) | 0.40 | — | (3) | — | (3) | 0.17 | 0.02 | ||||||||||||||||||||||||||
Pro forma net income attributable per ADS — basic(2)(6) | 0.40 | — | (3) | — | (3) | 0.18 | 0.02 | ||||||||||||||||||||||||||
Pro forma net income attributable per ADS — diluted(2)(6) | 0.40 | — | (3) | — | (3) | 0.17 | 0.02 |
Yingli Green | Yingli Green | ||||||||||||||||||||||||
Predecessor | Energy | Combined | Energy | ||||||||||||||||||||||
For the three- | |||||||||||||||||||||||||
For the year | For the | For the | month period | ||||||||||||||||||||||
ended | period from | period from | ended | ||||||||||||||||||||||
December 31, | January 1, 2006 | August 7, 2006 | March 31, | ||||||||||||||||||||||
through | through | For the year ended | |||||||||||||||||||||||
2004 | 2005 | September 4, 2006 | December 31, 2006 | December 31, 2006 | 2007 | ||||||||||||||||||||
(in percentage) | (in percentage) | ||||||||||||||||||||||||
Other Consolidated Financial Data | |||||||||||||||||||||||||
Gross profit margin | 20.9 | % | 29.9 | % | 30.8 | % | 23.8 | % | 27.6 | % | 20.9 | % | |||||||||||||
Operating profit margin | 11.4 | % | 23.1 | % | 26.5 | % | 17.5 | % | 22.4 | % | 9.6 | % | |||||||||||||
Net profit margin | 5.1 | % | 18.2 | % | 21.1 | % | 4.0 | % | — | (3) | 1.9 | % |
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Predecessor | Yingli Green Energy | ||||||||||||||||||||||||||||
As of December 31, | As of | As of | |||||||||||||||||||||||||||
September 4, | December 31, | ||||||||||||||||||||||||||||
2004 | 2005 | 2006 | 2006 | As of March 31, 2007 | |||||||||||||||||||||||||
(in thousands | (in thousands | (in thousands | (in thousands | ||||||||||||||||||||||||||
(in thousands of RMB) | of RMB) | of US$) | of RMB) | of US$) | |||||||||||||||||||||||||
Consolidated Balance Sheet Data | |||||||||||||||||||||||||||||
Total current assets | 62,437 | 335,372 | 1,272,347 | 1,725,885 | 223,468 | 2,113,241 | 273,622 | ||||||||||||||||||||||
Total assets | 204,076 | 704,775 | 1,787,535 | 2,813,461 | 364,287 | 3,367,866 | 436,071 | ||||||||||||||||||||||
Total current liabilities | 132,570 | 566,471 | 1,473,396 | 668,241 | 86,524 | 1,080,822 | 139,945 | ||||||||||||||||||||||
Mandatory redeemable bonds payable to Yingli Power | — | — | — | 293,110 | 37,952 | 292,460 | 37,868 | ||||||||||||||||||||||
Mandatory convertible bonds payable to Yingli Power | — | — | — | 362,530 | 46,940 | 361,726 | 46,836 | ||||||||||||||||||||||
Total liabilities | 132,836 | 567,617 | 1,474,696 | 1,339,878 | 173,488 | 1,751,384 | 226,769 | ||||||||||||||||||||||
Minority interest | 606 | 569 | 983 | 387,716 | 50,201 | 401,762 | 52,020 | ||||||||||||||||||||||
Series A and B preferred shares | — | — | — | 1,017,337 | 131,725 | 1,066,674 | 138,113 | ||||||||||||||||||||||
Total owners’ / shareholder’s equity | 70,634 | 136,589 | 311,856 | 68,530 | 8,873 | 148,046 | 19,169 |
For the three- | ||||||||||||||||
month periods | ||||||||||||||||
For the year ended | ended | |||||||||||||||
December 31, | March 31, | |||||||||||||||
2004 | 2005 | 2006 | 2007 | |||||||||||||
Consolidated Operating Data | ||||||||||||||||
PV modules sold (in megawatts)(4) | 4.7 | 11.9 | 51.3 | 14.6 | ||||||||||||
Average selling price of PV modules (per watt in US$)(5) | 2.83 | 3.49 | 3.82 | 3.76 |
(1) | Tianwei Yingli, our predecessor, is not a share-based company and had no outstanding shares for the periods presented, and therefore, we have not presented earnings per share for Tianwei Yingli. |
(2) | To give effect to (i) the automatic conversion of all of our outstanding preferred shares into ordinary shares upon completion of this offering and (ii) the automatic conversion of all of our outstanding mandatory convertible bonds into ordinary shares upon completion of this offering, as if the conversion had taken place as of August 7, 2006 (date of inception). |
(3) | This line item for the combined period is not presented because it is not comparable to the item that would have been in this period if Yingli Group had transferred its 51% equity interest in Tianwei Yingli to us on January 1, 2006 because the minority interest for the period from August 7, 2006 through December 31, 2006, which reflects the ownership of Tianwei Yingli not held by us, is not comparable or relevant to the results of operations of our predecessor. |
(4) | PV modules sold, for a given period, represents the total PV modules, as measured in megawatts, delivered to customers under then effective supply contracts during such period. |
(5) | We compute the average selling price of PV modules per watt for a given period as the total sales of PV modules divided by the total watts of the PV modules sold during such period, and translated into U.S. dollars at the noon buying rate at the end of such period as certified by the United States Federal Reserve Board. |
(6) | Commencing January 1, 2007, our primary operating subsidiary, Tianwei Yingli, certain exemptions from income tax. These income tax exemptions had the effect of increasing our net income by RMB 6.8 million (US$0.9 million) and decreasing our loss attributable to ordinary shareholders on a per share basis by RMB 0.11 (US$0.01) for the three-month period ended March 31, 2007. Prior to this period there was no tax exemption in place. |
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• | we may need to continue to contribute significant additional capital to Tianwei Yingli through the issuance of our equity or debt securities in order to finance the costs of developing the new facilities, which may not be conducted on reasonable terms or may not be conducted at all, and which could be dilutive to our existing shareholders. Such capital contribution would also require PRC regulatory approvals in order for the proceeds from such issuances to be transferred to Tianwei Yingli, which approvals may not be granted in a timely manner or at all; | |
• | we will be required to obtain governmental approvals, permits or documents of similar nature in respect of any new expansion projects, but it is uncertain whether such approvals, permits or documents will be obtained on time or at all; | |
• | we may experience cost overruns, delays, equipment problems and other operating difficulties; | |
• | we are using new equipment and technology to lower our unit capital and operating costs, but we cannot assure you that such effort will be successful; and | |
• | we may not have sufficient management resources to properly oversee capacity expansion as currently planned. |
• | our inability to integrate new operations, personnel, products, services and technologies; | |
• | unforeseen or hidden liabilities, including exposure to lawsuits associated with newly acquired companies; |
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• | the diversion of resources from our existing businesses; | |
• | disagreement with joint venture or strategic alliance partners; | |
• | contravention of regulations governing cross-border investment; | |
• | failure to comply with laws and regulations of the overseas markets into which we expand; | |
• | our inability to generate sufficient revenues to offset the costs and expenses of acquisitions, strategic investments, joint venture formations or other strategic alliances; and | |
• | potential loss of, or harm to, employees or customer relationships. |
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• | fluctuations in foreign currency exchange rates; | |
• | increased costs associated with maintaining the ability to understand the local markets and follow their trends, as well as develop and maintain effective marketing and distributing presence in various countries; | |
• | the availability of advances from our customers; | |
• | providing customer service and support in these markets; | |
• | difficulty with staffing and managing overseas operations; | |
• | failure to develop appropriate risk management and internal control structures tailored to overseas operations; | |
• | difficulty and cost relating to compliance with the different commercial and legal requirements of the overseas markets in which we offer or plan to offer our products and services; | |
• | failure to obtain or maintain certifications for our products or services in these markets; | |
• | inability to obtain, maintain or enforce intellectual property rights; |
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• | unanticipated changes in prevailing economic conditions and regulatory requirements; and | |
• | trade barriers such as export requirements, tariffs, taxes and other restrictions and expenses. |
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• | the level of government involvement; | |
• | the level of development; | |
• | the growth rate; | |
• | the control of foreign exchange; and | |
• | the allocation of resources. |
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• | the CSRC has jurisdiction over our offering; | |
• | given that we completed the transfer of our controlling equity interest in Tianwei Yingli before September 8, 2006, the date on which the new regulation became effective, it is not necessary for us to submit an application to the CSRC to obtain its approval of the listing and subsequent trading of our ADSs on the NYSE; and | |
• | if an application for the CSRC approval is required, we have a justifiable basis to request a waiver from the CSRC, if and when such procedures are established to obtain such a waiver. |
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• | announcements of technological or competitive developments; | |
• | regulatory developments in our target markets affecting us, our customers or our competitors; | |
• | announcements regarding patent litigation or the issuance of patents to us or our competitors; | |
• | announcements of studies and reports relating to the conversion efficiencies of our products or those of our competitors; | |
• | actual or anticipated fluctuations in our quarterly results of operations; | |
• | changes in financial projections or estimates about our financial or operational performance by securities research analysts; | |
• | changes in the economic performance or market valuations of other PV technology companies; | |
• | addition or departure of our executive officers and key research personnel; |
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• | release or expiry oflock-up or other transfer restrictions on our outstanding ordinary shares or ADSs; and | |
• | sales or perceived sales of additional ordinary shares or ADSs. |
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• | we have failed to provide the depositary with the notice of meeting and related voting materials at least 30 days prior to the date of such shareholders’ meeting; | |
• | we have instructed the depositary that we do not wish a discretionary proxy to be given; | |
• | we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting; | |
• | a matter to be voted on at the meeting would have a material adverse effect on shareholders; or | |
• | voting at the meeting is made on a show of hands. |
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• | our expectations regarding the worldwide demand for electricity and the market for solar energy; | |
• | our beliefs regarding the effects of environmental regulation, lack of infrastructure reliability and long-term fossil fuel supply constraints; | |
• | our beliefs regarding the inability of traditional fossil fuel-based generation technologies to meet the demand for electricity; | |
• | our beliefs regarding the importance of environmentally friendly power generation; | |
• | our expectations regarding governmental support for the deployment of solar energy; | |
• | our beliefs regarding the acceleration of adoption of solar technologies; | |
• | our expectations regarding advancements in our technologies and cost savings from such advancements; | |
• | our beliefs regarding the competitiveness of our PV products; | |
• | our beliefs regarding the advantages of our business model; | |
• | our expectations regarding the scaling of our manufacturing capacity; | |
• | our expectations regarding entering into or maintaining joint venture enterprises and other strategic investments; | |
• | our expectations regarding increased revenue growth and our ability to achieve profitability resulting from increases in our production volumes; | |
• | our expectations regarding our ability to secure raw materials in the future; | |
• | our expectations regarding the price trends of PV modules and polysilicon; | |
• | our beliefs regarding our ability to successfully implement our strategies; | |
• | our beliefs regarding our abilities to secure sufficient funds to meet our cash needs for our operations and capacity expansion. | |
• | our future business development, results of operations and financial condition; and | |
• | competition from other manufacturers of PV products, other renewable energy systems and conventional energy suppliers. |
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• | approximately US$252.4 million to make an equity contribution to Tianwei Yingli, which would, subject to obtaining relevant PRC regulatory approvals and registrations, increase our equity interest in Tianwei Yingli from 70.11% (following our completion of relevant PRC registration procedures for the injection into Tianwei Yingli of the proceeds from the Series B and other financings) to approximately 73.6% immediately following such equity contribution, and | |
• | US$38 million to redeem all of the outstanding mandatory redeemable bonds issued by us on November 13, 2006 to Yingli Power, our controlling shareholder. |
• | approximately US$200.0 million to fund a majority of the planned expansion of Tianwei Yingli’s manufacturing capacity for the production of polysilicon ingots and wafers, PV cells and PV modules each to reach 400 megawatts by the end of 2008. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Capital Expenditures” for more details; | |
• | approximately US$50.0 million to purchase, or prepay for, raw materials; and | |
• | the remaining amount for other general corporate purposes, such as potential strategic acquisitions of, or investments in, businesses, products and technologies that we believe will complement our current operations and strategies, although we are not currently in discussion with any parties regarding any such transaction. |
Principal | ||||||||||||||
Date of issuance | Maturity date | amount | Interest rate | Use of proceeds(1) | ||||||||||
November 13, 2006 | November 16, 2008 | US$ | 38,000,000 | Floating rate, based on the British Bankers Association Interest Settlement Rate for deposits in U.S. dollars | • Up to US$79,000,000, to make additional equity contribution to Tianwei Yingli and increase our equity interest in Tianwei Yingli | |||||||||
• Up to US$4,500,000 for interest payments under the mandatory redeemable bonds and the mandatory convertible bonds; and | ||||||||||||||
• The remaining balance for general corporate purposes |
(1) | Determined on an aggregated basis with the mandatory convertible bonds in the principal amount of US$47,000,000. |
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• | on an actual basis; | |
• | on a pro forma basis to give effect to (i) the automatic conversion of all of our outstanding preferred shares as of March 31, 2007 into 32,486,458 of our ordinary shares upon completion of this offering and (ii) the automatic conversion of all of our outstanding mandatory convertible bonds into 5,497,433 of our ordinary shares upon completion of this offering, which is based on a 3.73% effective equity interest in Tianwei Yingli and the number of our ordinary shares outstanding as of March 31, 2007 on a diluted basis, which reflects the assumption that 2,800,147 ordinary shares would be issued upon the exercise of the Series B warrants prior to the completion of this offering; and | |
• | on a pro forma, as adjusted basis to give effect to (i) the events listed in the preceding paragraph, (ii) the automatic redemption of all of our outstanding mandatory redeemable bonds upon completion of this offering, (iii) the exercise of a warrant granted to an affiliate of the Series A preferred shareholder on May 23, 2007 to purchase 678,811 ordinary shares at an exercise price of US$2.10 per share, (iv) the decrease of 157,345 ordinary shares in the number of ordinary shares required to be issued upon automatic conversion of all of our outstanding mandatory convertible bonds upon completion of this offering due to the signing of an agreement, dated May 21, 2007, among us, Yingli Power, Mr. Liansheng Miao and Baytree Investments (Mauritius) Pte Ltd., the lead Series B preferred shareholder, which rendered the Series B warrants not exercisable and, as a result, would decrease the total number of ordinary shares outstanding, for purposes of determining the number of ordinary shares to be issued upon conversion of the mandatory convertible bonds and (v) the issuance and sale of 26,550,000 ordinary shares in the form of ADSs by us in this offering, assuming an initial public offering price of US$12.00 per ADS, the midpoint of the estimated range of the initial public offering price, after deducting underwriting discount and estimated aggregate offering expenses payable by us. |
As of March 31, 2007 | ||||||||||||||||||||||||||
Pro forma, as | ||||||||||||||||||||||||||
Actual | Pro forma(1) | adjusted(1) | ||||||||||||||||||||||||
RMB | US$ | RMB | US$ | RMB | US$ | |||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Short-term borrowings: | ||||||||||||||||||||||||||
Short-term borrowings | 731,949 | 94,773 | 731,949 | 94,773 | 731,949 | 94,773 | ||||||||||||||||||||
Borrowings from related parties | 28,570 | 3,699 | 28,570 | 3,699 | 28,570 | 3,699 | ||||||||||||||||||||
Total short-term borrowings | 760,519 | 98,472 | 760,519 | 98,472 | 760,519 | 98,472 | ||||||||||||||||||||
Long-term borrowings: | ||||||||||||||||||||||||||
Mandatory redeemable bonds payable to Yingli Power | 292,460 | 37,868 | 292,460 | 37,868 | — | — | ||||||||||||||||||||
Mandatory convertible bonds payable to Yingli Power | 361,726 | 46,836 | — | — | — | — | ||||||||||||||||||||
Total Long-term borrowings | 654,186 | 84,704 | 292,460 | 37,868 | — | — | ||||||||||||||||||||
Series A redeemable convertible preferred shares, US$0.01 par value, 8,081,081 shares authorized, issued and outstanding as of March 31, 2007 (redemption value of US$23,133,600), nil shares issued and outstanding pro forma and pro forma, as adjusted; | 136,899 | 17,726 | — | — | — | — |
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As of March 31, 2007 | |||||||||||||||||||||||||||
Pro forma, as | |||||||||||||||||||||||||||
Actual | Pro forma(1) | adjusted(1) | |||||||||||||||||||||||||
RMB | US$ | RMB | US$ | RMB | US$ | ||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Series B redeemable convertible preferred shares, US$0.01 par value, 24,405,377 shares authorized, issued and outstanding as of March 31, 2007 (redemption value of US$160,480,003), nil shares issued and outstanding pro forma and pro forma, as adjusted;(2) | 929,775 | 120,387 | — | — | — | — | |||||||||||||||||||||
Shareholders’ equity: | |||||||||||||||||||||||||||
Ordinary shares, US$0.01 par value, 967,513,542 shares authorized and 61,868,252 shares issued and outstanding(1), 99,852,143 shares issued and outstanding pro forma and 126,923,609 pro forma, as adjusted, respectively | 4,905 | 635 | 7,843 | 1,016 | 9,937 | 1,287 | |||||||||||||||||||||
Additional paid-in capital(3) | 124,111 | 16,070 | 1,549,573 | 200,638 | 3,804,269 | 492,577 | |||||||||||||||||||||
Accumulated other comprehensive income | 18,139 | 2,349 | 18,139 | 2,349 | 18,139 | 2,349 | |||||||||||||||||||||
Retained earnings(4) | 891 | 115 | 891 | 115 | 891 | 115 | |||||||||||||||||||||
Total shareholders’ equity(3) | 148,046 | 19,169 | 1,576,446 | 204,118 | 3,833,236 | 496,328 | |||||||||||||||||||||
Total capitalization(3)(5) | 1,868,906 | 241,986 | 1,868,906 | 241,986 | 3,833,236 | 496,328 | |||||||||||||||||||||
(1) | Excludes 3,186,989 ordinary shares issuable upon the exercise of options outstanding or vesting of stock awards and 207,065 ordinary shares reserved for future issuance under our 2006 stock incentive plan as of March 31, 2007. |
(2) | Excludes the warrants issued to the Series B preferred shareholders, which have been rendered not exercisable under an agreement, dated May 21, 2007, among us, Yingli Power, Mr. Liansheng Miao and Baytree Investment (Mauritius) Pte Ltd., the lead Series B preferred shareholder. |
(3) | A US$1.00 increase (decrease) in the assumed initial public offering price of US$12.00 per ADS would increase (decrease) each of additional paid-in capital, total shareholders’ equity and total capitalization by US$25.0 million. |
(4) | Includes a restricted reserve of RMB 14.4 million (US$1.9 million), which may not be distributed as cash dividends under PRC regulations. |
(5) | Total capitalization consists of long-term borrowings, Series A redeemable convertible preferred shares, Series B redeemable convertible preferred shares, and shareholders’ equity. |
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Estimated initial public offering price per ordinary share | US$ | 12.00 | ||
Net tangible book value per ordinary share as of March 31, 2007 | US$ | 1.77 | ||
Increase in net tangible book value per ordinary share and per ADS attributable to this offering | US$ | 3.69 | ||
Amount of dilution in net tangible book value per ordinary share and per ADS to new investors in this offering | US$ | 8.31 |
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Ordinary shares | Average | ||||||||||||||||||||||||
purchased | Total consideration | price per | Average | ||||||||||||||||||||||
ordinary | price per | ||||||||||||||||||||||||
Number | Percent | Amount | Percent | share | ADS | ||||||||||||||||||||
(in thousands, except per share and per ADS data and percentages) | |||||||||||||||||||||||||
Existing shareholders | 100,374 | 79.1 | % | U | S$178,021 | 35.8 | % | US$ | 1.77 | US$ | 1.77 | ||||||||||||||
New investors | 26,550 | 20.9 | 318,600 | 64.2 | 12.00 | 12.00 | |||||||||||||||||||
Total | 126,924 | (1) | 100.0 | % | U | S$496,621 | 100.0 | % | US$ | 3.91 | US$ | 3.91 | |||||||||||||
(1) | Assumes automatic conversion of all of our outstanding preferred shares and mandatory convertible bonds into ordinary shares and the exercise of the outstanding Series A warrant to purchase ordinary shares as of March 31, 2007. |
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Noon buying rate | |||||||||||||||||
Period | Period end | Average(1) | High | Low | |||||||||||||
(RMB per US$1.00) | |||||||||||||||||
2002 | 8.2800 | 8.2772 | 8.2700 | 8.2800 | |||||||||||||
2003 | 8.2767 | 8.2772 | 8.2765 | 8.2800 | |||||||||||||
2004 | 8.2765 | 8.2768 | 8.2764 | 8.2774 | |||||||||||||
2005 | 8.0702 | 8.1936 | 8.0702 | 8.2765 | |||||||||||||
2006 | 7.8041 | 7.9720 | 7.8041 | 8.0702 | |||||||||||||
November | 7.8340 | 7.8622 | 7.8303 | 7.8750 | |||||||||||||
December | 7.8041 | 7.8219 | 7.8041 | 7.8350 | |||||||||||||
2007 | |||||||||||||||||
January | 7.7714 | 7.7876 | 7.7705 | 7.8127 | |||||||||||||
February | 7.7410 | 7.7502 | 7.7410 | 7.7632 | |||||||||||||
March | 7.7232 | 7.7369 | 7.7232 | 7.7454 | |||||||||||||
April | 7.7090 | 7.7247 | 7.7090 | 7.7345 | |||||||||||||
May (through May 21) | 7.6656 | 7.6893 | 7.6636 | 7.7065 |
(1) | Annual averages are calculated from month-end rates. Monthly averages are calculated using the average of the daily rates during the relevant period. Quarterly averages are calculated using the average of the monthly rates during the relevant period. |
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• | political and economic stability; | |
• | an effective judicial system; | |
• | a favorable tax system; | |
• | the absence of exchange control or currency restrictions; and | |
• | the availability of professional and support services. |
• | the Cayman Islands has a less developed body of securities laws as compared to the United States and provides significantly less protection to investors; and | |
• | Cayman Islands companies do not have standing to sue before the federal courts of the United States. |
• | recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or | |
• | entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States. |
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(1) | Mr. Liansheng Miao, our chairperson and chief executive officer, owns all of the issued and outstanding share capital of Yingli Power and is the sole director of Yingli Power. Mr. Miao is also vice chairperson and chief executive officer of Tianwei Yingli. The principal business of Yingli Power is holding of investment securities in Yingli Green Energy. Mr. Miao beneficially owns 100% equity interest in Yingli Group, which transferred its controlling equity interest in Tianwei Yingli to us. Upon completion of this offering, Mr. Miao’s family trust will own all of the issued and outstanding share capital of Yingli Power. | |
(2) | Indicates jurisdiction of incorporation. | |
(3) | Currently include (i) Inspiration Partners Limited, the holder of all of our outstanding Series A preferred shares, (ii) Baytree Investments (Mauritius) Pte Ltd., an affiliate of Temasek Holdings Pte Ltd., and 13 other investors that hold our Series B preferred shares, (iii) holders of the mandatory exchangeable notes issued by Yingli Power, our controlling shareholder, whose terms substantially mirror the mandatory convertible bonds issued by us to Yingli Power on the same date and which are mandatorily exchangeable into our ordinary shares and (iv) China Sunshine Investment Co., Ltd. and Fairdeal Development Ltd., holders of our ordinary shares. All outstanding Series A preferred shares, Series B preferred shares and mandatory exchangeable notes are automatically convertible or exchangeable into our ordinary shares upon completion of this offering. 11 of our Series B preferred investors hold warrants to purchase our ordinary shares prior to this offering, but these warrants have been rendered not exercisable under an agreement, dated May 21, 2007, among us, Yingli Power, Mr. Liansheng Miao and Baytree Investments (Mauritius) Pte Ltd., the lead Series B preferred shareholder. See “— Private Equity Investments and Other Financings Following the Restructuring” and “Principal and Selling Shareholders.” |
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(4) | The principal business of Tianwei Baobian is the manufacture of large electricity transformers. The common shares of Tianwei Baobian are listed on the Shanghai Stock Exchange. Tianwei Baobian is controlled and 51.1% owned by Baoding Tianwei Group Co., Ltd., a wholly state-owned limited liability company established in the PRC, which is in turn controlled by the State-asset Administration and Supervision Committee of the Baoding Municipal Government in Hebei Province of the PRC. | |
(5) | Indicates the percentage as of the date of this prospectus. The equity interests in Tianwei Yingli held by us and Tianwei Baobian would change to 70.11% and 29.89%, respectively, upon our completion of relevant PRC registration procedures for the additional equity contribution of US$118 million in the aggregate from portions of the proceeds from the issuance and sale of the mandatory redeemable bonds, the mandatory convertible bonds and the Series B preferred shares into the registered capital of Tianwei Yingli. See “— Private Equity Investments and Other Financings Following the Restructuring.” Upon completion of the equity contribution to Tianwei Yingli of a part of the proceeds from this offering and the related PRC approval and registration procedures, the equity interests in Tianwei Yingli held by Yingli Green Energy and Tianwei Baobian would change to 73.6% and 26.4%, respectively. | |
(6) | The principal business of Tianwei Yingli is the design, manufacture and sale of PV modules and the design, assembly, sale and installation of PV systems. See “Business — Overview.” | |
(7) | The principal business of Chengdu Yingli is sale and installation of PV systems. The remaining 36% equity interest of Chengdu Yingli is owned by Shiqian Chen, Xiao Wei, Jiafu Yu and Shiguang Du, each owning 9%. We established Chengdu Yingli with these four individuals to ensure their cooperation in providing their expertise in installing PV systems in high-altitude areas of Sichuan Province. Mr. Chen is a director of Chengdu Yingli, and Messrs. Wei, Yu and Du are its executive officers. None of these individuals is otherwise affiliated with us. | |
(8) | The principal business of Tibetan Yingli is assembly of PV modules and sale and installation of PV systems. The remaining 50% equity interest of Tibetan Yingli is owned, as to 30%, by Weiping Yu, vice chairperson of Tibetan Yingli and, as to the other 20%, by Tibetan Energy Demonstration Center, an entity wholly owned by the Tibetan Bureau of Technology, a Tibetan government agency. Tibetan Yingli was initially established as a joint venture enterprise with the Tibetan Bureau of Technology, through the Tibetan Energy Demonstration Center, in order to comply with a mandate of the Tibetan government to foster regulated competition in its solar energy industry. Neither Mr. Yu nor Tibetan Energy Demonstration Center is otherwise affiliated with us. | |
(9) | Since its establishment in January 2006, Baoding Yingli has not engaged in any business and we are in the process of dissolving it. The remaining 49% equity interest of Baoding Yingli is owned by Northeast Trading Co., Ltd. (Japan), which is not our affiliate. |
(10) | The principal business of Tibet Keguang is assembly of PV modules. The remaining 1% equity interest of Tibet Keguang is owned by Huasheng Deng, who is not our affiliate. |
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• | On June 7, 2006, Yingli Power was established in the British Virgin Islands by its sole shareholder, Mr. Liansheng Miao; | |
• | On August 7, 2006, in connection with the incorporation of Yingli Green Energy, Yingli Power subscribed for 50 million of our ordinary shares at par value of US$0.01 per share and became our sole shareholder. On September 25, 2006, Yingli Power subscribed for an additional 9.8 million of our ordinary shares for a consideration of US$100,000; | |
• | On August 9, 2006, Yingli Group and Tianwei Baobian made additional equity contributions to Tianwei Yingli, as a result of which, (i) the registered capital of Tianwei Yingli was increased from RMB 75 million to RMB 100 million; (ii) Yingli Group increased its equity interest in Tianwei Yingli from 49% to 51%; and (iii) the equity interest of Tianwei Baobian in Tianwei Yingli was correspondingly decreased from 51% to 49%; | |
• | On August 25, 2006, we entered into a Sino-foreign equity joint venture company contract with Tianwei Baobian under which we granted to Tianwei Baobian a right to subscribe for newly issued ordinary shares of us in exchange for all but not part of Tianwei Baobian’s equity interest in Tianwei Yingli. Tianwei Baobian may exercise this subscription right only after certain conditions (as described below) are satisfied following the completion of this offering; and | |
• | On September 5, 2006, Yingli Group transferred all of its 51% equity interest in Tianwei Yingli to us in a transaction between entities under common control for cash consideration of approximately RMB 134.6 million (US$17 million as translated at the applicable rate at the historical transaction date). As a result of such transfer, Tianwei Yingli became our subsidiary. For financial statements reporting purposes, Tianwei Yingli is deemed to be our predecessor. |
• | On September 28, 2006, we issued to Inspiration Partners Limited 8,081,081 Series A preferred shares for an aggregate purchase price of approximately US$17.0 million. On the same date, we also issued to TB Management Ltd., an affiliate of Inspiration Partners Limited, a warrant to purchase 678,811 of our ordinary shares at an exercise price of US$2.10 per share, which has since been transferred to its affiliate, Fairdeal Development Ltd., and which was exercised on May 23, 2007. All outstanding Series A preferred shares held by Inspiration Partners Limited are automatically convertible into our ordinary shares upon the completion of this offering at a conversion ratio of one-to-one, subject to certain anti-dilution provisions. The proceeds from the issuance and sale of the Series A preferred shares were used to finance the transfer to us of the 51% equity interest in Tianwei Yingli held by Yingli Group. | |
• | On November 13, 2006, we issued interest-bearing mandatory redeemable bonds and mandatory convertible bonds to Yingli Power in the aggregate principal amount of US$85 million and at an issue price equal to 98.75% of such aggregate principal amount. The mandatory redeemable bonds in the principal amount of US$38 million are required to be redeemed at their principal amount upon the completion of this offering. The mandatory convertible bonds with the principal amount of US$47 million are automatically convertible into our equity interest at an aggregate value equal to the value of a 3.73% effective equity interest in Tianwei Yingli at the time of the conversion. The net proceeds from these bonds are required to be used (i) up to US$62 million, to increase our equity interest in Tianwei Yingli from 53.98% to 62.13% (which event occurred on December 18, 2006), (ii) up to US$17 million, to further increase our equity interest in Tianwei Yingli, (iii) US$4.5 million to be held in a restricted account to be used to service the first three interest payments falling due under these bonds and (iv) the remaining proceeds for general corporate purpose and working capital. |
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Both of these bonds carry a floating interest rate tied to the British Bankers Association Interest Settlement Date plus 2.00% (up to and including August 16, 2007) or 4.00% (after August 16, 2007). Interest is payable quarterly. Under the indenture governing these bonds, we are subject to a number of covenants, such as the maintenance of certain financial ratios, restrictions on granting collateral, disposals of existing assets, the making of payments to shareholders and affiliates and the making of investments. We have also pledged 62.13% equity interest in Tianwei Yingli representing our existing equity interest in Tianwei Yingli, and our other tangible and intangible assets as collateral for our obligations under these bonds. |
In connection with the issuance of these bonds, on November 13, 2006, our controlling shareholder, Yingli Power, issued to Deutsche Bank AG, Singapore Branch, floating rate notes in the aggregate principal amount of US$85 million and at an issue price equal to 98.75% of such aggregate principal amount. The floating rate notes consist of US$55 million mandatory redeemable notes and US$30 million mandatory exchangeable notes exchangeable into equity interests in us at an aggregate value substantially equal to the value of a 3.73% equity interest in Tianwei Yingli at the time of the conversion, the terms of which (other than the allocation of the principal amounts between the redeemable and convertible or exchangeable portions) are substantially similar to the terms of the mandatory redeemable bonds and the mandatory convertible bonds issued by us to Yingli Power. Yingli Power used the proceeds from the issuance of the floating rate notes to subscribe for the mandatory redeemable bonds and the mandatory convertible bonds issued by us. Yingli Power pledged to Deutsche Bank AG, Singapore Branch all of its then existing equity interest in us and its other tangible and intangible asset as collateral for its obligations under these floating rate notes. | |
The following chart depicts the schematics of the mandatory redeemable and convertible bonds issued by Yingli Green Energy to Yingli Power and the mandatory redeemable and exchangeable notes issued by Yingli Power to Deutsche Bank AG. |
These offerings were structured as a two-step transaction for a number of legal considerations and commercial arrangements between the relevant parties. The following provides further background. | |
In order to facilitate the offshore listing of the business of Tianwei Yingli, Mr. Miao incorporated Yingli Green Energy in August 2006. The subsequent step was to transfer the equity interest in Tianwei Yingli held by Yingli Group, which is controlled by Mr. Miao, to Yingli Green Energy. However, under relevant PRC regulations, any cross-border transfer of equity interest ownership has to be paid in cash unless otherwise approved by several PRC governmental authorities, including the |
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PRC Ministry of Commerce and SAFE. Obtaining such approval is a lengthy, cumbersome and unpredictable process. Yingli Group, a PRC entity, could not make a non-cash contribution to Yingli Green Energy, an offshore entity, of Yingli Group’s equity interest in Tianwei Yingli without going through such cumbersome approval process. Therefore, in order to secure cash funding required for the transfer of Yingli Group’s equity interest in Tianwei Yingli, Yingli Green Energy engaged in a Series A preferred equity financing, the proceeds from which was US$17 million and was used for the foregoing purpose. | |
However, while the Series A investor agreed to such use of proceeds as documented in the definitive agreements for the Series A preferred equity financing, the Series A investor reached an informal understanding with Mr. Miao that Yingli Green Energy would seek a third-party financing, the proceeds from which would be used to increase Yingli Green Energy’s equity interest in Tianwei Yingli by way of capital contribution. Such understanding was one of the reasons for the issuance of the notes by Yingli Power to Deutsche Bank AG. The key difference between the mandatory redeemable and convertible bonds issued by Yingli Green Energy to Yingli Power and the mandatory redeemable and exchangeable notes issued by Yingli Power to Deutsche Bank AG is the respective amounts of the two tranches. Specifically, the bonds issued to Yingli Power consist of a redeemable tranche in the principal amount of US$38 million and a convertible tranche in the principal amount of US$47 million, whereas the notes issued to Deutsche Bank AG consist of a redeemable tranche in the principal amount of US$55 million and an exchangeable tranche in the principal amount of US$30 million, which resulted in a difference of US$17 million in principal amount between the US$47 million convertible tranche of the bonds issued to Yingli Power and the US$30 million exchangeable tranche of the notes issued to Deutsche Bank AG. However, notwithstanding the difference in the underlying principal amounts, the convertible tranche of the bonds issued to Yingli Power and the exchangeable tranche of the notes issued to Deutsche Bank AG are convertible or exchangeable into the same number of Yingli Green Energy’s ordinary shares, namely, an amount that would be equivalent to a 3.73% effective equity interest in Tianwei Yingli at the time of the conversion or exchange. Accordingly, the transaction was structured so that upon the mandatory redemption and conversion of the bonds issued by Yingli Green Energy to Yingli Power, and the mandatory redemption and exchange of the notes issued by Yingli Power to Deutsche Bank AG, Yingli Power would contribute US$17 million to Yingli Green Energy using its own funds. Yingli Power was not paid any additional consideration for the above transaction, except for the indirect benefit from Yingli Green Energy’s increasing its equity ownership in Tianwei Yingli as a result of the Series A preferred equity financing. We have been advised by Fangda Partners, our PRC counsel, that the transaction structure discussed above does not violate applicable PRC laws and regulations. |
• | On October 10, 2006, we amended the joint venture contract with Tianwei Baobian to make an equity contribution of US$17 million to Tianwei Yingli. The equity contribution was consummated on November 20, 2006, which increased our equity interest in Tianwei Yingli to 53.98% from 51%. This equity contribution was funded with advance payments in an aggregate amount of US$17 million from three of our Series B preferred shareholders described below. | |
• | On November 13, 2006, we further amended the joint venture contract with Tianwei Baobian to make an additional equity contribution of US$62 million to Tianwei Yingli. The equity contribution was consummated on December 18, 2006 and was funded with proceeds from the issuance of the mandatory convertible bonds and the mandatory redeemable bonds. This equity contribution increased our equity interest in Tianwei Yingli to 62.13% from 53.98%. | |
• | During the period from December 20, 2006 through January 13, 2007, we issued to Baytree Investments (Mauritius) Pte Ltd., or Baytree Investments, an affiliate of Temasek Holdings Pte Ltd., and 13 other investors, including J.P. Morgan Securities Ltd., a total of 24,405,377 Series B preferred shares for an aggregate purchase price of US$118 million, or at US$4.835 per share. In addition, during this period, we granted to such investors, other than the three investors who had made advance payments, warrants to purchase 2,112,057 of our ordinary shares at an exercise price of US$0.01 per |
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share, subject to certain anti-dilution provisions. All outstanding Series B preferred shares are automatically convertible into our ordinary shares upon the completion of this offering at a conversion ratio of one-to-one, subject to certain anti-dilution provisions. These warrants were cancellable upon the conversion of the shareholder loan as described below. Of US$118 million in aggregate proceeds, US$17 million, which was received as advance payments, was used to increase our equity interest in Tianwei Yingli to 53.98% from 51%, US$22.6 million (together with US$17 million from portions of the proceeds from the issuance and sale of the mandatory redeemable bonds and the mandatory convertible bonds) will be injected into Tianwei Yingli in the form of a direct equity contribution and the remaining US$78.4 million was injected into Tianwei Yingli in the form of a shareholder loan from us to Tianwei Yingli which will be converted into equity interest in Tianwei Yingli. On or about March 27, 2007, we issued to the Series B preferred shareholders (other than the three investors who had made advance payments) additional warrants with terms similar to the previously issued Series B warrants to purchase an aggregate of 688,090 of our ordinary shares in exchange for the early termination of an escrow arrangement with certain restriction, which made the release of a portion of the proceeds, in an amount of US$19.6 million, that were received from the issuance and sale of the Series B preferred shares contingent upon our obtaining the relevant PRC regulatory approvals and completion of related procedural formalities in connection with the conversion of the shareholder loan into equity interest in Tianwei Yingli. This amount of US$19.6 million was injected into Tianwei Yingli upon removal of such restriction in the form of entrusted loan from us to satisfy Tianwei Yingli’s working capital requirement. Under an agreement dated May 21, 2007, among us, Yingli Power, Mr. Liansheng Miao and Baytree Investments, the lead Series B preferred shareholder, the Series B warrants were rendered not exercisable in light of the substantial progress in the relevant PRC regulatory approval process related to the conversion of the shareholder loan. | ||
• | On December 18, 2006, we further amended the joint venture contract with Tianwei Baobian for us to make an additional equity contribution of US$118 million to Tianwei Yingli, and we have obtained approvals from the National Development and Reform Commission and the PRC Ministry of Commerce, and are in the process of obtaining approval from, and making registrations with the State Administration of Foreign Exchange, Baoding Branch and the Hebei Provincial Administration for Industry and Commerce. As the approvals and registrations are largely procedural in nature, we do not anticipate having difficulties in obtaining or making them. Upon obtaining the relevant PRC regulatory approvals and making related filings and registrations for the additional equity contribution by us of the US$118 million, our equity interest in Tianwei Yingli would increase to 70.11% from 62.13%. All outstanding warrants issued in connection with the Series B preferred shares are exercisable into our ordinary shares after April 30, 2007 or such later date, as selected by Baytree Investments, but upon or prior to the earlier of the completion of this offering and the conversion of the shareholder loan into equity interest in Tainwei Yingli. Upon conversion of the shareholder loan, whether prior or subsequent to our initial public offering, any unexercised warrants will be automatically cancelled, and the holders of the ordinary shares into which any warrants have been exercised are obligated to return such shares to us for cancellation or pay us an amount to be mutually determined between us and such shareholder. | |
• | In connection with a convertible loan to Tianwei Yingli from China Foreign Economic and Trade & Investment Co., Ltd., or FOTIC, a trust and investment company established in China, FOTIC acted as a nominee for certain third-party individuals. This convertible loan was made on May 17, 2006. Under a repayment and termination agreement dated December 29, 2006 among Tianwei Yingli, FOTIC, China Sunshine Investment Co., Ltd., or China Sunshine, a British Virgin Islands investment holding company, and us, Tianwei Yingli repaid the convertible loan in the principal amount of RMB 85,635,000 (US$11,088,021) plus accrued interest of RMB 4,281,750 (US$554,401) on December 29, 2006. As a condition of repayment, under the repayment and termination agreement, we issued on December 29, 2006 to China Sunshine a warrant to purchase 2,068,252 of our ordinary shares at an exercise price of US$4.835 per share. On February 2, 2007, China Sunshine fully exercised this warrant at an exercise price per share of US$4.835 and purchased 2,068,252 of our ordinary shares. |
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The issuance of the warrant was a condition of repayment of the referenced convertible loan due to a number of legal considerations and business arrangements between relevant parties. The parties to the convertible loan understood that at the time the convertible loan was made, the lenders’ intention was to exercise the conversion right under the convertible loan for an equity interest in an offshore listing vehicle for Tianwei Yingli to be listed on an overseas stock exchange. However, after the convertible loan was made, the parties to the loan agreement became aware of certain PRC legal and regulatory considerations which cast some uncertainties into the enforceability and legality under PRC laws of the conversion of the loan, which is RMB-denominated. Specifically, the original transaction contemplated the exercise by certain third party individuals or a PRC entity, namely FOTIC, as the nominee for the third party individuals, of a conversion right under a loan agreement with another PRC entity, namely Tianwei Yingli, for an equity interest in an offshore entity that is the controlling shareholder, namely Yingli Green Energy, of the second PRC entity, namely Tianwei Yingli, which was a relatively novel arrangement in the PRC for which the parties could not find sufficient precedents or clear legal authority to establish the legality of such arrangement. Accordingly, in order to reduce the potential legal and/or regulatory uncertainties, Yingli Green Energy agreed to repay the debt and also agreed to the lenders’ designation of China Sunshine Investment Co., Ltd., an entity incorporated in the British Virgin Islands and unrelated to the lenders, as the holder of the conversion right, which in the final arrangement took the form of a warrant. | |
The inclusion of the warrant as a condition to repayment of the loan also served the business interests of both Yingli Green Energy and the lenders. The arrangements that the parties agreed upon were that (i) Yingli Green Energy would repay the loan in full, including the accrued interest, (ii) Yingli Green Energy would issue a warrant to the lenders’ designated entity, China Sunshine Investment Co., Ltd., and such warrant would be exercisable into Yingli Green Energy’s equity interest that would be substantially equal to the principal amount of the loan, and (iii) to the extent China Sunshine exercises the warrant, the majority of the proceeds from the repayment would effectively be returned to Yingli Green Energy in the form of the exercise price paid by China Sunshine (which was US$4.835 per share, or the share price paid by the investors in Yingli Green Energy’s Series B preferred shares), and (iv) China Sunshine would have a reasonably short period of time (which was fixed at 45 days under the repayment agreement) to exercise the warrant. The repayment agreement dated December 29, 2006 reflected the foregoing arrangements. The above arrangement helped eliminate a potential liquidity risk associated with an immediate loan repayment for Yingli Green Energy while allowing the lenders to designate its conversion right to China Sunshine. |
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Consideration | ||||||
paid per share | ||||||
on a relative fair | ||||||
Type of security | Securityholder | value basis | ||||
Series A preferred shares, issued on September 29, 2006, exercisable into 8,081,081 ordinary shares, subject to certain anti-dilution provisions | Inspiration Partners Limited, our Series A preferred shareholder | US$2.10(1) | ||||
Mandatory convertible bonds, issued on November 13, 2006 | Yingli Power, our controlling shareholder | Note 2 | ||||
Warrant, dated November 13, 2006, exercisable into 6.5% of our ordinary shares in the aggregate on a fully diluted basis(3) | Deutsche Bank AG | nil(4) | ||||
Series B preferred shares, issued during the period from December 20, 2006 through January 13, 2007, exercisable into 24,405,377 ordinary shares, subject to certain anti-dilution provisions | Series B preferred shareholders | US$4.835(5) | ||||
Warrants, issued during the period from December 20, 2006 through January 13, 2007, exercisable into 2,112,057 ordinary shares in the aggregate, subject to certain anti-dilution provisions | Series B preferred shareholders that did not provide advance payments to us | nil(6) | ||||
Warrants, issued on or about March 27, 2007, exercisable into 688,090 ordinary shares in the aggregate, subject to certain anti-dilution provisions | Series B preferred shareholders that did not provide advance payments to us | nil(7) |
(1) | Represents the consideration paid by Inspiration Partners Limited under the share purchase agreement for issuance and sale of the Series A preferred shares. US$0.31 per share of this consideration was allocated on a relative fair value basis to the warrant issued to TB Management Ltd., an affiliate of Inspiration Partners Limited, based on the valuation of such warrant performed by American Appraisal China Limited, or American Appraisal, an independent valuation firm, as set forth in its valuation report, dated March 30, 2007, for the valuation of the Series A warrant as of September 28, 2006. |
(2) | The consideration paid per share is estimated to be US$8.55, assuming our equity interest in Tianwei Yingli is 70.11% and the total number of ordinary shares outstanding, on fully diluted basis, is 97,833,668 immediately prior to such conversion. Under the indenture under which the mandatory convertible bonds were issued, the number of our ordinary shares into which the mandatory convertible bonds are convertible is determined as a percentage of our ordinary shares which represents our effective ownership of a 3.73% equity interest in Tianwei Yingli at the time of the conversion. As Deutsche Bank AG paid US$30 million for the principal amount of the mandatory exchangeable notes issued by Yingli Power and Yingli Power paid US$47 million for the principal amount of the mandatory convertible bonds issued by us while the number of our ordinary shares to be issued upon the conversion is the same for the mandatory exchangeable notes and the mandatory convertible bonds, the consideration per share paid by Deutsche Bank AG to Yingli Power for the mandatory exchangeable notes is significantly less than the consideration per share paid by Yingli Power to us for the mandatory convertible bonds. The consideration paid by Deutsche Bank AG to Yingli Power for the principal amount of the mandatory exchangeable notes is subject to certain adjustments relating to the offering price of our ordinary shares in the event of our initial public offering. |
(3) | The warrant was issued by Yingli Power to Deutsche Bank AG in connection with the issuance of the floating rate notes issued by Yingli Power to Deutsche Bank AG. The floating rate notes consist of mandatory redeemable notes and mandatory exchangeable notes, whose respective terms substantially mirror the mandatory redeemable bonds and the mandatory convertible bonds issued by us to Yingli Power on the same date as the floating rate notes. This warrant is exercisable into our existing shares held by Yingli Power. The warrant may be exercised upon the listing of our ordinary shares on the New York Stock Exchange (or other internationally recognized stock exchange) which occurs after the mandatory redeemable notes and the mandatory convertible notes have been repaid in full (the scheduled final maturity dates of both notes being November 16, 2008). |
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(4) | Represents the consideration paid by Deutsche Bank AG under the instrument governing this warrant. The exercise price of this warrant is the lower of (i) 25 times Tianwei Yingli’s net income for the year ended December 31, 2006, multiplied by our ownership percentage in Tianwei Yingli and divided by the total number of our outstanding ordinary shares on a fully diluted basis and (ii) 67.5% of the offering price of our ordinary shares in a public offering of our ordinary shares and listing of such shares on the New York Stock Exchange or any other internationally recognized stock exchange. |
(5) | Represents the consideration paid by the Series B preferred shareholders under the share purchase agreement for issuance and sale of the Series B preferred shares. US$0.42 per share of this consideration was allocated on a relative fair value basis to the warrants issued in connection with the Series B preferred shares, based on the valuation of such warrants as of December 20, 2006 performed by American Appraisal, as set forth in its valuation report for the Series B warrants, dated March 30, 2007. |
(6) | Represents the consideration paid by the Series B preferred shareholders under the respective instruments governing these warrants. US$0.42 per share of the consideration paid by the Series B preferred shareholders under the share purchase agreement for issuance and sale of the Series B preferred shares was allocated to these warrants on a relative fair value basis. The exercise price of these warrants is US$0.01 per share, which is the par value per share of our ordinary and preferred shares. Under an agreement dated May 21, 2007, among us, Yingli Power, Mr. Liansheng Miao and Baytree Investments (Mauritius) Pte Ltd., the lead Series B preferred shareholder, these warrants were rendered not exercisable. |
(7) | The warrants were issued in consideration of the early termination of an escrow arrangement which removed the restriction on the proceeds of US$19.6 million that were received from the issuance and sale of the Series B preferred shares that took place from December 20, 2006 through January 13, 2007. |
• | Yingli Power owned on an as-converted, fully diluted basis 59.58% of our issued and outstanding share capital immediately prior to this offering; | |
• | Inspiration Partners Limited owned on an as-converted, fully diluted basis 8.05% of our issued and outstanding share capital immediately prior to this offering; | |
• | TB Management Ltd., an affiliate of Inspiration Partners Limited, holds a warrant to purchase 678,811 of our ordinary shares on or prior to the completion of this offering, which was since transferred to Fairdeal Development Ltd., an affiliate of Inspiration Partners Limited, and which was exercised on May 23, 2007; | |
• | Deutsche Bank AG, Singapore Branch holds floating rate notes, a portion of which are exchangeable into 5.32% of our issued and outstanding share capital on an as-converted, fully diluted basis immediately prior to this offering; | |
• | Baytree Investments and 13 other holders of our Series B preferred shares own on an as-converted, fully diluted basis an aggregate of 24.31% of our issued and outstanding shares immediately prior to this offering; | |
• | Baytree Investments and 10 other holders of our Series B preferred shares hold warrants to purchase an aggregate of 2,800,147 of our ordinary shares, which, however, have been rendered not exercisable under an agreement, dated May 21, 2007, among us, Yingli Power, Mr. Liansheng Miao and Baytree Investments (Mauritius) Pte Ltd., the lead Series B preferred shareholder; | |
• | China Sunshine Investment Co., Ltd. holds 2,068,252 of our ordinary shares; | |
• | Tianwei Baobian has a right to subscribe for a percentage of our ordinary shares which is equal to the percentage of Tianwei Baobian’s equity interest in Tianwei Yingli immediately before the exercise of such right; | |
• | Tianwei Yingli became a Sino-foreign equity joint venture company established under PRC law; | |
• | We are currently the controlling equity holder of Tianwei Yingli with a 62.13% equity interest, and Tianwei Baobian currently owns the remaining 37.87% of Tianwei Yingli’s equity interest. Upon the completion of relevant PRC registration procedures for the additional equity contribution of US$118 million, we and Tianwei Baobian would own 70.11% and 29.89% of Tianwei Yingli’s equity interest, respectively; and | |
• | Our principal asset is our equity interest in Tianwei Yingli. |
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Tianwei Yingli’s Management Structure |
Board of Directors |
• | amendment to the articles of association of Tianwei Yingli; | |
• | merger of Tianwei Yingli with another entity; | |
• | division of Tianwei Yingli; | |
• | termination or dissolution of Tianwei Yingli; and | |
• | increase, reduction or transfer of the registered capital of Tianwei Yingli. |
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Supervisors |
• | inspect financial affairs of Tianwei Yingli; | |
• | monitor acts of directors and senior managers in the performance of their duties to Tianwei Yingli, and propose removal of directors or senior managers who have violated any laws, regulations, the articles of association of Tianwei Yingli or any board resolutions; | |
• | demand directors and senior managers to correct any of their act that harms Tianwei Yingli’s interests; and | |
• | propose interim meetings of the board. |
Senior Management |
Subscription Right |
• | we have completed this offering; | |
• | ADSs representing our ordinary shares are listed on a qualified securities exchange, which is defined under the joint venture contract to include, among others, the NYSE; and | |
• | Tianwei Baobian obtains all necessary approvals from relevant PRC government authorities for acquiring our ordinary shares as a result of exercising the subscription right. |
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Number of new shares to be issued to Tianwei Baobian | = | Total number of our shares immediately before the exercise of the subscription right | × | Percentage of Tianwei Baobian’s equity interest in Tianwei Yingli immediately before the exercise of the subscription right |
(1) | Tianwei Baobian and we have agreed that the effective equity interest percentage in Tianwei Yingli indirectly held by Tianwei Baobian by way of its ownership of the equity interest in us following its exercise of the subscription right must be equal to the equity interest percentage in Tianwei Yingli directly held by Tianwei Baobian immediately prior to the exercise of the subscription right. |
Tianwei Yingli’s Registered Capital |
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Increase or Reduction of Tianwei Yingli’s Registered Capital |
Approval by the Board and the Relevant PRC authority |
Preemptive Right |
(1) | Fair market value means the expected value of Tianwei Yingli immediately following the contribution by the contributing party to Tianwei Yingli’s registered capital. |
Our Additional Contribution to Tianwei Yingli’s Registered Capital with Proceeds from this Offering or Private Placements |
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(1) | Fair market value means the expected value of Tianwei Yingli immediately following our contribution to Tianwei Yingli’s registered capital with proceeds from this offering or from a private placement transaction, as the case may be. After our additional contribution as described above, Tianwei Baobian’s equity interest in Tianwei Yingli will be diluted in the same proportion as our equity interest in Tianwei Yingli immediately prior to such additional contribution. |
Transfer of Equity Interests in Tianwei Yingli |
Right of First Refusal |
Approval by the Board and the Relevant PRC authority |
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No Transfer to Tianwei Yingli’s Competitors |
Encumbrance |
Profit Distribution |
Unilateral Termination of the Joint Venture Contract |
• | Tianwei Yingli or the other equity interest holder is bankrupt, enters into a liquidation or dissolution proceeding, ceases business or becomes incapable of repaying debts that are due, | |
• | an event of force majeure occurs and is continuing for over six months and the equity interest holders of Tianwei Yingli cannot find an equitable solution, or | |
• | Tianwei Yingli’s business license is terminated, cancelled or revoked. |
• | obtains its company registration by making false statement of registered capital, submitting false certificates or by concealing material facts through other fraudulent means, and the registration authority deems such activities to be a material noncompliance with applicable laws and regulations; | |
• | fails to commence operation for more than six months without proper cause, or suspends operation on its own without proper cause for more than six consecutive months after commencement of operation; | |
• | conducts illegal activities jeopardizing the national security and social public interests; | |
• | engages in relevant business activities which require special permits or approval without obtaining such permits or approval, and the registration authority deems such activities to be a material noncompliance with applicable laws and regulations; |
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• | refuses to accept the annual inspection within the time limit, or conceals facts or resorted to deception during the annual inspection, and the registration authority deems such activities to be a material noncompliance with applicable laws and regulations; or | |
• | forges, alters, leases, lends or transfers its business license, and the registration authority deems such activities to be a material noncompliance with applicable laws and regulations. |
Dispute Resolution |
Governing Law |
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Predecessor | Yingli Green Energy | ||||||||||||||||||||||||||||||||||||||||
For the three-month period | |||||||||||||||||||||||||||||||||||||||||
ended March 31, | |||||||||||||||||||||||||||||||||||||||||
For the period from | For the period from | ||||||||||||||||||||||||||||||||||||||||
For the Year ended December 31, | January 1, 2006 | August 7, 2006 through | |||||||||||||||||||||||||||||||||||||||
through | December 31, | ||||||||||||||||||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | September 4, 2006 | 2006 | 2007 | |||||||||||||||||||||||||||||||||||
US$ | (in thousands | (in thousands | (in thousands | (in thousands | |||||||||||||||||||||||||||||||||||||
(in thousands of RMB) | of RMB, | of US$, | of RMB, | of US$, | |||||||||||||||||||||||||||||||||||||
except per | except per | except per | except per | ||||||||||||||||||||||||||||||||||||||
share and | share and | share and | share and | ||||||||||||||||||||||||||||||||||||||
ADS data) | ADS data) | ADS data) | ADS data) | ||||||||||||||||||||||||||||||||||||||
Consolidated Statement of Income Data | |||||||||||||||||||||||||||||||||||||||||
Net revenues | 4,282 | 22,977 | 120,483 | 361,794 | 883,988 | 114,458 | 754,793 | 97,730 | 428,553 | 55,489 | |||||||||||||||||||||||||||||||
Gross profit | 1,376 | 6,631 | 25,180 | 108,190 | 272,352 | 35,263 | 179,946 | 23,300 | 89,610 | 11,603 | |||||||||||||||||||||||||||||||
Income (loss) from operations | (1,894 | ) | 4,324 | 13,744 | 83,675 | 234,631 | 30,378 | 132,288 | 17,129 | 40,968 | 5,305 | ||||||||||||||||||||||||||||||
Interest expense | (451 | ) | (192 | ) | (6,411 | ) | (5,278 | ) | (22,441 | ) | (2,906 | ) | (25,789 | ) | (3,339 | ) | (19,180 | ) | (2,483 | ) | |||||||||||||||||||||
Gain (loss) on debt extinguishment | — | — | — | 2,165 | — | — | (3,908 | ) | (506 | ) | — | — | |||||||||||||||||||||||||||||
Income tax benefit/(expense) | 27 | (1,441 | ) | (1,221 | ) | (12,736 | ) | (22,546 | ) | (2,919 | ) | (22,968 | ) | (2,974 | ) | 360 | 47 | ||||||||||||||||||||||||
Minority interest | 30 | 14 | 76 | 36 | 76 | 10 | (45,285 | ) | (5,864 | ) | (14,046 | ) | (1,819 | ) | |||||||||||||||||||||||||||
Net income (loss) | (2,342 | ) | 2,942 | 6,089 | 65,954 | 186,223 | 24,110 | 30,017 | 3,886 | 8,340 | 1,080 | ||||||||||||||||||||||||||||||
Net income (loss) attributable to ordinary shareholders | — | — | — | — | 23,048 | 2,984 | (22,157 | ) | (2,869 | ) | |||||||||||||||||||||||||||||||
Net income (loss) attributable per ordinary share — basic(1)(7) | 0.36 | 0.05 | (0.36 | ) | (0.05 | ) | |||||||||||||||||||||||||||||||||||
Net income (loss) attributable per ordinary share — diluted(1)(7) | 0.36 | 0.05 | (0.36 | ) | (0.05 | ) | |||||||||||||||||||||||||||||||||||
Net income (loss) attributable per ADS — basic(1)(7) | 0.36 | 0.05 | (0.36 | ) | (0.05 | ) | |||||||||||||||||||||||||||||||||||
Net income (loss) attributable per ADS — diluted(1)(7) | 0.36 | 0.05 | (0.36 | ) | (0.05 | ) | |||||||||||||||||||||||||||||||||||
Pro forma net income attributable per ordinary share — basic(2)(7) | 0.40 | 0.05 | 0.18 | 0.02 | |||||||||||||||||||||||||||||||||||||
Pro forma net income attributable per ordinary share — diluted(2)(7) | 0.40 | 0.05 | 0.17 | 0.02 | |||||||||||||||||||||||||||||||||||||
Pro forma net income attributable per ADS — basic(2)(7) | 0.40 | 0.05 | 0.18 | 0.02 | |||||||||||||||||||||||||||||||||||||
Pro forma net income attributable per ADS — diluted(2)(7) | 0.40 | 0.05 | 0.17 | 0.02 |
Predecessor | Yingli Green Energy | ||||||||||||||||||||||||||||
For the three- | |||||||||||||||||||||||||||||
For the period from | For the period from | month period | |||||||||||||||||||||||||||
January 1, 2006 | August 7, 2006 | ended | |||||||||||||||||||||||||||
For the Year Ended December 31, | through | through | March 31, | ||||||||||||||||||||||||||
September 4, | December 31, | ||||||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | 2006 | 2007 | |||||||||||||||||||||||
(in percentages) | |||||||||||||||||||||||||||||
Other Consolidated Financial Data | |||||||||||||||||||||||||||||
Gross profit margin | 32.1 | % | 28.9% | 20.9% | 29.9% | 30.8% | 23.8 | % | 20.9% | ||||||||||||||||||||
Operating profit (loss) margin | (44.2 | )% | 18.8% | 11.4% | 23.1% | 26.5% | 17.5 | % | 9.6% | ||||||||||||||||||||
Net profit (loss) margin | (54.7 | )% | 12.8% | 5.1% | 18.2% | 21.1% | 4.0 | % | 1.9% |
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Predecessor | Yingli Green Energy | ||||||||||||||||||||||||||||||||||||
As of December 31, | As of | ||||||||||||||||||||||||||||||||||||
September 4, | |||||||||||||||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | As of December 31, 2006 | As of March 31, 2007 | |||||||||||||||||||||||||||||||
(in | (in | (in | (in | ||||||||||||||||||||||||||||||||||
thousands | thousands | thousands | thousands | ||||||||||||||||||||||||||||||||||
(in thousands of RMB) | of RMB) | of US$) | of RMB) | of US$) | |||||||||||||||||||||||||||||||||
Consolidated Balance Sheet Data | |||||||||||||||||||||||||||||||||||||
Cash | 1,229 | 4,756 | 21,739 | 14,865 | 86,970 | 78,455 | 10,158 | 105,417 | 13,649 | ||||||||||||||||||||||||||||
Restricted cash | 14,243 | 3,936 | 727 | 14,870 | 8,862 | 321,780 | 41,664 | 433,043 | 56,070 | ||||||||||||||||||||||||||||
Accounts receivable, net | 4,447 | 5,783 | 6,120 | 40,505 | 54,118 | 281,921 | 36,503 | 252,670 | 32,716 | ||||||||||||||||||||||||||||
Inventories | 7,767 | 10,374 | 17,499 | 106,566 | 659,668 | 811,746 | 105,105 | 897,865 | 116,256 | ||||||||||||||||||||||||||||
Prepayments to suppliers | 1,327 | 6,452 | 12,617 | 123,452 | 349,735 | 134,823 | 17,457 | 330,292 | 42,766 | ||||||||||||||||||||||||||||
Total current assets | 30,676 | 36,138 | 62,437 | 335,372 | 1,272,347 | 1,725,885 | 223,468 | 2,113,241 | 273,622 | ||||||||||||||||||||||||||||
Amounts due from related parties(3) | 9,490 | 11,700 | 9,745 | 25,970 | 77,184 | 13,158 | 1,704 | 15,002 | 1,943 | ||||||||||||||||||||||||||||
Intangible assets, net | — | — | 375 | 285 | — | 206,938 | 26,794 | 197,368 | 25,555 | ||||||||||||||||||||||||||||
Property, plant and equipment, net | 73,097 | 107,084 | 120,980 | 341,814 | 409,310 | 583,498 | 75,551 | 755,034 | 97,762 | ||||||||||||||||||||||||||||
Long-term prepayments to suppliers | — | — | — | — | — | 226,274 | 29,298 | 227,162 | 29,413 | ||||||||||||||||||||||||||||
Total assets | 120,180 | 163,868 | 204,076 | 704,775 | 1,787,535 | 2,813,461 | 364,287 | 3,367,866 | 436,071 | ||||||||||||||||||||||||||||
Short-term borrowings(4) | 25,000 | 63,000 | 92,000 | 346,757 | 856,454 | 267,286 | 34,608 | 731,949 | 94,773 | ||||||||||||||||||||||||||||
Borrowings from related parties | 8,100 | 8,100 | 8,100 | 100,350 | 21,800 | 31,849 | 4,124 | 28,570 | 3,699 | ||||||||||||||||||||||||||||
Accounts payable | 2,101 | 16,382 | 14,514 | 32,801 | 131,690 | 123,225 | 15,955 | 162,701 | 21,067 | ||||||||||||||||||||||||||||
Advances from customers | 50 | 153 | 1,883 | 27,874 | 174,681 | 113,638 | 14,714 | 65,193 | 8,441 | ||||||||||||||||||||||||||||
Total current liabilities | 57,669 | 98,231 | 132,570 | 566,471 | 1,473,396 | 668,241 | 86,524 | 1,080,822 | 139,945 | ||||||||||||||||||||||||||||
Mandatory convertible bonds payable to Yingli Power | — | — | — | — | — | 362,530 | 46,940 | 361,726 | 46,836 | ||||||||||||||||||||||||||||
Mandatory redeemable bonds payable to Yingli Power | — | — | — | — | — | 293,110 | 37,952 | 292,460 | 37,868 | ||||||||||||||||||||||||||||
Total liabilities | 57,706 | 98,466 | 132,836 | 567,617 | 1,474,696 | 1,339,878 | 173,488 | 1,751,384 | 226,769 | ||||||||||||||||||||||||||||
Minority interest | 870 | 856 | 606 | 569 | 983 | 387,716 | 50,201 | 401,762 | 52,020 | ||||||||||||||||||||||||||||
Series A and B preferred shares | — | — | — | — | — | 1,017,337 | 131,725 | 1,066,674 | 138,113 | ||||||||||||||||||||||||||||
Retained earnings | (8,776 | ) | (5,834 | ) | (1,021 | ) | 52,212 | 190,013 | 23,048 | 2,984 | 891 | 115 | |||||||||||||||||||||||||
Total owners’ / shareholder’s equity | 61,604 | 64,546 | 70,634 | 136,589 | 311,856 | 68,530 | 8,873 | 148,046 | 19,169 |
For the three- | ||||||||||||||||
month period | ||||||||||||||||
For the Year ended | ended | |||||||||||||||
December 31, | March 31, | |||||||||||||||
2004 | 2005 | 2006 | 2007 | |||||||||||||
Consolidated operating data | ||||||||||||||||
PV modules sold (in megawatts)(5) | 4.7 | 11.9 | 51.3 | 14.6 | ||||||||||||
Average selling price of PV modules (per watt in US$)(6) | 2.83 | 3.49 | 3.82 | 3.76 |
(1) | Tianwei Yingli, our predecessor, is not a share-based company and had no outstanding shares for the periods presented, and therefore, we have not presented earnings per share for Tianwei Yingli. |
(2) | To give effect to (i) the automatic conversion of all of our outstanding preferred shares into ordinary shares upon completion of this offering and (ii) the automatic conversion of all of our outstanding mandatory convertible bonds into ordinary shares upon completion of this offering, as if the conversion had taken place at date of issuance. |
(3) | As of December 31, 2002, 2003, 2004 and 2005, September 4, 2006, December 31, 2006 and March 31, 2007, amounts due from related parties that were classified as current assets were RMB 1.0 million, RMB 3.3 million, RMB 1.3 million, RMB 26.0 million, RMB 77.2 million, RMB 13.2 million (US$1.7 million) and RMB 15.0 million (US$1.9 million), respectively. |
(4) | Includes loans guaranteed or entrusted by related parties, which amounted to RMB 10.0 million, RMB 51.0 million, RMB 80.0 million, RMB 234.0 million, RMB 784.0 million, RMB 233.0 million (US$30.2 million) and RMB 450.0 million (US$58.3 million), as of December 31, 2002, 2003, 2004 and 2005, September 4, 2006, December 31, 2006 and March 31, 2007, respectively. |
(5) | PV modules sold, for a given period, represents the total PV modules, as measured in megawatts, delivered to customers under the then effective supply contracts during such period. |
(6) | We compute average selling price of PV modules per watt for a given period as the total sales of PV modules divided by the total watts of the PV modules sold during such period, and translated into U.S. dollars at the noon buying rate at the end of such period as certified by the United States Federal Reserve Board. |
(7) | Commencing January 1, 2007, our primary operating subsidiary, Tianwei Yingli, began enjoying certain exemptions from income tax. These income tax exemptions had the effect of increasing our net income by RMB 6.8 million (US$0.9 million) and decreasing our loss attributable to ordinary shareholders on a per share basis by RMB 0.11 (US$0.01) for the three-month period ended March 31, 2007. Prior to this period, there was no tax exemption in place. |
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• | industry demand; | |
• | government subsidies and economic incentives; | |
• | capacity; | |
• | availability and price of polysilicon; | |
• | vertically integrated manufacturing capabilities; | |
• | competition and product pricing; and | |
• | manufacturing technologies. |
Industry Demand |
Government Subsidies and Economic Incentives |
Capacity |
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Availability and Price of Polysilicon |
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Vertically Integrated Manufacturing Capabilities |
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Competition and Product Pricing |
Manufacturing Technologies |
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• | Sales of PV modules, which are currently our principal source of revenues and are primarily driven by market demand as well as our production capacity; | |
• | Sales of PV systems, which consist of sales of PV systems and related installation services; | |
• | Other revenues, which consist primarily of sales of raw materials and to a lesser extent, sales from processing PV cells into PV modules for third-party vendors. Sales of raw materials consist of sales of polysilicon scraps that are originally purchased by us but are not used in our manufacturing process because they are found to be of substandard quality for our products. We currently sell such materials to third parties at a profit due to industry-wide shortage for polysilicon but we cannot assure you that we will continue to be able to do so in the future. We do not expect to enter into similar processing arrangements to a significant degree once we attain parity in production capacity for different phases of our product value chain. |
For the three-month | |||||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, | periods ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||
2004 | 2005 | 2006(1) | 2006 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | (in thousands, except percentages) | ||||||||||||||||||||||||||||||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||
Sales of PV modules | 108,784 | 90.3 | % | 334,013 | 92.3 | % | 1,530,585 | 198,180 | 93.4 | % | 200,645 | 99.8 | % | 423,339 | 54,814 | 98.8 | % | ||||||||||||||||||||||||||||||||
Sales of PV systems | 8,795 | 7.3 | 8,092 | 2.2 | 15,227 | 1,972 | 0.9 | 115 | 0.1 | 139 | 18 | — | |||||||||||||||||||||||||||||||||||||
Other revenues | 2,904 | 2.4 | 19,689 | 5.5 | 92,969 | 12,037 | 5.7 | 140 | 0.1 | 5,075 | 657 | 1.2 | |||||||||||||||||||||||||||||||||||||
Total net revenues | 120,483 | 100.0 | % | 361,794 | 100.0 | % | 1,638,781 | 212,189 | 100.0 | % | 200,900 | 100.0 | % | 428,553 | 55,489 | 100.0 | % | ||||||||||||||||||||||||||||||||
(1) | Represents the addition of the amounts for the specified line items of Tianwei Yingli, our predecessor, for the period from January 1, 2006 through September 4, 2006 and the amounts for the corresponding line items of Yingli Green Energy, for the period from August 7, 2006 (date of inception) through December 31, 2006. The presentation of such combined financial data for the year ended December 31, 2006 is not in accordance with U.S. GAAP. For the period from August 7, 2006 (date of inception) through September 4, 2006, during which the financial statements of the predecessor and those of Yingli Green Energy overlap, Yingli Green Energy did not engage in any business or operations. |
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Year ended December 31, | For the three-month periods ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||
2004 | 2005 | 2006(1) | 2006 | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||
Total | % of total | Total | % of total | % of total | Total | % of total | % of total | |||||||||||||||||||||||||||||||||||||||||||
Country | sales | revenues | sales | revenues | Total sales | revenues | sales | revenues | Total sales | revenues | ||||||||||||||||||||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||||
Europe: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Germany | 80,463 | 66.8 | % | 238,984 | 65.5 | % | 1,009,675 | 130,733 | 61.2 | % | 166,128 | 81.7 | % | 50,532 | 6,543 | 11.8 | % | |||||||||||||||||||||||||||||||||
Spain | — | 0.0 | 28,501 | 7.8 | 236,069 | 30,566 | 14.3 | 6,833 | 3.4 | 251,056 | 32,507 | 58.6 | ||||||||||||||||||||||||||||||||||||||
Others | 6,476 | 5.3 | 28,557 | 7.9 | 88,453 | 11,453 | 5.4 | 4,752 | 2.3 | 2,238 | 290 | 0.5 | ||||||||||||||||||||||||||||||||||||||
Subtotal — Europe | 86,939 | 72.1 | 296,042 | 81.2 | 1,334,197 | 172,752 | 80.9 | 177,713 | 87.4 | 303,826 | 39,340 | 70.9 | ||||||||||||||||||||||||||||||||||||||
China | 28,791 | 23.9 | 57,292 | 15.7 | 80,968 | 10,484 | 4.9 | 4,798 | 2.4 | 14,899 | 1,929 | 3.5 | ||||||||||||||||||||||||||||||||||||||
Hong Kong | — | — | — | — | 154,585 | 20,016 | 9.4 | 20,125 | 9.9 | 79,914 | 10,347 | 18.6 | ||||||||||||||||||||||||||||||||||||||
United States | — | — | 6,462 | 1.8 | 40,577 | 5,254 | 2.5 | 178 | 0.1 | 28,987 | 3,753 | 6.8 | ||||||||||||||||||||||||||||||||||||||
Other regions | 4,761 | 4.0 | 4,985 | 1.3 | 39,816 | 5,155 | 2.3 | 618 | 0.2 | 929 | 120 | 0.2 | ||||||||||||||||||||||||||||||||||||||
Total revenues | 120,491 | 100.0 | % | 364,781 | 100.0 | % | 1,650,143 | 213,661 | 100.0 | % | 203,432 | 100.0 | % | 428,555 | 55,489 | 100.0 | % | |||||||||||||||||||||||||||||||||
Sales tax and surcharge | (8 | ) | (2,987 | ) | (11,362 | ) | (1,472 | ) | (2,532 | ) | (2 | ) | — | |||||||||||||||||||||||||||||||||||||
Total net revenues | 120,483 | 361,794 | 1,638,781 | 212,189 | 200,900 | 428,553 | 55,489 | |||||||||||||||||||||||||||||||||||||||||||
(1) | Represents the addition of the amounts for the specified line items of Tianwei Yingli, our predecessor, for the period from January 1, 2006 through September 4, 2006, and the amounts of the corresponding line items of Yingli Green Energy, for the period from August 7, 2006 (date of inception) through December 31, 2006. The presentation of such combined financial data for the year ended December 31, 2006 is not in accordance with U.S. GAAP. For the period from August 7, 2006 (date of inception) through September 4, 2006, during which the financial statements of the predecessor and those of Yingli Green Energy overlap, Yingli Green Energy did not engage in any business or operations. |
Year ended December 31, | For the three-month periods ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||
2004 | 2005 | 2006(1) | 2006 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | (in thousands, except percentages) | ||||||||||||||||||||||||||||||||||||||||||||||||
Total net revenues | 120,483 | 100.0 | % | 361,794 | 100.0 | % | 1,638,781 | 212,189 | 100.0 | % | 200,900 | 100.0 | % | 428,553 | 55,489 | 100.0 | % | ||||||||||||||||||||||||||||||||
Cost of revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||
Cost of PV module sales | 86,502 | 71.8 | 233,194 | 64.5 | 1,100,372 | 142,476 | 67.1 | 153,435 | 76.3 | 330,365 | 42,775 | 77.1 | |||||||||||||||||||||||||||||||||||||
Cost of PV system sales | 6,633 | 5.5 | 6,292 | 1.7 | 10,939 | 1,416 | 0.7 | 107 | 0.1 | 98 | 13 | — | |||||||||||||||||||||||||||||||||||||
Cost of other revenues | 2,168 | 1.8 | 14,118 | 3.9 | 75,172 | 9,733 | 4.6 | 135 | 0.1 | 8,480 | 1,098 | 2.0 | |||||||||||||||||||||||||||||||||||||
Total cost of revenues | 95,303 | 79.1 | 253,604 | 70.1 | 1,186,483 | 153,625 | 72.4 | 153,677 | 76.5 | 338,943 | 43,886 | 79.1 | |||||||||||||||||||||||||||||||||||||
Gross profit | 25,180 | 20.9 | 108,190 | 29.9 | 452,298 | 58,564 | 27.6 | 47,223 | 23.5 | 89,610 | 11,603 | 20.9 | |||||||||||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||
Selling expenses | 1,027 | 0.9 | 3,546 | 1.0 | 15,459 | 2,002 | 0.9 | 5,272 | 2.6 | 17,371 | 2,249 | 4.1 | |||||||||||||||||||||||||||||||||||||
General and administrative expenses | 7,459 | 6.2 | 19,178 | 5.3 | 46,784 | 6,057 | 2.9 | 5,777 | 2.9 | 23,692 | 3,068 | 5.4 | |||||||||||||||||||||||||||||||||||||
Research and development expenses | 2,950 | 2.4 | 1,791 | 0.5 | 23,136 | 2,996 | 1.4 | 593 | 0.3 | 7,579 | 981 | 1.8 | |||||||||||||||||||||||||||||||||||||
Total operating expenses | 11,436 | 9.5 | 24,515 | 6.8 | 85,379 | 11,055 | 5.2 | 11,642 | 5.8 | 48,642 | 6,298 | 11.3 | |||||||||||||||||||||||||||||||||||||
Income from operations | 13,744 | 11.4 | % | 83,675 | 23.1 | % | 366,919 | 47,509 | 22.4 | % | 35,581 | 17.7 | % | 40,968 | 5,305 | 9.6 | % |
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(1) | Represents the addition of the amounts for the specified line items of Tianwei Yingli, our predecessor, for the period from January 1, 2006 through September 4, 2006, and the amounts for the corresponding line items of Yingli Green Energy, for the period from August 7, 2006 (date of inception) through December 31, 2006. The presentation of such combined financial data for the year ended December 31, 2006 is not in accordance with U.S. GAAP. For the period from August 7, 2006 (date of inception) through September 4, 2006, during which the financial statements of the predecessor and those of Yingli Green Energy overlap, Yingli Green Energy did not engage in any business or operations. |
Cost of Revenues |
• | Polysilicon. The cost ofhigh-purity polysilicon and polysilicon scraps is the largest component of our total cost of revenues. We purchase polysilicon from various suppliers, including silicon manufacturers and distributors. | |
• | Other raw materials. Other raw materials include crucibles, silicon carbides, cutting fluid, steel cutting wires, alkaline detergents, metallic pastes, laminate materials, silica gel, tempered glass, aluminum frames, solder, junction boxes, cables, connectors and other chemical agents and electronic components. | |
• | Toll manufacturing. We process silicon raw materials into ingots and produce wafers, PV cells and PV modules in-house. As our PV cell production capacity used to be less than the production capacities for our wafers and PV modules, we used to send a portion of excess wafers to third-party PV cell manufacturers and receive PV cells from them under toll manufacturing arrangements which are then used to produce our PV modules. As our PV cell production has reached the same level as our wafer and PV module production through the ramp-up of our production capacity, we have terminated these toll manufacturing arrangements. The cost of producing PV cells through a toll manufacturing arrangement is typically higher than the cost of producing them in-house. | |
• | Direct labor. Direct labor costs include salaries and benefits for personnel directly involved in the manufacturing activities. | |
• | Overhead. Overhead costs include utilities, maintenance of production equipment, land rental expenses and other ancillary expenses associated with the manufacturing activities. | |
• | Depreciation of property, plant and equipment. Depreciation of property, plant and equipment is provided on a straight-line basis over the estimated useful life, which is 30 years for buildings, eight to ten years for machinery and motor vehicles and four to five years for electronic equipment and furniture and fixtures, taking into account their estimated residual value. Due to our capacity expansion, depreciation in absolute terms has increased significantly. We expect this trend to continue as we continue to expand our manufacturing capacity and build new facilities to attain manufacturing capacity at 600 megawatts for each of polysilicon ingots and wafers, PV cells and PV modules by 2010. | |
• | Warranty cost. Our PV modules are typically sold with a two-year limited warranty for defects in materials and workmanship, and aten-year and25-year limited warranty against declines of more than 10.0% and 20.0%, respectively, from the initial power generation capacity at the time the product is sold. We maintain warranty reserves to cover potential liabilities that could arise under these warranties. Such warranties require us to fix or replace the defected products. We currently accrue the equivalent of 1% of net revenues as warranty reserves. We have not experienced any warranty claims since we started selling PV modules in January 2003. In 2004, 2005, 2006 and the first quarter of 2007, we recorded warranty expense of RMB 1.2 million, RMB 3.5 million, RMB 15.7 million (US$2.0 million) and RMB 4.2 million (US$0.5 million), respectively. |
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Gross Profit and Gross Margin |
Operating Expenses |
• | Selling expenses, which consist primarily of advertising costs, packaging and shipping costs, salaries and employee benefits of sales personnel, sales-related travel and entertainment expenses, amortization of intangible assets (including backlog and customer relationships) and other selling expenses including sales commissions paid to our sales agents. We expect that our selling expenses will increase in the near term as we increase sales efforts, hire additional sales personnel, target new markets and initiate additional marketing programs to build up our brand. However, we expect that the growth in net revenues will outpace the growth in selling expenses and increase the gross margin over time. | |
• | General and administrative expenses, which consist primarily of salaries and benefits for our administrative and finance personnel, bad debt expense, other travel and entertainment expenses, bank charges, amortization of technical know-how, depreciation of equipment used for administrative purposes and share-based compensation expenses. We expect the general and administrative expenses will increase in the near term as a percentage of net revenue as we hire additional personnel and incur professional expenses to support our operations as a listed company in the United States. However, we expect that general and administrative expenses will decrease as a percentage of net revenues over time as we achieve greater economies of scale. | |
• | Research and development expenses, which consist primarily of costs of raw materials used in research and development activities, salaries and employee benefits for research and development personnel, and prototype and equipment costs relating to the design, development, testing and enhancement of |
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our products and manufacturing process. We are a party to several research grant contracts with the PRC government under which we receive funds for specified costs incurred in certain research projects. We record such amounts as a reduction to research and development expenses when the related research and development costs are incurred. We expect our research and development expenses (not adjusted for offsets by government grants) to increase as we place a greater strategic focus on PV system sales in overseas markets and as we continue to hire additional research and development personnel and focus on continuous innovation of process technologies for our PV products, including improving the technical know-how to produce ingots and wafers with a higher proportion of polysilicon scraps without compromising the conversion efficiency of our PV cells and modules. We conduct our research and development, design and manufacturing operations in China, where the costs of skilled labor, engineering and technical resources, as well as land, facilities and utilities, tend to be lower than those in more developed countries. |
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Additional | ||||||||||||||||
Series A warrant | Series B warrants | Sunshine warrant | Series B warrants | |||||||||||||
Fair value of ordinary shares at issuance date | US$2.04 | US$4.74 | US$4.74 | US$11.00 | ||||||||||||
Expected warrant term | 0.59 year | 0.28 year | 0.12 year | 0.17 year | ||||||||||||
Expected volatility | 58% | 47% | 42% | 56% | ||||||||||||
Risk-free interest rate | 5.04% | 5.05% | 5.20% | 5.06% | ||||||||||||
Expected dividend rate | 0% | 0% | 0% | 0% |
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• | in November 2006, we successfully completed the issuance of mandatory redeemable bonds and mandatory convertible bonds for an aggregate principal amount of US$85 million, which were used primarily to purchase 150 tons of polysilicon in November and December 2006 and satisfy US$32.6 million of prepayment obligations payable in December 2006 under two long-term polysilicon supply contracts with Wacker Chemie AG. The execution of these contracts and other bulk purchases improved our ability to secure the requisite amount of polysilicon and supported the credibility of our output projections and our confidence to obtain necessary polysilicon supply for 2007 and onwards, which in turn helped to improve our valuation from the time of the issuance of the Series A preferred shares in September 2007 to the time of the issuance of the Series B preferred shares in December 2006; | |
• | in November 2006, we entered into a large sales contract with Acciona Energía, S.A., one of our key customers in Spain, for the delivery of an aggregate of 42 megawatts of PV modules until 2008, which helped to further strengthen our competitive position, improve the accuracy of our average selling price projections, further justify our capacity expansion plan and support our revenue projections. Such contract may not be unilaterally terminated by Acciona, except in limited circumstances, such as bankruptcy of us or a breach of the contract which remains uncured for 60 days after notice thereof; | |
• | the prices of polysilicon we were able to obtain under these long-term polysilicon supply contracts also supported our belief that the polysilicon price over the long term would fall significantly and, as a result, our gross profit margin would improve over the long term; | |
• | we were able to hire the chief financial officer, chief operating officer, chief technology officer and financial controller, who helped us to enhance our management capabilities and to execute our business plan; and | |
• | in light of the greater immediacy of our public offering and the paucity of successful initial public offerings by issuers with principal operating subsidiaries in China from September 2006 through December 2006, we adjusted down the weighted average cost of capital by 2% from September 2006 through December 2006 as the cost of equity had been reduced. |
Warranty Cost |
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Long-lived Assets |
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Share-based Compensation |
• | the estimated fair value of our ordinary shares on the grant date; | |
• | the maturity of the options; | |
• | the expected volatility of our future ordinary share price; | |
• | the risk-free interest rate, and; | |
• | the expected dividend rate. |
Weighted | ||||||||||||||||
Weighted | average | |||||||||||||||
average | remaining | |||||||||||||||
Number | exercise | contractual | Aggregate | |||||||||||||
of shares | price | term | intrinsic value | |||||||||||||
Outstanding as of August 7, 2006 (date of inception) | — | — | ||||||||||||||
Granted on December 28, 2006 | 610,929 | US$ | 2.10 | |||||||||||||
Exercised | — | — | ||||||||||||||
Forfeited or expired | — | — | ||||||||||||||
Outstanding as of December 31, 2006 | 610,929 | US$ | 2.10 | 10 years | RMB 12,604,281 | |||||||||||
Exercisable as of December 31, 2006 | — | — | — | |||||||||||||
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• | since December 26, 2006, we have entered into three sales contracts with Unitec Europa, S.A., Sinolink Development Limited and Laxtron Energías Renovables to deliver an aggregate of over 40 megawatts of PV modules in 2007, which increased our estimated sales in 2007 to be secured contractually from approximately 70 megawatts of PV modules as of December 28, 2006 to approximately 110 megawatts as of May 18, 2007. | |
• | we have been able to secure additional supply of polysilicon since December 28, 2006. In April 2007, we entered into a new supply agreement with Sichuan Xinguang Silicon Science and Technology Co., Ltd., a PRC silicon manufacturer, to satisfy a significant portion of our estimated polysilicon needs for 2007 and 2008 and further enhanced the credibility of our output projections for 2007 and 2008, as well as several other supplier contracts in 2007. As a result, we secured as of April 30, 2007 approximately 930 tons of our estimated polysilicon needs for 2007 and approximately 1,000 tons of our estimated polysilicon needs for 2008. In contrast, as of December 28, 2006, we secured approximately 380 tons of our estimated polysilicon needs for 2007 and nil tons for our estimated polysilicon needs for 2008. | |
• | in March 2007, we successfully added another 30 megawatts cell production capacity which enabled us to reach the current PV cell production capacity of 90 megawatts. This addition in PV cell production capacity enhanced the parity of production capacity at each of our entire supply chain and reduced the need to enter into toll manufacturing arrangements with third-party toll manufacturers, which are more expensive than in-house production; | |
• | during the period from January 2007 through March 2007, we obtained additional banking facilities in the amount of RMB 441.7 million (US$57.2 million), which would be sufficient for us to fund the construction for new production facilities for the silicon ingots and wafers, PV cells and PV modules for up to 100 megawatts each as well as the related power generation system until the end of June 2007. The availability of additional funding for capacity expansion increased the likelihood of achieving our output target for 2007 and 2008, as well as sales targets for 2007 and 2008, which in turn helped to improve our valuation. In addition, the production equipment has been delivered on schedule; | |
• | in April 2007, we arranged for three individuals to become our independent directors upon completion of this offering. As independent directors, these individuals will help us improve our corporate governance and internal controls. In April 2007, we also hired a vice president with extensive experience in the silicon ingots and wafers production process and an assistant financial controller with knowledge of and experience in the areas of U.S. GAAP and internal control over financial reporting; | |
• | since December 28, 2006, governments in certain of our key overseas markets announced plans to promote the use of alternative and renewable energy sources, which is likely to improve the demand prospects for PV products significantly over the long term. These plans include the Energy Action Plan adopted by the European Council in March 2007, which, among others, set a binding target for the European Union to increase the percentage of energy consumption based on renewable energy sources to 20% of overall energy consumption in the European Union and to increase the percentage |
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of biofuels used in the transport fuel consumed in the European Union to 10% of such transport fuel, in each case by 2020. In addition, the United States also announced a plan in January 2007 to seek a 20% reduction in gasoline consumption in the United States by 2017, which would likely require, among others, the use of approximately 35 billion gallons of renewable and alternative fuels. We believe the positive growth outlook for our products as a result of such government plans in turn improved our valuation; | ||
• | since December 28, 2006, the stock prices of listed PV companies in general, including the 11 companies comparable to us that we examined in connection with the valuation performed by us with the assistance of American Appraisal, improved significantly. For example, the aggregate market capitalization of the 11 companies increased by approximately 30% from January 1, 2007 through May 8, 2007, based on an average increase of average closing stock prices during the same period. We believe that the favorable movements of the stock prices of the PV companies since the beginning of 2007 are due to, among others, the government plans to expand the use of renewable energy sources as described above, news reports in April 2007 that the global solar grade silicon supply is expected to increase significantly starting in 2008 (which exceeded the typical industry estimates made in 2006), and continued technological advancements for producing cheaper PV modules on a per-watt basis, which in the aggregate would contribute to the growth in revenue and profits for PV product manufacturers. We also believe that the investor sentiment with respect to the PV company stocks were positively affected by the improvements in revenues and profits for several listed PV companies, such as Suntech Power Holdings and Solarworld AG. We believe that the strong stock price performance of the PV product manufacturers in general, including the 11 comparable companies we examined for purposes of valuation and several newly listed PV product manufacturers with operations primarily in China, further justify adjusting upwards the fair value of our ordinary shares; and | |
• | In determining the midpoint of the estimated initial public offering price range of US$12.00 per share, we utilized the market approach, as compared to a weighted average of the income approach and market approach, which we used in determining the fair value of US$4.74 per share at December 28, 2006. We believe that applying the market approach best reflects our anticipated pricing for this offering. The most significant factors that led to an increase in the fair value of our ordinary shares from US$4.74 as of December 28, 2006 to US$12.00, the midpoint of the estimated initial public offering price range under the market approach were: (i) the utilization of our estimated 2008 EBIT for purposes of calculating the midpoint of the estimated price range for this offering versus the utilization of 2007 EBIT for purposes of determining the fair value of US$4.74 per ordinary share as of December 28, 2006 and (ii) in light of the market factors described above, an increase by 82% in the multiple applied to such EBIT from December 28, 2006 for purposes of calculating the fair value of our ordinary shares to the date of this prospectus for purposes of calculating the midpoint of estimated price range for this offering. |
Valuation of Inventories |
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Allowance for Doubtful Accounts |
Predecessor | Yingli Green | ||||||||||||||||
Energy | |||||||||||||||||
For the | |||||||||||||||||
period from | For the | ||||||||||||||||
For the year | January 1, | period from | |||||||||||||||
ended | 2006 | August 7, | |||||||||||||||
December 31, | through | 2006 through | |||||||||||||||
September 4, | December 31, | ||||||||||||||||
2004 | 2005 | 2006 | 2006 | ||||||||||||||
(in thousands of RMB) | |||||||||||||||||
Balance at the beginning of the period | — | (293 | ) | (1,776 | ) | — | |||||||||||
Transfer of Tianwei Yingli to Yingli Green Energy | — | — | — | (2,309 | ) | ||||||||||||
Additions charged to bad debt expense | (293 | ) | (1,483 | ) | (533 | ) | — | ||||||||||
Write-off of accounts receivable charged against the allowance | — | — | — | — | |||||||||||||
Balance at the end of the period | (293 | ) | (1,776 | ) | (2,309 | ) | (2,309 | ) | |||||||||
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Yingli Green | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Energy | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Combined) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Predecessor | Yingli Green Energy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the period | from | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, | from January 1, | August 7, 2006 | For the year | For the three-month periods ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2006 | through | ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
through | December 31, | December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2004 | 2005 | September 4, 2006 | 2006 | 2006 | 2006 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales of PV modules | 108,784 | 90.3 | % | 334,013 | 92.3 | % | 856,499 | 96.9 | % | 674,086 | 89.3 | % | 1,530,585 | 198,180 | 93.4 | % | 200,645 | 99.8% | 423,339 | 54,814 | 98.8 | % | |||||||||||||||||||||||||||||||||||||||||||
Sales of PV systems | 8,795 | 7.3 | 8,092 | 2.2 | 905 | 0.1 | 14,322 | 1.9 | 15,227 | 1,972 | 0.9 | 115 | 0.1% | 139 | 18 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Others revenues | 2,904 | 2.4 | 19,689 | 5.5 | 26,584 | 3.0 | 66,385 | 8.8 | 92,969 | 12,037 | 5.7 | 140 | 0.1% | 5,075 | 657 | 1.2 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total net revenues | 120,483 | 100.0 | % | 361,794 | 100.0 | % | 883,988 | 100.0 | % | 754,793 | 100.0 | % | 1,638,781 | 212,189 | 100.0 | % | 200,900 | 100.0% | 428,553 | 55,489 | 100.0 | % | |||||||||||||||||||||||||||||||||||||||||||
Cost of revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of PV modules sales | 86,502 | 71.8 | % | 233,194 | 64.5 | % | 586,196 | 66.3 | % | 514,176 | 68.1 | % | 1,100,372 | 142,476 | 67.1 | % | 153,435 | 76.3% | 330,365 | 42,775 | 77.1 | % | |||||||||||||||||||||||||||||||||||||||||||
Cost of PV systems sales | 6,633 | 5.5 | 6,292 | 1.7 | 1,012 | 0.1 | 9,927 | 1.3 | 10,939 | 1,416 | 0.7 | 107 | 0.1 | 98 | 13 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Cost of other revenues | 2,168 | 1.8 | 14,118 | 3.9 | 24,428 | 2.8 | 50,744 | 6.8 | 75,172 | 9,733 | 4.6 | 135 | 0.1 | 8,480 | 1,098 | 2.0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total cost of revenues | 95,303 | 79.1 | % | 253,604 | 70.1 | % | 611,636 | 69.2 | % | 574,847 | 76.2 | % | 1,186,483 | 153,625 | 72.4 | % | 153,677 | 76.5% | 338,943 | 43,886 | 79.1 | % | |||||||||||||||||||||||||||||||||||||||||||
Gross profit | 25,180 | 20.9 | % | 108,190 | 29.9 | % | 272,352 | 30.8 | % | 179,946 | 23.8 | % | 452,298 | 58,564 | 27.6 | % | 47,223 | 23.5% | 89,610 | 11,603 | 20.9 | % | |||||||||||||||||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selling expenses | 1,027 | 0.9 | % | 3,546 | 1.0 | % | 9,590 | 1.1 | % | 5,869 | 0.8 | % | 15,459 | 2,002 | 0.9 | % | 5,272 | 2.6% | 17,371 | 2,249 | 4.1 | % | |||||||||||||||||||||||||||||||||||||||||||
General and administrative expenses | 7,459 | 6.2 | 19,178 | 5.3 | 24,466 | 2.8 | 22,318 | 2.9 | 46,784 | 6,057 | 2.9 | 5,777 | 2.9 | 23,692 | 3,068 | 5.4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Research and development expenses | 2,950 | 2.4 | 1,791 | 0.5 | 3,665 | 0.4 | 19,471 | 2.6 | 23,136 | 2,996 | 1.4 | 593 | 0.3 | 7,579 | 981 | 1.8 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total operating expenses | 11,436 | 9.5 | % | 24,515 | 6.8 | % | 37,721 | 4.3 | % | 47,658 | 6.3 | % | 85,379 | 11,055 | 5.2 | % | 11,642 | 5.8% | 48,642 | 6,298 | 11.3 | % | |||||||||||||||||||||||||||||||||||||||||||
Income from operations | 13,744 | 11.4 | % | 83,675 | 23.1 | % | 234,631 | 26.5 | % | 132,288 | 17.5 | % | 366,919 | 47,509 | 22.4 | % | 35,581 | 17.7% | 40,968 | 5,305 | 9.6 | % | |||||||||||||||||||||||||||||||||||||||||||
Equity in loss of an affiliate | (185 | ) | (0.2 | ) | (371 | ) | (0.1 | ) | (609 | ) | (0.1 | ) | (216 | ) | — | (825 | ) | (107 | ) | (0.1 | ) | (194 | ) | (0.1 | ) | (138 | ) | (18 | ) | — | |||||||||||||||||||||||||||||||||||
Interest expense, net | (6,324 | ) | (5.2 | ) | (5,003 | ) | (1.4 | ) | (21,923 | ) | (2.4 | ) | (25,201 | ) | (3.3 | ) | (47,124 | ) | (6,102 | ) | (2.8 | ) | (4,795 | ) | (2.4 | ) | (18,873 | ) | (2,444 | ) | (4.5 | ) | |||||||||||||||||||||||||||||||||
Other income and foreign currency exchange loss | (1 | ) | — | (1,812 | ) | (0.5 | ) | (3,406 | ) | (0.3 | ) | (4,693 | ) | (0.6 | ) | (8,099 | ) | (1,049 | ) | (0.5 | ) | (265 | ) | (0.1 | ) | 69 | 9 | — | |||||||||||||||||||||||||||||||||||||
Gain (loss) on debt extinguishment | — | — | 2,165 | 0.6 | — | — | (3,908 | ) | (0.6 | ) | (3,908 | ) | (506 | ) | (0.2 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Income tax (expense) benefit | (1,221 | ) | (1.0 | ) | (12,736 | ) | (3.5 | ) | (22,546 | ) | (2.6 | ) | (22,968 | ) | (3.0 | ) | (45,514 | ) | (5,893 | ) | (2.8 | ) | (5,375 | ) | (2.7 | ) | 360 | 47 | 0.1 | ||||||||||||||||||||||||||||||||||||
Income before minority interest | 6,013 | 5.0 | 65,918 | 18.2 | 186,147 | 21.1 | 75,302 | 10.0 | 261,449 | 33,852 | 16.0 | % | 24,952 | 12.4 | 22,386 | 2,899 | 5.2 | ||||||||||||||||||||||||||||||||||||||||||||||||
Minority interest | 76 | 0.1 | 36 | — | 76 | — | (45,285 | ) | (6.0 | ) | (1) | (1) | 28 | — | (14,046 | ) | (1,819 | ) | (3.3 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Net income | 6,089 | 5.1 | % | 65,954 | 18.2 | % | 186,223 | 21.1 | % | 30,017 | 4.0 | % | (1) | (1) | 24,980 | 12.4% | 8,340 | 1,080 | 1.9 | % |
(1) | This line item for the combined period is not presented because it is not comparable to the line item that would have been for such period if Yingli Group had transferred its 51% equity interest in Tianwei Yingli to us on January 1, 2006 because the minority interest for the period from August 7, 2006 through December 31, 2006, which reflects the ownership of Tianwei Yingli not held by us, is not comparable or relevant to the results of operations of our predecessor. |
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Three months ended March 31, 2006 for our predecessor compared with three months ended March 31, 2007 for Yingli Green Energy |
• | Selling Expenses. Our selling expenses was RMB 17.4 million (US$2.2 million) in the first quarter of 2007, which significantly increased from our predecessor’s selling expenses of RMB 5.3 million in the first quarter of 2006, primarily as a result of a significant increase in marketing activities for our PV modules, an RMB 7.6 million (US$1.0 million) sales commission paid to a sales agent in Spain, |
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an RMB 0.2 million (US$0.02 million) increase in share-based compensation expenses and RMB of 2.9 million (US$0.4 million) amortization expenses for intangible assets consisting of customer relationship and backlog. As a result, our selling expenses as a percentage of total net revenues was 4.1% in the first quarter of 2007, which increased from our predecessor’s selling expenses as a percentage of total net revenues in the first quarter of 2006, which was 2.6%. | ||
• | General and Administrative Expenses. Our general and administrative expenses was RMB 23.7 million (US$3.1 million) in the first quarter of 2007, which significantly increased from our predecessor’s general and administrative expenses of RMB 5.8 million in the first quarter of 2006, primarily as a result of a significant increase in the number of administrative staff and the hiring of senior executive officers related to the expansion of our operations, an RMB 4.7 million (US$0.6 million) increase in our share-based compensation expenses, amortization expenses in an amount of RMB 4.5 million (US$0.6 million) for intangible assets allocated to general and administrative expenses consisting of technology know-how. As a result, our general and administrative expenses as a percentage of total net revenues was 5.4% in the first quarter of 2007, which increased from our predecessor’s general and administrative expenses as a percentage of total net revenues in the first quarter of 2006, which was 2.9%. | |
• | Research and Development Expenses. Our research and development expenses was RMB 7.6 million (US$1.0 million) in the first quarter of 2007, which significantly increased from our predecessor’s research and development expenses of RMB 0.6 million in the first quarter of 2006, primarily due to an increased level of research and development activities relating to the improvement of the ingots and wafers production process and PV cell conversion efficiency. |
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The period from January 1, 2006 through September 4, 2006 (the predecessor period in 2006) and the period from August 7, 2006 (date of inception) through December 31, 2006 compared to year ended December 31, 2005 |
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• | Selling expenses. Selling expenses as a percentage of net revenues was 1.1% for the predecessor period in 2006, consistent compared to 2005, which amounted to 1.0%, and was 0.8% for the period from August 7, 2006 through December 31, 2006. The decrease in selling expenses as a percentage of our net revenues for the period from August 7, 2006 through December 31, 2006 compared to the predecessor period in 2006 was primarily due to our increased economies of scale and our increased annualized revenue base which outpaced the growth of selling expenses and both of which made it possible for us to reduce our selling expenses as a percentage of net revenues, while increasing our annualized selling expenses in absolute dollar amount. |
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• | General and Administrative Expenses. General and administrative expenses as a percentage of net revenues was 5.3% in 2005, 2.8% for the predecessor period in 2006 and 2.9% for the period from August 7, 2006 through December 31, 2006. The decrease in general and administrative expenses as a percentage of net revenues from 2005 to the predecessor period in 2006 was primarily due to our increased economies of scale and our increased annualized revenue base in the predecessor period in 2006. The increase in general and administrative expenses as a percentage of our net revenues from the predecessor period in 2006 to the period from August 7, 2006 through December 31, 2006 was primarily due to increased general and administrative expenses as we hired additional personnel and incurred additional professional expenses to support our operations in the period from August 7, 2006 through December 31, 2006. | |
• | Research and Development Expenses. Research and development expenses as a percentage of net revenues for the predecessor period in 2006, which amounted to 0.4%, was consistent compared to 2005, which was 0.5%. Research and development expenses as a percentage of net revenue increased to 2.6% for the period from August 7, 2006 through December 31, 2006, primarily due to the increase in research and development activities in such period related to improving ingots and wafers production process and output efficiency. |
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Year ended December 31, 2006 on a combined basis compared to year ended December 31, 2005 |
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• | Selling Expenses. Selling expenses increased significantly from RMB 3.5 million in 2005 to RMB 15.5 million (US$2.0 million) in 2006, due primarily to increased revenues over the same period. Selling expenses as a percentage of net revenues remained largely stable from 1.0% in 2005 to 0.9% in 2006. | |
• | General and Administrative Expenses. General and administrative expenses increased by 143.9% from RMB 19.2 million in 2005 to RMB 46.8 million (US$6.1 million) in 2006, due primarily to an increase in the number of administrative staff and the hiring of senior executive officers from 2005 to 2006 related to the expansion of our operations and their travel and other expenses, advisory fees related to financing arrangements and miscellaneous bank charges related to increased financing activities. General and administrative expenses as a percentage of total net revenues decreased from 5.3% in 2005 to 2.9% in 2006, primarily due to increased economies of scale in our operations following the expansion of our production capacity. | |
• | Research and Development Expenses. Research and development expenses significantly increased from RMB 1.8 million in 2005 to RMB 23.1 million (US$3.0 million) in 2006, primarily due to the increased level of research and development activities relating to PV cell production and the calibration of the optimal silicon mix. |
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Year Ended December 31, 2005 Compared to Year Ended December 31, 2004 |
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• | Selling expenses. Selling expenses increased significantly from RMB 1.0 million in 2004 to RMB 3.5 million in 2005, due primarily to increased advertising and other sales costs associated with the increased sales of PV modules. Selling expenses as a percentage of net revenues remained largely stable at 0.9% in 2004 and 1.0% in 2005. | |
• | General and Administrative Expenses. General and administrative expenses increased by significantly from RMB 7.5 million in 2004 to RMB 19.2 million in 2005, due primarily to increased salaries associated with an 80.3% increase in administrative staff related to our expanded operations. General and administrative expenses as a percentage of total net revenues decreased from 6.2% in 2004 to 5.3% in 2005, primarily due to greater economies of scale in our operations following the expansion of our production capacity. | |
• | Research and Development Expenses. Research and development expenses decreased by 39.3% from RMB 3.0 million in 2004 to RMB 1.8 million in 2005, primarily due to the increase in government grants from the PRC government, which are recorded as a reduction to research and development expenses and amounted to RMB 0.2 million and RMB 1.5 million in 2004 and 2005, respectively. Without taking into account such reductions, research and development expenses remained relatively stable from RMB 3.2 million in 2004 to RMB 3.3 million in 2005. |
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Yingli Green | |||||||||||||||||||||||||||||||||||||||||||||
Predecessor | Energy | Combined | Yingli Green Energy | ||||||||||||||||||||||||||||||||||||||||||
From | For the | For the three-month | |||||||||||||||||||||||||||||||||||||||||||
For the three-month periods ended | From July 1, | August 7, | three months | periods ended | |||||||||||||||||||||||||||||||||||||||||
2006 to | 2006 to | ended | |||||||||||||||||||||||||||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | March 31, | June 30, | September 4, | September 30, | September 30, | December 31, | March 31, | |||||||||||||||||||||||||||||||||||
2005 | 2005 | 2005 | 2005 | 2006 | 2006 | 2006 | 2006 | 2006(1) | 2006 | 2007 | |||||||||||||||||||||||||||||||||||
(in thousands of RMB except percentages) | |||||||||||||||||||||||||||||||||||||||||||||
Net revenues | 37,311 | 60,919 | 95,643 | 167,921 | 200,900 | 338,978 | 344,110 | 212,167 | 556,277 | 542,626 | 428,553 | ||||||||||||||||||||||||||||||||||
Cost of revenues | 21,694 | 37,569 | 63,326 | 131,015 | 153,677 | 218,056 | 239,903 | 157,123 | 397,026 | 417,724 | 338,943 | ||||||||||||||||||||||||||||||||||
Gross profit | 15,617 | 23,350 | 32,317 | 36,906 | 47,223 | 120,922 | 104,207 | 55,044 | 159,251 | 124,902 | 89,610 | ||||||||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||
Selling expenses | 315 | 483 | 675 | 2,073 | 5,272 | 587 | 3,731 | 195 | 3,926 | 5,674 | 17,371 | ||||||||||||||||||||||||||||||||||
General and administrative expenses | 2,540 | 4,088 | 4,890 | 7,660 | 5,777 | 7,979 | 10,710 | 3,028 | 13,738 | 19,290 | 23,692 | ||||||||||||||||||||||||||||||||||
Research and development expenses | 1,068 | 646 | 103 | (26 | ) | 593 | 92 | 2,980 | 511 | 3,491 | 18,960 | 7,579 | |||||||||||||||||||||||||||||||||
Total operating expenses | 3,923 | 5,217 | 5,668 | 9,707 | 11,642 | 8,658 | 17,421 | 3,734 | 21,155 | 43,924 | 48,642 | ||||||||||||||||||||||||||||||||||
Income from operations | 11,694 | 18,133 | 26,649 | 27,199 | 35,581 | 112,264 | 86,786 | 51,310 | 138,096 | 80,978 | 40,968 | ||||||||||||||||||||||||||||||||||
Other expense | (1,691 | ) | (1,429 | ) | (462 | ) | (1,439 | ) | (5,254 | ) | (9,713 | ) | (10,971 | ) | (6,117 | ) | (17,088 | ) | (27,901 | ) | (18,942 | ) | |||||||||||||||||||||||
Income tax (expense)/benefit | (1,672 | ) | (2,778 | ) | (4,351 | ) | (3,935 | ) | (5,375 | ) | (16,363 | ) | (808 | ) | (7,001 | ) | (7,809 | ) | (15,967 | ) | 360 | ||||||||||||||||||||||||
Net income before minority interest | 8,331 | 13,926 | 21,836 | 21,825 | 24,952 | 86,188 | 75,007 | 38,192 | 113,199 | 37,110 | 22,386 |
(1) | Represents the addition of the amounts for the specified financial statement line items of Tianwei Yingli, our predecessor, for the period from July 1, 2006 through September 4, 2006 and the amounts for the corresponding line items of Yingli Green Energy, for the period from August 7, 2006 (date of inception) through September 30, 2006. The presentation of such combined financial data for the three months ended September 30, 2006 is not in accordance with U.S. GAAP. For the period from August 7, 2006 (date of inception) through September 4, 2006, during which the financial statements of the predecessor and those of Yingli Green Energy overlap, Yingli Green Energy did not engage in any business or operations. |
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Cash Flows and Working Capital |
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Yingli Green | Yingli Green | |||||||||||||||||||||||||||||||||||
Predecessor | Energy | Combined | Energy | |||||||||||||||||||||||||||||||||
For the period | For the period | |||||||||||||||||||||||||||||||||||
from January 1, | from | |||||||||||||||||||||||||||||||||||
For the year ended | 2006 | August 7, 2006 | For the year | |||||||||||||||||||||||||||||||||
December 31, | through | through | ended | For the three-month | ||||||||||||||||||||||||||||||||
September 4, | December 31, | December 31, | period ended | |||||||||||||||||||||||||||||||||
2004 | 2005 | 2006 | 2006 | Reconciliation | 2006(1) | March 31, 2007 | ||||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | US$ | RMB | US$ | ||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||
Net cash (used in) provided by operating activities | 17,230 | (126,405 | ) | (306,668 | ) | (447,997 | ) | — | (754,665 | ) | (97,714 | ) | (240,661 | ) | (31,161 | ) | ||||||||||||||||||||
Net cash used in investing activities | (29,247 | ) | (227,406 | ) | (138,498 | ) | (466,795 | ) | — | (605,293 | ) | (78,373 | ) | (281,812 | ) | (36,489 | ) | |||||||||||||||||||
Net cash provided by financing activities | 29,000 | 346,937 | 517,271 | 990,951 | (86,970 | )(2) | 1,421,252 | 184,024 | 550,127 | 71,231 | ||||||||||||||||||||||||||
Effect of foreign currency exchange rate changes on cash | — | — | — | 2,296 | — | 2,296 | 297 | (692 | ) | (90 | ) | |||||||||||||||||||||||||
Net increase (decrease) in cash | 16,983 | (6,874 | ) | 72,105 | 78,455 | (86,970 | )(2) | 63,590 | 8,234 | 26,962 | 3,491 | |||||||||||||||||||||||||
Cash at the beginning of the period | 4,756 | 21,739 | 14,865 | — | — | 14,865 | 1,924 | 78,455 | 10,158 | |||||||||||||||||||||||||||
Cash at the end of the period | 21,739 | 14,865 | 86,970 | 78,455 | (86,970 | )(2) | 78,455 | 10,158 | 105,417 | 13,649 |
(1) | Represents the addition of the amounts for the specified line items of Tianwei Yingli, our predecessor, for the period from January 1, 2006 through September 4, 2006 and the amounts for the corresponding line items of us, for the period from August 7, 2006 (date of inception) through December 31, 2006, after considering the reconciling item. The presentation of such combined financial data for the year ended December 31, 2006 is not in accordance with U.S. GAAP. For the period from August 7, 2006 (date of inception) through September 4, 2006, during which the financial statements of the predecessor and those of Yingli Green Energy overlap, Yingli Green Energy did not engage in any business or operations. |
(2) | Represents the cash Yingli Green Energy assumed from Tianwei Yingli at the time of the transfer to Yingli Green Energy of the 51% equity interest in Tianwei Yingli held by Yingli Group. |
Operating Activities |
Investing Activities |
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Financing Activities |
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Payment due by period | |||||||||||||||||||||
More | |||||||||||||||||||||
Less than | than 5 | ||||||||||||||||||||
Total | 1 year | 1-3 years | 3-5 years | years | |||||||||||||||||
(in thousands of RMB) | |||||||||||||||||||||
Borrowings from banks | 255,286 | 255,286 | — | — | — | ||||||||||||||||
Borrowings from related parties | 31,849 | 31,849 | — | — | — | ||||||||||||||||
Borrowings from third parties | 12,000 | 12,000 | — | — | — | ||||||||||||||||
Mandatory redeemable bonds payable to Yingli Power | 293,110 | — | 293,110 | — | — | ||||||||||||||||
Mandatory convertible bonds payable to Yingli Power | 362,530 | — | 362,530 | — | — | ||||||||||||||||
Interest obligations on mandatory redeemable and convertible bonds payable to Yingli Power | 109,219 | 54,178 | 55,041 | — | — | ||||||||||||||||
Commitments for capital expenditures | 513,292 | 512,684 | 608 | — | — | ||||||||||||||||
Commitments for inventory purchase | 1,901,423 | 1,184,889 | 35,129 | 128,000 | 553,405 | ||||||||||||||||
Total | 3,478,709 | 2,050,886 | 746,418 | 128,000 | 553,405 | ||||||||||||||||
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Foreign Exchange Risk |
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Interest Rate Risk |
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Vertically integrated business model |
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Cost-effective and efficient manufacturing process |
High-quality products and growing brand recognition |
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Steadily improving research and development capability |
Established customer and supplier relationships |
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Experienced management team |
Expand PV systems sales to overseas markets |
• | fostering and improving our existing relationships with established PV system integrators and installers in Europe by continuing to participate in their large system integration and installation projects and supplying PV modules to these customers at competitive prices in exchange for the right to participate in their system integration projects; and | |
• | building up our capabilities to undertake PV system projects in collaboration with PV system integrators and installers in Europe and the United States. |
Expand global reach for our products |
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Secure and strengthen stable and long-term relationships with polysilicon suppliers |
Achieve technological advances through dedicated and continuous research and development efforts |
• | Adopt acid texturation technology for multicrystalline PV cells. We are in the process of adopting new equipment for our multicrystalline silicon PV cell production lines. These new equipment are able to isotropically create a textural effect on multicrystalline silicon PV cells to trap more light coming into multicrystalline PV cells and to reduce the reflection loss of this type of PV cells, hence substantially improving their short-circuit current. | |
• | Optimize phosphorous doping profile and front-sided contact designs of multicrystalline silicon PV cells. We intend to optimize emitter doping profiles and emitter uniformity of our multicrystalline silicon PV cells, which we believe will significantly improve the spectral response to short wave length lights and efficiency consistency of our PV cells. In addition, we are seeking to improve the front contact designs of our multicrystalline silicon PV cells, which allows a reduction of the shading and resistance losses of the cells. | |
• | Produce larger ingots and thinner wafers at lower cost. We intend to continue to explore ways to cast larger ingots and slice thinner wafers through cooperation with the furnace supplier to produce larger ingots. | |
• | Improve PV system technology. In line with our strategy to expand our downstream PV system sales and installation, we seek to continuously improve our PV system technology. We plan to accumulate experience in implementing largeon-grid PV system projects through cooperation with overseas PV system integrators and installers. We also plan to improve the technology forhome-use PV systems to facilitate the use of our PV modules as replacement for tiles or other roof-covering materials. | |
• | Optimize polysilicon feedstock mix. We plan to continue to optimize the silicon feedstock mixture used in the polysilicon ingot casting process and the methods by which they are prepared and mixed |
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in order to reduce the use of expensive high-purity polysilicon with minimal effect on the quality of our polysilicon wafers or the conversion efficiency of our PV cells. | ||
• | Establish dedicated research institutions. We plan to establish a PV research and development center to support our expansion into the downstream PV system integration market. In addition, we plan to establish a training facility to further enhance the knowledge base of our research and development staff and strengthen our research and development and engineering resources. |
Increase production capacity |
Expand market share in China |
• | strengthen our existing relationship with the PRC government and major Chinese telecommunications companies and equipment vendors, see “— Markets and Customers;” | |
• | pursue new business opportunities in China, such as selling more independent PV systems to local residential users (as currently being pursued by Tibetan Yingli) and installing services for fire-prevention, telecommunication and weather forecasting stations (as currently being pursued by our subsidiary in Chengdu); | |
• | promote the awareness of PV products in general and our brand name in particular by installing demonstration PV systems in public areas and through donation of PV systems; and | |
• | leverage the experience and expertise obtained in overseas markets to develop a technological edge over our competitors in China as well as build up a greater visibility for our brand name and products in China. |
Introduction |
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• | Environmental Friendliness and Renewability.Solar power is one of the most environmentally friendly cleanest sources of electricity without air or water emissions, noise, vibrations or any waste generation. | |
• | Peak Energy Generation Ability. Solar power is well-suited to match peak energy needs as maximum sunlight hours generally correspond to peak demand periods when electricity prices are at their highest. | |
• | Easily Located with End Users.Unlike other renewable resources such as hydroelectric and wind power, solar power can be utilized anywhere that receives sunlight and directly at the site where the power will be used. As a result, solar power avoids the expense of, and energy losses associated with, transmission and distribution of electricity from large-scale electrical plants to end users. | |
• | No Fluctuations in Operating Costs. Unlike fossil and nuclear fuels, solar energy has no fuel price volatility. Although there is variability in the amount and timing of sunlight over the day, season and year, a properly sized and configured system can be designed for high reliability while supplying electricity on a long-term, fixed-cost basis. | |
• | Reliability and Durability.Without moving parts or the need for periodic maintenance, solar power systems are among the most reliable forms of electricity generation. Accelerated aging tests have shown that solar modules can operate for at least 25 to 30 years without requiring major maintenance. | |
• | Modularity.PV systems are easily modularized and scalable, and therefore can be deployed in many different sizes and configurations to meet the specific needs of the user. PV modules are increasingly used to serve as both a power generator and the exterior of a building. Like architectural glass, PV modules can be installed on the roofs and facades of residential and commercial buildings. |
PV installations at end-user locations in selected | ||||||||||||||||||||||||
markets | ||||||||||||||||||||||||
2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |||||||||||||||||||
(megawatts) | ||||||||||||||||||||||||
Germany | 79 | 83 | 170 | 546 | 837 | 968 | ||||||||||||||||||
Japan | 122 | 161 | 218 | 256 | 292 | 300 | ||||||||||||||||||
United States | 37 | 57 | 66 | 84 | 105 | 185 | ||||||||||||||||||
Europe (ex-Germany) | 23 | 25 | 53 | 75 | 89 | 140 | ||||||||||||||||||
Rest of the World | 84 | 101 | 91 | 125 | 137 | 151 |
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Key Growth Drivers of the Solar Energy Industry |
Government Incentives |
Advances in Technologies Making Solar Power More Cost-Efficient |
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Rising Energy Demand and Increasing Costs of Finite Fossil Energy Resources |
Increasing Environmental Concerns over Conventional Energy |
Narrowing Cost Differentials between Solar and Conventional Energy Sources |
Key Challenges for the Solar Energy Industry |
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The PV Industry Value Chain |
Polysilicon Ingots and Blocks |
Polysilicon Wafers |
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PV Cells |
PV Modules |
Optimum | ||||||||||||||
Maximum | operating | |||||||||||||
Dimensions | Weight | power | voltage | |||||||||||
(mm x mm) | (kilogram) | (watts) | (volts) | |||||||||||
1310 × 990 | 15.4 | 150 – 170 | 23 | |||||||||||
1172 × 541 | 7.7 | 75 – 85 | 17 | |||||||||||
1580 × 808 | 15.7 | 145 – 170 | 35 | |||||||||||
1470 × 680 | 12.0 | 110 – 120 | 17 |
Integrated PV Systems |
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Manufacturing Process |
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Manufacturing Capacity Expansion |
As of December 31, | ||||||||||||||||||||||||
As of | ||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | March 31, 2007 | |||||||||||||||||||
(in megawatts) | ||||||||||||||||||||||||
Ingot and wafers | — | 6 | 6 | 70 | 95 | 95 | ||||||||||||||||||
PV cells | — | — | 6 | 10 | 60 | 90 | ||||||||||||||||||
PV modules | 3 | 30 | 50 | 100 | 100 | 100 |
Raw Materials |
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Silicon Raw Material |
Quality Control |
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Certification or test dates | Certification or test standard | Relevant products | ||
February 2004, and renewed in December 2006 | ISO 9001: 2000 quality system certification, established by the International Organization for Standardization, an organization formed by delegates from member countries to establish international quality assurance standards for products and manufacturing processes. | The design and manufacture of PV application system controller, integrated inverter and controller; the manufacture of multicrystalline polysilicon wafers, crystalline silicon PV cells and modules | ||
April 2004 | UL certification, authorized by Underwriters Laboratories Inc., an independent, not-for-profit product-safety testing and certification organization in the United States; evaluated in accordance to USL (Standard for Safety, Flat-Plate Photovoltaic Modules and Panels, UL 1703) and CNL (Canadian Other Recognized Document, ULC/ORD-C1703-01, Flat-Plate Photovoltaic Modules and Panels). | Certain models of PV modules | ||
June 2004, June 2006 and February 2007 | IEC 61215: 1993 test standard, administered by Arizona State University Photovoltaic Testing Laboratory. | Certain models of PV modules | ||
An international test standard recognized by the United States for crystalline silicon PV modules, providing assurance that the product is reliable and durable. | ||||
August 2004, January 2006 and February 2007 | TÜV certification, conducted by TÜV Immissionsschutz und Energiesysteme GmbH, an independent approval agency in Germany, against the requirements of Safety Class II Test on PV modules. | Certain models of PV modules |
Research and Development |
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As of March 31, 2007 | |||||||||
Number of | Percentage | ||||||||
employees | of total | ||||||||
Manufacturing | 1,063 | 60.9 | % | ||||||
Quality Inspection | 64 | 3.7 | |||||||
Research and Development | 88 | 5.0 | |||||||
Procurement, Sales and Marketing | 69 | 4.0 | |||||||
Management and Administrative | 168 | 9.6 | |||||||
Logistics, Manufacturing Support and Others | 294 | 16.8 | |||||||
Total | 1,746 | 100.0 | % | ||||||
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Name | Age | Yingli Green Energy | Tianwei Yingli | |||||
Liansheng Miao | 50 | Chairperson of board of directors and chief executive officer | Vice chairperson and chief executive officer | |||||
Shujun Li | 34 | Director | — | |||||
George Jian Chuang | 36 | Director | — | |||||
Xiangdong Wang | 44 | Director and vice president | Director and vice president | |||||
Iain Ferguson Bruce | 66 | Independent director* | — | |||||
Jiesi Wu | 55 | Independent director* | — | |||||
Chi Ping Martin Lau | 34 | Independent director* | — | |||||
Zhiheng Zhao | 57 | Vice president | Vice president | |||||
Zongwei Li | 34 | Chief financial officer | Chief financial officer | |||||
Guoxiao Yao | 43 | Chief technology officer | Chief technology officer | |||||
Seok Jin Lee | 51 | Chief operating officer | Chief operating officer | |||||
Nabih Cherradi | 49 | Vice president | Vice president | |||||
Yiyu Wang | 32 | Financial controller | Financial controller | |||||
Qiang Ding | 52 | — | Chairperson | |||||
Haiqing Bian | 39 | — | Director | |||||
Mingjin Yang | 42 | — | Director | |||||
Qing Miao | 26 | — | Director | |||||
Conghui Liu | 30 | — | Director |
* | Effective upon completion of this offering. |
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Audit Committee |
• | selecting our independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by our independent registered public accounting firm; | |
• | reviewing with our independent registered public accounting firm any audit problems or difficulties and management’s response; | |
• | reviewing and approving all proposed related-party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; | |
• | discussing the annual audited financial statements with management and our independent registered public accounting firm; | |
• | reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; | |
• | annually reviewing and reassessing the adequacy of our audit committee charter; | |
• | such other matters that are specifically delegated to its audit committee by our board of directors from time to time; |
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• | meeting separately and periodically with management and our internal and independent registered public accounting firm; and | |
• | reporting regularly to the full board of directors. |
Compensation Committee |
• | approving and overseeing the compensation package for our executive officers; | |
• | reviewing and making recommendations to the board with respect to the compensation of our directors; | |
• | reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of our chief executive officer in light of those goals and objectives, and setting the compensation level of our chief executive officer based on this evaluation; and | |
• | reviewing periodically and making recommendations to the board regarding any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans. |
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Ordinary shares | Exercise price | |||||||||
underlying | per share | |||||||||
Name | outstanding option | (US$) | Grant date | Expiration date | ||||||
Zongwei Li | * | 2.10 | December 28, 2006 | December 28, 2016 | ||||||
Guoxiao Yao | * | 2.10 | December 28, 2006 | December 28, 2016 | ||||||
Yiyu Wang | * | 2.10 | December 28, 2006 | December 28, 2016 | ||||||
Seok Jin Lee | * | 2.10 | December 28, 2006 | December 28, 2016 | ||||||
Iain Ferguson Bruce | * | IPO Price(1) | (2) | (3) | ||||||
Jiesi Wu | * | IPO Price(1) | (2) | (3) | ||||||
Chi Ping Martin Lau | * | IPO Price(1) | (2) | (3) | ||||||
Another employee | * | IPO Price(1) | (2) | (3) | ||||||
Total: | 725,929 | |||||||||
* | Less than 1% of our outstanding share capital. |
(1) | IPO Price represents the public offering price for each ADS specified on the cover page of this prospectus divided by the number of ordinary shares represented by each ADS. |
(2) | Grant date for these four individuals will be the closing date of this offering. |
(3) | Expiration date for these four individuals will be the tenth anniversary of the closing date of this offering. |
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Restricted | End of vesting | ||||||||||||
Name | shares granted | Grant date | period | ||||||||||
Liansheng Miao | * | January 19, 2007 | January 19, 2012 | ||||||||||
Xiangdong Wang | * | January 19, 2007 | January 19, 2012 | ||||||||||
Zhiheng Zhao | * | January 19, 2007 | January 19, 2012 | ||||||||||
Nabih Cherradi | * | April 18, 2007 | April 18, 2012 | ||||||||||
Qiang Ding | * | January 19, 2007 | January 19, 2012 | ||||||||||
Haiqing Bian | * | January 19, 2007 | January 19, 2012 | ||||||||||
Mingjin Yang | * | January 19, 2007 | January 19, 2012 | ||||||||||
Qing Miao | * | January 19, 2007 | January 19, 2012 | ||||||||||
Conghui Liu | * | January 19, 2007 | January 19, 2012 | ||||||||||
Directors and executive officers as a group | 1,606,300 | ||||||||||||
Other trust participants | 1,014,760 | ||||||||||||
Total: | 2,621,060 | ||||||||||||
* | Less than 1% of our outstanding share capital. |
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• | each of our directors and executive officers; | |
• | all of our directors and executive officers as a group; | |
• | each person known to us to own beneficially more than 5.0% of our ordinary shares; and | |
• | each selling shareholder. |
Ordinary shares | ||||||||||||||||||||||||
beneficially owned prior to | Ordinary shares being | Shares beneficially owned | ||||||||||||||||||||||
this offering(1)(2) | sold in this offering(3) | after this offering(1)(2)(3) | ||||||||||||||||||||||
Number | % | Number | % | Number | % | |||||||||||||||||||
Directors and Executive Officers: | ||||||||||||||||||||||||
Liansheng Miao(4) | 59,800,000 | 59.58 | % | 2,450,000 | 2.44 | % | 58,016,666 | 45.71 | % | |||||||||||||||
Shujun Li(5) | 9,897,431 | 9.86 | 1,630,000 | 1.62 | 8,267,431 | 6.51 | ||||||||||||||||||
George Jian Chuang(6) | 9,307,135 | 9.27 | 2,110,345 | 2.11 | 7,196,790 | 5.67 | ||||||||||||||||||
Xiangdong Wang | — | — | — | — | — | — | ||||||||||||||||||
Zhiheng Zhao | — | — | — | — | — | — | ||||||||||||||||||
Zongwei Li | — | — | — | — | — | — | ||||||||||||||||||
Guoxiao Yao | — | — | — | — | — | — | ||||||||||||||||||
Seok Jin Lee | — | — | — | — | — | — | ||||||||||||||||||
Nabih Cherradi | — | — | — | — | — | — | ||||||||||||||||||
Yiyu Wang | — | — | — | — | — | — | ||||||||||||||||||
All directors and executive officers as a group | 79,004,566 | 78.71 | % | 6,190,345 | 6.17 | % | 73,480,887 | 57.89 | % | |||||||||||||||
Principal and Selling Shareholders: | ||||||||||||||||||||||||
Yingli Power Holding Company Ltd.(7) | 59,800,000 | 59.58 | % | 2,450,000 | 2.44 | % | 58,016,666 | 45.71 | % | |||||||||||||||
Baytree Investments (Mauritius) Pte Ltd.(8) | 9,307,135 | 9.27 | 2,110,345 | 2.10 | 7,196,790 | 5.67 | ||||||||||||||||||
Inspiration Partners Limited(9) | 8,081,081 | 8.05 | 1,350,000 | 1.34 | 6,731,081 | 5.30 | ||||||||||||||||||
Deutsche Bank AG(10) | 5,340,088 | 5.32 | — | — | 4,673,422 | 3.68 | ||||||||||||||||||
J.P. Morgan Securities Ltd.(11) | 1,654,602 | 1.65 | 375,172 | * | 1,279,430 | 1.01 | ||||||||||||||||||
TB Holdings Ltd.(12) | 1,137,539 | 1.13 | 200,000 | * | 937,539 | * | ||||||||||||||||||
New Horizon Keensolar Investment Co., Ltd.(13) | 1,034,126 | 1.03 | 234,483 | * | 799,643 | * | ||||||||||||||||||
Fairdeal Development Ltd.(14) | 678,811 | * | 80,000 | * | 598,811 | * | ||||||||||||||||||
Selling shareholders as a group who will be selling in the over-allotment option | 21,893,294 | 21.81 | % | 4,350,000 | 4.33 | % | 17,543,294 | 13.82 | % |
(1) | Beneficial ownership is determined in accordance with Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, and includes voting or investment power with respect to the securities. |
(2) | Percentage of beneficial ownership of each listed person prior to this offering is based on 100,373,609 ordinary shares outstanding, including ordinary shares convertible from our outstanding Series A preferred shares and Series B preferred shares and the ordinary shares issued upon the exercise of the Series A warrant, as well as (i) the ordinary shares underlying share options exercisable by |
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such person and (ii) restricted ordinary shares awarded to such person that can be vested, in each case within 60 days of the date of this prospectus, not including share options that can be early exercised, at the discretion of the holder, into unvested ordinary shares. Percentage of beneficial ownership of each listed person after this offering is based on 126,923,609 ordinary shares outstanding immediately after the closing of this offering and (i) the ordinary shares underlying share options exercisable by such person and (ii) restricted ordinary shares awarded to such person that can be vested, in each case within 60 days of the date of this prospectus, not including share options that can be early exercised, at the discretion of the holder, into unvested ordinary shares. | |
(3) | Assumes the full exercise of the underwriters’ option to purchase additional ADSs from the selling shareholders identified above and assumes no other change to the number of the ADSs offered by the selling shareholders and us in this prospectus. In the event of a partial exercise of the over-allotment option, the respective number of the ADSs to be sold by each selling shareholder will be proportionally reduced. |
(4) | Represents 59,800,000 of our ordinary shares owned by Yingli Power, our controlling shareholder, which is 100% beneficially owned by Mr. Miao. Upon completion of this offering, Mr. Miao’s family trust will beneficially own all of the issued and outstanding share capital of Yingli Power. Mr. Miao’s business address is c/o Tianwei Yingli New Energy Resources Co., Ltd., No. 3055 Middle Fuxing Road, Baoding, People’s Republic of China. Under the relevant provisions of the Trust Deed for the mandatory exchangeable notes and the understanding between Yingli Power and Deutsche Bank AG, Singapore Branch, Yingli Power is obligated to repurchase up to US$8 million worth of our shares held by Deutsche Bank AG, Singapore Branch, upon this offering and after the exercise of the exchange rights under the mandatory exchangeable notes by Deutsche Bank AG, Singapore Branch. The number of shares beneficially owned by Yingli Power after this offering is calculated to take into consideration of such repurchase by using an assumed initial public offering price of US$12.00 per share, the midpoint of the estimate range of the initial public offering price. |
(5) | Consists of 8,081,081 of our Series A preferred shares issued to Inspiration Partners Limited, which are convertible into 8,081,081 of our ordinary shares, 1,137,539 of our Series B preferred shares issued to TB Holdings Ltd., which are convertible into 1,137,539 of our ordinary shares and 678,811 of our ordinary shares purchased and owned by Fairdeal Development Ltd. through the exercise of the Series A warrant. For a description of the beneficial ownership of our Series A preferred shares by Inspiration Partners Limited, see note 9 below. For a description of the beneficial ownership of our Series B preferred shares by TB Holdings Ltd., see note 12 below. For a description of the beneficial ownership of our ordinary shares by Fairdeal Development Ltd., see note 14 below. Mr. Shujun Li disclaims beneficial ownership of our shares held by Inspiration Partners Limited, TB Holdings Ltd. and Fairdeal Development Ltd., except to the extent of his pecuniary interest in these shares. Mr. Li’s business address is c/o Tianwei Yingli New Energy Resources Co., Ltd., No. 3055 Middle Fuxing Road, Baoding, People’s Republic of China. |
(6) | Represents 9,307,135 of our Series B preferred shares beneficially owned by Baytree Investments (Mauritius) Pte Ltd., which is indirectly controlled by Mr. George Jian Chuang, which are convertible into 9,307,135 of our ordinary shares. For a description of the beneficial ownership of our ordinary shares by Baytree Investments (Mauritius) Pte Ltd, see note 8 below. Mr. Chuang disclaims beneficial ownership of our shares held by Baytree Investments (Mauritius) Pte Ltd. Mr. Chuang’s business address is c/o Tianwei Yingli New Energy Resources Co., Ltd., No. 3055 Middle Fuxing Road, Baoding, People’s Republic of China. |
(7) | Represents 59,800,000 of our ordinary shares beneficially owned by Yingli Power. Yingli Power is 100% beneficially owned by Mr. Liansheng Miao. Upon completion of this offering, Mr. Miao’s family trust will beneficially own all of the issued and outstanding share capital of Yingli Power. The mailing address of Yingli Power is Romasco Place, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola, British Virgin Islands. Under the relevant provisions of the Trust Deed for the mandatory exchangeable notes and the understanding between Yingli Power and Deutsche Bank AG, Singapore Branch, Yingli Power is obligated to repurchase up to US$8 million worth of our shares held by Deutsche Bank AG, Singapore Branch, upon this offering and after the exercise of the exchange rights under the mandatory exchangeable notes by Deutsche Bank AG, Singapore Branch. The number of shares beneficially owned by Yingli Power after this offering is calculated to take into consideration of such repurchase by using an assumed initial public offering price of US$12.00 per share, the midpoint of the estimate range of the initial public offering price. |
(8) | Consists of 9,307,135 of our Series B preferred shares issued to Baytree Investments which are convertible into 9,307,135 of our ordinary shares. Baytree Investments is a Mauritius-incorporated entity and is wholly owned by Seletar Investments Pte Ltd., which is in turn wholly owned by Temasek Capital (Private) Limited. Temasek Capital (Private) Limited is in turn wholly owned by Temasek Holdings (Private) Limited. Temasek Holdings (Private) Limited, a Singaporean company wholly owned by the Singapore Ministry of Finance (Incorporated), may be deemed to have indirect voting and dispositive power over the shares owned beneficially and of record by Baytree Investments (Mauritius) Pte Ltd. The mailing addresses of Baytree Investments and Temasek Holdings (Private) Ltd. are 60B Orchard Road, #06-18 Tower 2, The Atrium@Orchard, Singapore 238891. |
(9) | Consists of 8,081,081 of our Series A preferred shares which are convertible into 8,081,081 of our ordinary shares. Inspiration Partners Limited is a British Virgin Islands exempted company with limited liability and Mr. Shujun Li is a director of Inspiration Partners Limited. Inspiration Partners Limited is wholly owned by Inspiration Partner, L.P., a Cayman Islands partnership, which is controlled by TB Inspiration Partners GP Limited, its general partner. TB Inspiration Partners GP Limited is 100% owned by Shujun Li. The address of Inspiration Partners Limited is AZ1A Center, Unit 2701B, 1233 Lujiazui Ring Road, Shanghai, PRC 200120. The warrant was issued to TB Management Ltd., a British Virgin Islands exempted company with limited liability, which is 90% owned by Mr. Shujun Li. TB Management Ltd. has since transferred the warrant to Fairdeal Development Ltd., a British Virgin Islands exempted company with limited liability and wholly controlled by Mr. Shujun Li. Fairdeal Development Ltd.’s business address is AZIA Center, Unit 2701B, 1233 Lujiazui Ring Road, Shanghai, PRC 200120. |
(10) | Represents the number of our ordinary shares into which the mandatory exchangeable notes issued by Yingli Power to Deutsche Bank AG, Singapore Branch, as initial purchaser, are exchangeable into, substantially equal to our effective ownership of a 3.73% |
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equity interest in Tianwei Yingli on an as-converted, fully diluted basis as of the date of exchange, assuming our equity interest in Tianwei Yingli is 70.11% and the total number of ordinary shares outstanding, on fully diluted basis, is 95,033,521 immediately prior to such exchange. Yingli Power also granted a warrant to Deutsche Bank AG, as initial purchaser, to purchase such number of ordinary shares in us held by Yingli Power at the time of the exercise of the warrant that equals 6.5% of our ordinary shares on a fully-diluted basis. The warrant may be exercised upon any listing of our ordinary shares on the New York Stock Exchange (or other internationally recognized stock exchange) which occurs after the mandatory exchangeable notes and the mandatory redeemable notes issued by Yingli Power to Deutsche Bank AG have been repaid in full (the scheduled final maturity date being November 16, 2008). The underlying investors in the mandatory exchangeable notes issued by Yingli Power to Deutsche Bank AG, Singapore Branch, may beneficially own a portion of the shares listed above under Deutsche Bank AG, Singapore Branch after this offering. Under the relevant provisions of the Trust Deed for the mandatory exchangeable notes and the understanding between Yingli Power and Deutsche Bank AG, Singapore Branch, Yingli Power is obligated to repurchase up to US$8 million worth of our shares held by Deutsche Bank AG, Singapore Branch, upon the initial public offering and after the exercise of the exchange rights under the mandatory exchangeable notes by Deutsche Bank AG, Singapore Branch. The number of shares beneficially owned by Deutsche Bank AG, Singapore Branch, and the underlying investors in the mandatory exchangeable notes after this offering is calculated to take into consideration of such repurchase by using an assumed initial public offering price of US$12.00 per share, the midpoint of the estimate range of the initial public offering price. |
(11) | Consists of 1,654,602 of our Series B preferred shares issued to J.P. Morgan Securities Ltd. which are convertible into 1,654,602 of our ordinary shares. J.P. Morgan Securities Ltd. is ultimately controlled by J.P. Morgan Chase & Co. J.P. Morgan Securities Ltd.’s address is 125 London Wall, London, EC2Y 5AJ, United Kingdom. |
(12) | Consists of 1,137,539 of our Series B preferred shares issued to TB Holdings Ltd. which are convertible into 1,137,539 of our ordinary shares. TB Holdings Ltd. is a British Virgin Islands exempted company with limited liability, and Mr. Shujun Li is a director of TB Holdings Ltd. TB Holdings Ltd. is wholly owned by Trustbridge Partners I, L.P., a Cayman Islands exempted limited partnership, which is controlled by TB Partners GP1, L.P., its general partner. TB Partners GP1, L.P. is controlled by TB Partners GP Limited, its general partner. TB Partners GP Limited is 100% owned by Mr. Shujun Li. TB Holdings Ltd.’s business address is AZIA Center, Unit 2701B, 1233 Lujiazui Ring Road, Shanghai, P.R.China 200120. |
(13) | Consists of 1,034,126 of our Series B preferred shares issued to New Horizon Keensolar Investment Co., Ltd. which are convertible into 1,034,126 of our ordinary shares. New Horizon Keensolar Investment Co., Ltd. is a British Virgin Islands exempted company with limited liability. It is wholly owned by New Horizon Fund, L.P., a Cayman Islands exempted limited partnership, which is controlled by New Horizon Partners Ltd., its sole general partner and a Cayman Islands exempted company, which is 50% owned by Mr. Jianming Yu, a PRC citizen. Mr. Yu disclaims beneficial ownership of our Series B preferred shares held by New Horizon Keensolar Investment Co., Ltd., except to the extent of his pecuniary interest in these shares. New Horizon Keensolar Investment Co., Ltd.’s address are Jin Bao Tower 1204, 89 Jin Bao Street, Dongcheng District, Beijing China 100005. |
(14) | Consists of 678,811 of our ordinary shares issued to Fairdeal Development Ltd. upon its exercise of the Series A warrant on May 23, 2007. The warrant was issued to TB Management Ltd., a British Virgin Islands exempted company with limited liability, which is 90% owned by Mr. Shujun Li. TB Management Ltd. has since transferred the warrant to Fairdeal Development Ltd. Fairdeal Development Ltd. is a British Virgin Islands exempted company with limited liability. DBS Trustee Limited, a Singaporean company, holds 100% of the issued and outstanding shares of Fairdeal Development Ltd. on behalf of the family trust of Mr. Shujun Li. Fairdeal Development Ltd.’s business address is AZIA Center, Unit 2701B, 1233 Lujiazui Ring Road, Shanghai, P.R. China 200120. |
• | On August 7, 2006, in connection with our incorporation, Yingli Power subscribed for 50 million of our ordinary shares at par value of US$0.01 per share for a total consideration of US$500,000. On September 25, 2006, Yingli Power subscribed for an additional 9.8 million of our ordinary shares for a consideration of US$100,000. | |
• | On September 28, 2007, Inspiration Partners Limited acquired 8,081,081 of our Series A preferred shares at a price of US$2.10 per share for a consideration of US$17 million in our Series A preferred equity financing; | |
• | On December 22, 2006, Baytree Investments (Mauritius) Pte Ltd. acquired 9,307,135 of our Series B preferred shares at US$4.835 per share for a consideration of US$45 million as part of our Series B preferred equity financing; | |
• | On December 22, 2006, J.P. Morgan Securities Ltd. acquired 1,654,602 of our Series B preferred shares at US$4.835 per share for a consideration of US$8 million as part of our Series B preferred equity financing; |
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• | On December 22, 2006, New Horizon Keensolar Investment Co., Ltd. acquired 1,034,126 of our Series B preferred shares at US$4.835 per share for a consideration of US$5 million as part of our Series B preferred equity financing; | |
• | On December 29, 2006 and January 4, 2007, TB Holdings Ltd. acquired an aggregate of 1,137,539 of our Series B preferred shares at US$4.835 per share for a total consideration of US$5.5 million as part of our Series B preferred equity financing; and | |
• | On May 23, 2007, Fairdeal Development Ltd. acquired 678,811 of our ordinary shares at US$2.10 per share for a consideration of approximately US$1.4 million by exercising the Series A warrant we originally issued to TB Management Ltd., an affiliate of Inspiration Partners Limited, which was later transferred by TB Management Ltd. to Fairdeal Development Ltd. |
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Series A Preferred Shares and Related Warrant |
Mandatory Redeemable Bonds and Mandatory Convertible Bonds |
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Series B Preferred Shares and Related Warrants |
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Capital Contributions to Tianwei Yingli |
China Sunshine Warrant |
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• | The Company Law (1993), as amended; | |
• | The Law on Sino-Foreign Equity Joint Venture Enterprises (1979), as amended; and | |
• | Rules on Implementation of the Law on Sino-Foreign Equity Joint Venture Enterprises (1983), as amended. |
• | amendment to the articles of association of the equity joint venture; | |
• | merger of the equity joint venture with another entity; | |
• | division of the equity joint venture; | |
• | termination or dissolution of the equity joint venture; and | |
• | increase, reduction or transfer of the registered capital of the equity joint venture. |
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• | Foreign Currency Administration Rules (1996), as amended; and | |
• | Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996). |
• | The Company Law (1993), as amended; | |
• | The Law on Sino-Foreign Equity Joint Venture Enterprises (1979), as amended; and | |
• | Rules on Implementation of the Law on Sino-Foreign Equity Joint Venture Enterprises (1983), as amended. |
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• | The CSRC has jurisdiction over our offering; | |
• | Given that we have completed the transfer of the controlling equity interest in Tianwei Yingli from Yingli Group before September 8, 2006, the date on which the new regulation became effective, it is not necessary for us to submit an application to the CSRC to obtain its approval of the listing and subsequent trading of our ADSs on the NYSE; and | |
• | If an application for CSRC approval is required from us, we have a justifiable basis to request a waiver from the CSRC, if and when such procedures are established to obtain such a waiver. |
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• | increase our capital by such sum, to be divided into shares of such amounts, as the resolution shall prescribe; | |
• | consolidate and divide all or any of our share capital into shares of larger amount than our existing shares; |
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• | divide our shares into several classes and without prejudice to any special rights previously conferred on the holders of existing shares, attach to these shares any preferential or special rights, privileges or restrictions, provided that after the shareholders authorize a class of shares without any special rights, privileges or restrictions, our board of directors may, without further resolution of the shareholders, issue shares of such class and attach such rights, privileges or restrictions, and following such issuance of the shares of such class, a two-thirds vote of such class of shares will be required to further vary the special rights, privileges or restrictions attached to such class of shares; | |
• | sub-divide our shares into shares of smaller amount than is fixed by our memorandum and articles of association, subject to the Companies Law and may determine that, among the shares so sub-divided, some of such shares may have preferred or other rights or restrictions that are different from those applicable to the other such shares resulting from the sub-division; and | |
• | cancel any shares which at the date of the passing of the resolution have not been taken or agreed to be taken by any person, and diminish the amount of our share capital by the amount of the shares so cancelled. |
(a) | the instrument of transfer is lodged with us accompanied by the certificate for the ordinary shares to which it relates and such other evidence as the directors may reasonably require to show the right of the transferor to make the transfer; |
(b) | the instrument of transfer is in respect of only one class of share; |
(c) | the instrument of transfer is properly stamped (in circumstances where stamping is required); |
(d) | in the case of a transfer to joint holders, the number of joint holders to whom the share is to be transferred does not exceed four; |
(e) | a fee, if any, of such maximum sum as the NYSE may determine to be payable or such lesser sum as the directors may from time to time require is paid to us in respect thereof. |
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(i) | all checks or warrants in respect of dividends of such shares, not being less than three in number, for any sums payable in cash to the holder of such shares have remained uncashed for a period of 12 years prior to the publication of the advertisement and during the three months referred to in paragraph (3) below; | |
(ii) | we have not during that time received any indication of the whereabouts or existence of the shareholder or person entitled to such shares by death, bankruptcy or operation of law; and | |
(iii) | we have caused an advertisement to be published in newspapers in the manner stipulated by our amended and restated articles of association, giving notice of our intention to sell these shares, and a period of three months has elapsed since such advertisement and NYSE has been notified of such intention. |
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Inspection of Books and Records |
• | an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies; | |
• | an exempted company’s register of members is not open to inspection; | |
• | an exempted company does not have to hold an annual general meeting; | |
• | an exempted company may issue no par value, negotiable or bearer shares; | |
• | an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance); | |
• | an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; | |
• | an exempted company may register as a limited duration company; and | |
• | an exempted company may register as a segregated portfolio company. |
Mergers and Similar Arrangements |
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• | the Company is not proposing to act illegally or beyond its power and the statutory provisions as to the due majority vote have been complied with; | |
• | the shareholders have been fairly represented at the meeting in question; | |
• | the arrangement is such that a businessman would reasonably approve; and | |
• | the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Law or that would amount to a “fraud on minority.” |
Shareholders’ Suits |
• | a company acts or proposes to act illegally or beyond its power; | |
• | the act complained of, although not beyond the power of the company, could be effected duly if authorized by more than a simple majority vote that has not been obtained; and | |
• | those who control the company are perpetrating a “fraud on the minority.” |
Indemnification of Directors and Executive Officers and Limitation of Liability |
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Anti-takeover Provisions in the Amended and Restated Memorandum and Articles of Association |
Directors’ Fiduciary Duties |
• | a duty to act in good faith in the best interests of the company; | |
• | a duty not to personally profit from opportunities that arise from the office of director; | |
• | a duty to avoid conflicts of interest; and | |
• | a duty to exercise powers for the purpose for which such powers were intended. |
Shareholder Action by Written Consent |
Shareholder Proposals |
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Cumulative Voting |
Removal of Directors |
Transactions with Interested Shareholders |
Sale of Assets |
Dissolution; Winding up |
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Variation of Rights of Shares |
Amendment of Governing Documents |
Rights of Non-resident or Foreign Shareholders |
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Share Options and Restricted Shares |
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How will you receive dividends and other distributions on the shares underlying your ADSs? |
• | Cash. The depositary will distribute any U.S. dollars available to it resulting from a cash dividend or other cash distribution or the net proceeds of sales of any other distribution or portion thereof (to the |
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extent applicable), on an averaged or other practicable basis, subject to (i) appropriate adjustments for taxes withheld, (ii) such distribution being impermissible or impracticable with respect to certain registered holders, and (iii) deduction of the depositary’s expenses in (1) converting any foreign currency to U.S. dollars to the extent that it determines that such conversion may be made on a reasonable basis, (2) transferring foreign currency or U.S. dollars to the United States by such means as the depositary may determine to the extent that it determines that such transfer may be made on a reasonable basis, (3) obtaining any approval or license of any governmental authority required for such conversion or transfer, which is obtainable at a reasonable cost and within a reasonable time and (4) making any sale by public or private means in any commercially reasonable manner.If exchange rates fluctuate during a time when the depositary cannot convert a foreign currency, you may lose some or all of the value of the distribution. | ||
• | Shares. In the case of a distribution in shares, the depositary will issue additional ADRs to evidence thenumberof ADSs representing such shares. Only whole ADSs will be issued. Any shares which would result in fractional ADSs will be sold and the net proceeds will be distributed in the same manner as cash to the ADR holders entitled thereto. | |
• | Rights to receive additional shares. In the case of a distribution of rights to subscribe for additional shares or other rights, if we provide satisfactory evidence that the depositary may lawfully distribute such rights, the depositary will distribute warrants or other instruments representing such rights. However, if we do not furnish such evidence, the depositary may: |
• | sell such rights if practicable and distribute the net proceeds as cash; or | |
• | if it is not practicable to sell such rights, do nothing and allow such rights to lapse, in which case ADR holders will receive nothing. |
We have no obligation to file a registration statement under the Securities Act in order to make any rights available to ADR holders. |
• | Other Distributions. In the case of a distribution of securities or property other than those described above, the depositary may either (i) distribute such securities or property in any manner itdeemsequitable and practicable or (ii) to the extent the depositary deems distribution of such securities or property not to be equitable and practicable, sell such securities or property and distribute any net proceeds in the same way it distributes cash. |
How does the depositary issue ADSs? |
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How do ADR holders cancel an ADS and obtain deposited securities? |
• | temporary delays caused by closing our transfer books or those of the depositary or the deposit of shares in connection with voting at a shareholders’ meeting, or the payment of dividends; | |
• | the payment of fees, taxes and similar charges; or | |
• | compliance with any U.S. or foreign laws or governmental regulations relating to the ADRs or to the withdrawal of deposited securities. |
• | to receive a dividend, distribution or rights, | |
• | to give instructions for the exercise of voting rights at a meeting of holders of ordinary shares or other deposited securities, or | |
• | for the determination of the registered holders who shall be responsible for the fee assessed by the depositary for administration of the ADR program and for any expenses as provided for in the ADR, | |
• | to receive any notice or to act in respect of other matters, |
all subject to the provisions of the deposit agreement. |
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How do you vote? |
Will you be able to view our reports? |
What fees and expenses will you be responsible for paying? |
• | to the extent not prohibited by the rules of any stock exchange or interdealer quotation system upon which the ADSs are traded, a fee of US$1.50 per ADR or ADRs for transfers of certificated or direct registration ADRs; | |
• | a fee of US$0.02 or less per ADS (or portion thereof) for any cash distribution made pursuant to the deposit agreement; | |
• | a fee of US$0.04 per ADS (or portion thereof) per calendar year for services performed by the depositary in administering our ADR program (which fee may be charged on a periodic basis during each calendar year (with the aggregate of such fees not to exceed the amount set forth above) and |
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shall be assessed against holders of ADRs as of the record date or record dates set by the depositary during each calendar year and shall be payable in the manner described in the next succeeding provision); | ||
• | any other charge payable by any of the depositary, any of the depositary’s agents, including, without limitation, the custodian, or the agents of the depositary’s agents in connection with the servicing of our shares or other deposited securities (which charge shall be assessed against registered holders of our ADRs as of the record date or dates set by the depositary and shall be payable at the sole discretion of the depositary by billing such registered holders or by deducting such charge from one or more cash dividends or other cash distributions); | |
• | a fee for the distribution of securities (or the sale of securities in connection with a distribution), such fee being in an amount equal to the fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such securities (treating all such securities as if they were shares) but which securities or the net cash proceeds from the sale thereof are instead distributed by the depositary to those holders entitled thereto; | |
• | stock transfer or other taxes and other governmental charges; | |
• | cable, telex and facsimile transmission and delivery charges incurred at your request; | |
• | transfer or registration fees for the registration of transfer of deposited securities on any applicable register in connection with the deposit or withdrawal of deposited securities; | |
• | expenses of the depositary in connection with the conversion of foreign currency into U.S. dollars; and | |
• | such fees and expenses as are incurred by the depositary (including without limitation expenses incurred in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in delivery of deposited securities or otherwise in connection with the depositary’s or its custodian’s compliance with applicable laws, rules or regulations. |
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(1) amend the form of ADR; | |
(2) distribute additional or amended ADRs; | |
(3) distribute cash, securities or other property it has received in connection with such actions; | |
(4) sell any securities or property received and distribute the proceeds as cash; or | |
(5) none of the above. |
How may the deposit agreement be amended? |
How may the deposit agreement be terminated? |
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Limits on our obligations and the obligations of the depositary; limits on liability to ADR holders and holders of ADSs |
• | payment with respect thereto of (i) any stock transfer or other tax or other governmental charge, (ii) any stock transfer or registration fees in effect for the registration of transfers of shares or other deposited securities upon any applicable register and (iii) any applicable fees and expenses described in the deposit agreement; | |
• | the production of proof satisfactory to the depositary and/or its custodian of (i) the identity of any signatory and genuineness of any signature and (ii) such other information, including without limitation, information as to citizenship, residence, exchange control approval, beneficial ownership of any securities, payment of applicable taxes or governmental charges, or legal or beneficial ownership and the nature of such interest, information relating to the registration of the shares on the books maintained by or on our behalf for the transfer and registration of shares, compliance with applicable laws, regulations, provisions of or governing deposited securities and terms of the deposit agreement and the ADR, as it may deem necessary or proper; and | |
• | compliance with such regulations as the depositary may establish consistent with the deposit agreement. |
• | present or future law, rule or regulation of the United States, the Cayman Islands or any other country, or of any governmental or regulatory authority or securities exchange or market or automated quotation system, the provisions of or governing any deposited securities, any present or future provision of our charter, any act of God, war, terrorism or other circumstance beyond our, the depositary’s or our respective agents’ control shall prevent, delay or subject to any civil or criminal penalty any act which the deposit agreement or the ADRs provides shall be done or performed by us, the depositary or our respective agents (including, without limitation, voting); | |
• | it exercises or fails to exercise discretion under the deposit agreement or the ADR; | |
• | it performs its obligations without gross negligence or bad faith; | |
• | it takes any action or refrains from taking any action in reliance upon the advice of or information from legal counsel, accountants, any person presenting shares for deposit, any registered holder of ADRs, or any other person believed by it to be competent to give such advice or information; or | |
• | it relies upon any written notice, request, direction or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. |
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• | issue, register or transfer an ADR or ADRs; | |
• | effect asplit-up or combination of ADRs; | |
• | deliver distributions on any such ADRs; or | |
• | permit the withdrawal of deposited securities (unless the deposit agreement provides otherwise), until the following conditions have been met: |
• | the holder has paid all taxes, governmental charges, and fees and expenses as required in the deposit agreement; | |
• | the holder has provided the depositary with any information it may deem necessary or proper, including, without limitation, proof of identity and the genuineness of any signature; and | |
• | the holder has complied with such regulations as the depositary may establish under the deposit agreement. |
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• | the depositary has received collateral for the full market value of the pre-released ADSs (marked to market daily); and | |
• | each recipient of pre-released ADSs agrees in writing that he or she |
• | owns the underlying shares, | |
• | assigns all rights in such shares to the depositary, | |
• | holds such shares for the account of the depositary and | |
• | will deliver such shares to the custodian as soon as practicable, and promptly if the depositary so demands. |
• | be a party to and bound by the terms of the deposit agreement and the applicable ADR or ADRs, and | |
• | appoint the depositary itsattorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the deposit agreement and the applicable ADR or ADRs, to adopt any and all procedures necessary to comply with applicable laws and to take such action as the depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the deposit agreement and the applicable ADR and ADRs, the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof. |
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Lock-up Agreements |
Rule 144 |
• | 1.0% of the number of our ordinary shares then outstanding which will equal approximately 1.3 million ordinary shares immediately after this offering; or | |
• | the average weekly reported trading volume of our ADSs on the NYSE during the four calendar weeks proceeding the date on which a notice of the sale on Form 144 is filed with the SEC by such person. |
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Rule 144(k) |
Registration Rights |
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(a) | no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income or gains or appreciations shall apply to us or our operations: |
(b) | the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not be payable on our ordinary shares, debentures or other obligations. |
• | banks; | |
• | certain financial institutions; | |
• | regulated investment companies; | |
• | real estate investment trusts; | |
• | insurance companies; | |
• | dealers in securities or currencies; | |
• | U.S. expatriates; | |
• | traders in securities that elect to mark to market; |
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• | tax-exempt entities; | |
• | persons liable for alternative minimum tax; | |
• | persons holding an ADS or ordinary share as part of a hedging, conversion or integrated transaction,a constructive sale or a straddle; | |
• | persons that actually or constructively own 10.0% or more of our voting stock; or | |
• | partnerships or other pass-through entities for U.S. federal income tax purposes; or | |
• | persons whose “functional currency” is not the U.S. dollar. |
• | an individual citizen or resident of the United States; | |
• | a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia; | |
• | an estate whose income is subject to U.S. federal income taxation regardless of its source; or | |
• | a trust that (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. |
Taxation of Dividends and Other Distributions on the ADSs or Ordinary Shares |
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Taxation of Disposition of Shares |
Passive Foreign Investment Company |
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Information Reporting and Backup Withholding |
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Underwriters | Number of ADSs | ||||
Goldman Sachs (Asia) L.L.C. | |||||
UBS AG | |||||
Piper Jaffray & Co. | |||||
CIBC World Markets Corp. | |||||
Total | 29,000,000 | ||||
No exercise | Full exercise | |||||||
Per ADS | US$ | US$ | ||||||
Total | US$ | US$ |
No exercise | Full exercise | |||||||
Per ADS | US$ | US$ | ||||||
Total | US$ | US$ |
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SEC registration fee | US$ | 13,310 | |||
New York Stock Exchange listing fee | 150,000 | ||||
National Association of Securities Dealers, Inc. filing fee | 43,855 | ||||
Printing and engraving expenses | 500,000 | ||||
Legal fees and expenses | 6,200,000 | ||||
Accounting fees and expenses | 2,300,000 | ||||
Miscellaneous | 750,000 | ||||
Total | US$ | 9,957,165 | |||
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Page | ||||
Yingli Green Energy Holding Company Limited and Subsidiary | ||||
Baoding Tianwei Yingli New Energy Resources Co., Ltd and Subsidiary | ||||
F-2 | ||||
F-3 | ||||
F-6 | ||||
F-9 | ||||
F-10 | ||||
F-11 | ||||
F-14 | ||||
F-56 | ||||
F-57 | ||||
F-58 | ||||
F-59 | ||||
F-62 |
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which is as of April 26, 2007 and as to paragraphs (f) and (g) of Note 25, which are as of June 3, 2007
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Table of Contents
Predecessor | |||||||||||||||||||||||||
December 31, | December 31, | September 4, | |||||||||||||||||||||||
2004 | 2005 | 2006 | December 31, 2006 | ||||||||||||||||||||||
Note | RMB | RMB | RMB | RMB | US$ | ||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||
Current assets | |||||||||||||||||||||||||
Cash | 21,739,108 | 14,864,672 | 86,970,169 | 78,454,551 | 10,158,296 | ||||||||||||||||||||
Restricted cash | (2) | 726,733 | 14,870,469 | 8,862,462 | 321,780,307 | 41,664,117 | |||||||||||||||||||
Accounts receivable, net | (2)(3) | 6,120,258 | 40,505,351 | 54,117,585 | 281,920,557 | 36,503,076 | |||||||||||||||||||
Inventories | (2)(4) | 17,498,939 | 106,566,171 | 659,668,151 | 811,745,634 | 105,104,831 | |||||||||||||||||||
Prepayments to suppliers | (2) | 12,616,525 | 123,451,683 | 349,735,412 | 134,823,298 | 17,456,922 | |||||||||||||||||||
Prepaid expenses and other current assets | (5) | 1,984,971 | 5,119,476 | 30,396,933 | 80,413,387 | 10,411,926 | |||||||||||||||||||
Deferred income taxes | (15) | 452,709 | 4,024,586 | 5,411,959 | 3,589,705 | 464,795 | |||||||||||||||||||
Due from related parties | (20) | 1,297,803 | 25,969,927 | 77,183,920 | 13,157,752 | 1,703,666 | |||||||||||||||||||
Total current assets | 62,437,046 | 335,372,335 | 1,272,346,591 | 1,725,885,191 | 223,467,629 | ||||||||||||||||||||
Prepayments to supplier | (2) | — | — | — | 226,273,660 | 29,297,915 | |||||||||||||||||||
Due from related parties, excluding current portion | (20) | 8,446,964 | — | — | — | — | |||||||||||||||||||
Property, plant and equipment, net | (6) | 120,979,568 | 341,814,231 | 409,309,747 | 583,498,389 | 75,551,377 | |||||||||||||||||||
Land use rights | (7) | 8,022,225 | 14,778,469 | 90,215,626 | 53,861,983 | 6,974,050 | |||||||||||||||||||
Intangible assets, net | (23) | 375,000 | 285,000 | — | 206,937,654 | 26,794,289 | |||||||||||||||||||
Goodwill | (23) | — | — | — | 3,984,994 | 515,977 | |||||||||||||||||||
Investment in and advances to an affiliate | (9) | 3,815,072 | 12,525,203 | 15,662,737 | 13,019,022 | 1,685,703 | |||||||||||||||||||
Total assets | 204,075,875 | 704,775,238 | 1,787,534,701 | 2,813,460,893 | 364,286,940 | ||||||||||||||||||||
F-3
Table of Contents
Predecessor | |||||||||||||||||||||||||
December 31, | December 31, | September 4, | |||||||||||||||||||||||
2004 | 2005 | 2006 | December 31, 2006 | ||||||||||||||||||||||
Note | RMB | RMB | RMB | RMB | US$ | ||||||||||||||||||||
LIABILITIES, MINORITY INTEREST, REDEEMABLE CONVERTIBLE PREFERRED SHARES AND OWNERS’/SHAREHOLDER’S EQUITY | |||||||||||||||||||||||||
Current liabilities | |||||||||||||||||||||||||
Short-term borrowings | (10) | 92,000,000 | 346,757,146 | 856,453,888 | 267,286,306 | 34,608,233 | |||||||||||||||||||
Borrowings from related parties | (20) | 8,100,000 | 100,350,000 | 21,800,000 | 31,849,352 | 4,123,854 | |||||||||||||||||||
Convertible loan | (11) | — | — | 85,635,000 | — | — | |||||||||||||||||||
Accounts payable | 14,514,442 | 32,800,661 | 131,690,224 | 123,224,685 | 15,955,133 | ||||||||||||||||||||
Other current liabilities and accrued expenses | (12) | 12,205,920 | 29,824,340 | 141,110,340 | 85,777,068 | 11,106,416 | |||||||||||||||||||
Advances from customers | (3) | 1,883,464 | 27,874,404 | 174,681,305 | 113,637,769 | 14,713,819 | |||||||||||||||||||
Dividends payable | (1) | — | 10,956,000 | 10,956,000 | 1,418,583 | ||||||||||||||||||||
Income taxes payable | (15) | 3,865,860 | 19,064,411 | 41,918,769 | 33,518,114 | 4,339,926 | |||||||||||||||||||
Other amounts due to related parties | (20) | — | 9,800,000 | 9,150,000 | 1,991,793 | 257,897 | |||||||||||||||||||
Total current liabilities | 132,569,686 | 566,470,962 | 1,473,395,526 | 668,241,087 | 86,523,861 | ||||||||||||||||||||
Deferred income taxes | (15) | 266,179 | 1,146,125 | 1,300,224 | 15,996,845 | 2,071,272 | |||||||||||||||||||
Mandatory convertible bonds payable to Yingli Power | (13) | — | — | — | 362,530,181 | 46,940,411 | |||||||||||||||||||
Mandatory redeemable bonds payable to Yingli Power | (13) | — | — | — | 293,109,511 | 37,951,822 | |||||||||||||||||||
Total liabilities | 132,835,865 | 567,617,087 | 1,474,695,750 | 1,339,877,624 | 173,487,366 | ||||||||||||||||||||
Minority interest | 605,554 | 569,349 | 983,052 | 387,715,972 | 50,201,467 | ||||||||||||||||||||
Series A redeemable convertible preferred shares — US$0.01 par value; 8,081,081 shares authorized, issued and outstanding as of December 31, 2006 (redemption value of US$23,133,600) | (17) | — | — | — | 134,501,664 | 17,415,277 |
F-4
Table of Contents
Predecessor | |||||||||||||||||||||||||
December 31, | December 31, | September 4, | |||||||||||||||||||||||
2004 | 2005 | 2006 | December 31, 2006 | ||||||||||||||||||||||
Note | RMB | RMB | RMB | RMB | US$ | ||||||||||||||||||||
Series B redeemable convertible preferred shares — US$0.01 par value; 24,405,377 shares authorized, 23,474,663 issued and outstanding as of December 31, 2006 (redemption value of US$154,360,000) | (17) | — | — | — | 882,835,869 | 114,309,596 | |||||||||||||||||||
Commitments and contingencies | (21) | ||||||||||||||||||||||||
Owners’ Equity — Predecessor | |||||||||||||||||||||||||
Registered capital | 75,000,000 | 75,000,000 | 100,000,000 | ||||||||||||||||||||||
Capital surplus | — | — | 7,466,400 | ||||||||||||||||||||||
Subscription receivable | (20) | (5,000,000 | ) | (5,000,000 | ) | — | |||||||||||||||||||
Statutory reserves | (2) | 1,655,719 | 14,376,864 | 14,376,864 | |||||||||||||||||||||
Retained earnings (Accumulated deficit) | (1,021,263 | ) | 52,211,938 | 190,012,635 | |||||||||||||||||||||
Total owners’ equity | 70,634,456 | 136,588,802 | 311,855,899 | ||||||||||||||||||||||
Total liabilities, minority interest and owners’ equity | 204,075,875 | 704,775,238 | 1,787,534,701 | ||||||||||||||||||||||
Shareholder’s Equity | |||||||||||||||||||||||||
Ordinary shares — US$0.01 par value; 967,513,542 shares authorized and 59,800,000 shares issued and outstanding as of December 31, 2006 | (18) | 4,744,652 | 614,337 | ||||||||||||||||||||||
Additional paid-in capital | 35,342,380 | 4,576,132 | |||||||||||||||||||||||
Accumulated other comprehensive income | 5,394,953 | 698,538 | |||||||||||||||||||||||
Retained earnings | (2) | 23,047,779 | 2,984,227 | ||||||||||||||||||||||
Total shareholder’s equity | 68,529,764 | 8,873,234 | |||||||||||||||||||||||
Total liabilities, minority interest, redeemable convertible preferred shares and shareholder’s equity | 2,813,460,893 | 364,286,940 | |||||||||||||||||||||||
F-5
Table of Contents
Predecessor | |||||||||||||||||||||||||||||
Years Ended December 31 | August 7, 2006 (date of | ||||||||||||||||||||||||||||
From January 1, 2006 to | inception) to December 31, | ||||||||||||||||||||||||||||
Note | 2004 | 2005 | September 4, 2006 | 2006 | |||||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | US$ | ||||||||||||||||||||||||
Net revenues | |||||||||||||||||||||||||||||
Sales of PV modules | 108,784,493 | 334,013,005 | 856,498,709 | 110,899,460 | 674,085,932 | 87,280,652 | |||||||||||||||||||||||
Sales of PV systems | 8,794,592 | 8,091,583 | 905,380 | 117,229 | 14,322,384 | 1,854,462 | |||||||||||||||||||||||
Other revenues | 2,903,535 | 19,689,746 | 26,584,402 | 3,442,148 | 66,384,442 | 8,595,459 | |||||||||||||||||||||||
Total net revenues | 120,482,620 | 361,794,334 | 883,988,491 | 114,458,837 | 754,792,758 | 97,730,573 | |||||||||||||||||||||||
Cost of revenues | |||||||||||||||||||||||||||||
Cost of PV modules sales | 86,502,259 | 233,194,076 | 586,196,322 | 75,900,705 | 514,175,746 | 66,575,480 | |||||||||||||||||||||||
Cost of PV systems sales | 6,632,816 | 6,292,459 | 1,012,375 | 131,082 | 9,926,652 | 1,285,303 | |||||||||||||||||||||||
Cost of other revenues | 2,167,475 | 14,117,548 | 24,427,556 | 3,162,880 | 50,744,837 | 6,570,442 | |||||||||||||||||||||||
Total cost of revenues | 95,302,550 | 253,604,083 | 611,636,253 | 79,194,667 | 574,847,235 | 74,431,225 | |||||||||||||||||||||||
Gross profit | 25,180,070 | 108,190,251 | 272,352,238 | 35,264,170 | 179,945,523 | 23,299,348 | |||||||||||||||||||||||
Selling expenses | 1,026,813 | 3,546,457 | 9,589,913 | 1,241,702 | 5,869,385 | 759,968 | |||||||||||||||||||||||
General and administrative expenses | 7,458,727 | 19,178,256 | 24,465,607 | 3,167,807 | 22,317,341 | 2,889,650 | |||||||||||||||||||||||
Research and development expenses | 2,950,559 | 1,790,719 | 3,665,220 | 474,573 | 19,470,861 | 2,521,087 | |||||||||||||||||||||||
Total operating expenses | 11,436,099 | 24,515,432 | 37,720,740 | 4,884,082 | 47,657,587 | 6,170,705 | |||||||||||||||||||||||
F-6
Table of Contents
Predecessor | |||||||||||||||||||||||||||||
Years Ended December 31 | August 7, 2006 (date of | ||||||||||||||||||||||||||||
From January 1, 2006 to | inception) to December 31, | ||||||||||||||||||||||||||||
Note | 2004 | 2005 | September 4, 2006 | 2006 | |||||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | US$ | ||||||||||||||||||||||||
Income from operations | 13,743,971 | 83,674,819 | 234,631,498 | 30,380,088 | 132,287,936 | 17,128,643 | |||||||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||||
Equity in loss of an affiliate | (8) | (184,928 | ) | (370,859 | ) | (609,601 | ) | (78,931 | ) | (215,590 | ) | (27,915 | ) | ||||||||||||||||
Interest expense | (6) | (6,410,576 | ) | (5,278,418 | ) | (22,441,164 | ) | (2,905,682 | ) | (25,788,959 | ) | (3,339,155 | ) | ||||||||||||||||
Interest income | 86,520 | 275,139 | 518,291 | 67,108 | 588,012 | 76,136 | |||||||||||||||||||||||
Foreign currency exchange loss | (581 | ) | (1,811,610 | ) | (3,406,242 | ) | (441,040 | ) | (4,692,779 | ) | (607,621 | ) | |||||||||||||||||
Gain (loss) on debt extinguishment | (10)(11) | — | 2,164,688 | — | — | (3,908,381 | ) | (506,057 | ) | ||||||||||||||||||||
Income before income taxes and minority interest | 7,234,406 | 78,653,759 | 208,692,782 | 27,021,543 | 98,270,239 | 12,724,031 | |||||||||||||||||||||||
Income tax expense | (15) | (1,221,172 | ) | (12,735,618 | ) | (22,545,982 | ) | (2,919,254 | ) | (22,968,086 | ) | (2,973,908 | ) | ||||||||||||||||
Income before minority interest | 6,013,234 | 65,918,141 | 186,146,800 | 24,102,289 | 75,302,153 | 9,750,123 | |||||||||||||||||||||||
Minority interest | 75,695 | 36,205 | 76,297 | 9,879 | (45,285,471 | ) | (5,863,563 | ) | |||||||||||||||||||||
Net income | 6,088,929 | 65,954,346 | 186,223,097 | 24,112,168 | 30,016,682 | 3,886,560 | |||||||||||||||||||||||
F-7
Table of Contents
August 7, 2006 (date of inception) | |||||||||||||||||||||||||
Note | to December 31, 2006 | ||||||||||||||||||||||||
RMB | US$ | ||||||||||||||||||||||||
Accretion of Series A and Series B redeemable convertible preferred shares to redemption value | (17) | (6,968,903 | ) | (902,334 | ) | ||||||||||||||||||||
Net income applicable to ordinary shareholder | 23,047,779 | 2,984,227 | |||||||||||||||||||||||
Basic earnings per share applicable to ordinary shareholder | (19) | 0.36 | 0.05 | ||||||||||||||||||||||
Diluted earnings per share applicable to ordinary shareholder | (19) | 0.36 | 0.05 | ||||||||||||||||||||||
Pro forma basic earnings per share (unaudited) | (26) | 0.40 | 0.05 | ||||||||||||||||||||||
Pro forma diluted earnings per share (unaudited) | (26) | 0.40 | 0.05 | ||||||||||||||||||||||
F-8
Table of Contents
Predecessor | ||||||||||||||||||||||||||||
Registered | Subscription | Capital | Statutory | Retained | ||||||||||||||||||||||||
Note | Capital | Receivable | Surplus | Reserves | Earnings | Total | ||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | |||||||||||||||||||||||
Balance as of January 1, 2004 | 75,000,000 | (5,000,000 | ) | — | 379,930 | (5,834,403 | ) | 64,545,527 | ||||||||||||||||||||
Net income | — | — | — | — | 6,088,929 | 6,088,929 | ||||||||||||||||||||||
Appropriation to statutory reserves | — | — | — | 1,275,789 | (1,275,789 | ) | — | |||||||||||||||||||||
Balance as of December 31, 2004 | 75,000,000 | (5,000,000 | ) | 1,655,719 | (1,021,263 | ) | 70,634,456 | |||||||||||||||||||||
Net income | — | — | — | — | 65,954,346 | 65,954,346 | ||||||||||||||||||||||
Appropriation to statutory reserves | — | — | — | 12,721,145 | (12,721,145 | ) | — | |||||||||||||||||||||
Balance as of December 31, 2005 | 75,000,000 | (5,000,000 | ) | — | 14,376,864 | 52,211,938 | 136,588,802 | |||||||||||||||||||||
Net income | — | — | — | — | 186,223,097 | 186,223,097 | ||||||||||||||||||||||
Owner’s equity recapitalization | (1) | 25,000,000 | — | 7,466,400 | — | (43,422,400 | ) | (10,956,000 | ) | |||||||||||||||||||
Dividend declared | (20) | — | 5,000,000 | — | — | (5,000,000 | ) | — | ||||||||||||||||||||
Balance as of September 4, 2006 | 100,000,000 | — | 7,466,400 | 14,376,864 | 190,012,635 | 311,855,899 | ||||||||||||||||||||||
F-9
Table of Contents
Ordinary Share | Accumulated | |||||||||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||||||||||
Numbers of | Paid-In | Comprehensive | Retained | Comprehensive | ||||||||||||||||||||||||||||
Note | Shares | Amount | Capital | Income | Earnings | Total | Income | |||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | |||||||||||||||||||||||||||
Balance as of August 7, 2006 | — | — | — | — | — | — | ||||||||||||||||||||||||||
Issuance of ordinary shares to a shareholder | (18) | 59,800,000 | 4,744,652 | 15,868 | — | — | 4,760,520 | |||||||||||||||||||||||||
Shareholder’s contribution of Tianwei Yingli’s net assets | (1) | — | — | 157,608,156 | — | — | 157,608,156 | |||||||||||||||||||||||||
Cash paid to Yingli Group for transfer of Tianwei Yingli | (1) | — | — | (134,573,727 | ) | — | — | (134,573,727 | ) | |||||||||||||||||||||||
Net income | — | — | — | — | 30,016,682 | 30,016,682 | 30,016,682 | |||||||||||||||||||||||||
Foreign currency exchange translation adjustment | — | — | — | 5,394,953 | — | 5,394,953 | 5,394,953 | |||||||||||||||||||||||||
35,411,635 | ||||||||||||||||||||||||||||||||
Issuance of ordinary share warrants in connection with issuance of Series A redeemable convertible preferred shares | (17) | — | — | 1,671,432 | — | — | 1,671,432 | |||||||||||||||||||||||||
Issuance of ordinary share warrants in connection with issuance of Series B redeemable convertible preferred shares | (17) | — | — | 6,650,603 | — | — | 6,650,603 | |||||||||||||||||||||||||
Issuance of ordinary share warrant in connection with debt extinguishment | (11) | — | — | 3,908,381 | — | — | 3,908,381 | |||||||||||||||||||||||||
Accretion of Series A redeemable convertible preferred shares to redemption value | (17) | — | — | — | — | (3,750,249 | ) | (3,750,249 | ) | |||||||||||||||||||||||
Accretion of Series B redeemable convertible preferred shares to redemption value | (17) | — | — | — | — | (3,218,654 | ) | (3,218,654 | ) | |||||||||||||||||||||||
Share-based compensation expense | (16) | — | — | 61,667 | — | — | 61,667 | |||||||||||||||||||||||||
Balance as of December 31, 2006 | 59,800,000 | 4,744,652 | 35,342,380 | 5,394,953 | 23,047,779 | 68,529,764 | ||||||||||||||||||||||||||
Balance as of December 31, 2006 — US$ | 614,337 | 4,576,132 | 698,538 | 2,984,227 | 8,873,234 | |||||||||||||||||||||||||||
F-10
Table of Contents
Predecessor | ||||||||||||||||||||||||||
Years Ended December 31 | August 7, 2006 (date of | |||||||||||||||||||||||||
From January 1, 2006 to | inception) to December 31, | |||||||||||||||||||||||||
2004 | 2005 | September 4, 2006 | 2006 | |||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | US$ | |||||||||||||||||||||
Net income | 6,088,929 | 65,954,346 | 186,223,097 | 24,112,168 | 30,016,682 | 3,886,560 | ||||||||||||||||||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||||||||||||||||||||
Depreciation | 8,555,991 | 13,677,045 | 22,726,989 | 2,942,691 | 13,049,782 | 1,689,686 | ||||||||||||||||||||
Amortization of intangible assets | 75,000 | 90,000 | 285,000 | 36,902 | 2,245,291 | 290,720 | ||||||||||||||||||||
Loss (gain) on disposal of property, plant and equipment | — | (100,713 | ) | 82,322 | 10,659 | 919,608 | 119,071 | |||||||||||||||||||
Bad debt expense | 292,803 | 1,482,767 | 533,524 | 69,081 | — | — | ||||||||||||||||||||
Write-down of inventories to net realizable value | 723,582 | 557,234 | 1,736,729 | 224,872 | 4,941,887 | 639,876 | ||||||||||||||||||||
Minority interest | (75,695 | ) | (36,205 | ) | (76,297 | ) | (9,879 | ) | 45,285,471 | 5,863,563 | ||||||||||||||||
Equity in loss of an affiliate | 184,928 | 370,859 | 609,601 | 78,931 | 215,590 | 27,915 | ||||||||||||||||||||
Land use rights expense | 176,316 | 228,147 | 548,343 | 70,999 | 65,419 | 8,470 | ||||||||||||||||||||
(Gain) loss on debt extinguishment | — | (2,164,688 | ) | — | — | 3,908,381 | 506,057 | |||||||||||||||||||
Amortization of bond discount | — | — | — | — | 2,554,592 | 330,769 | ||||||||||||||||||||
Share-based compensation | — | — | — | — | 61,667 | 7,985 | ||||||||||||||||||||
Deferred income tax expense (benefit) | (269,063 | ) | (2,462,933 | ) | (1,233,274 | ) | (159,684 | ) | 1,359,703 | 176,054 | ||||||||||||||||
Changes in operating assets and liabilities, excluding the effects of shareholder’s contribution of Tianwei Yingli’s net assets in 2006: | ||||||||||||||||||||||||||
Restricted cash related to purchase of inventory and other operating activities | 3,208,976 | (14,143,736 | ) | 6,008,007 | 777,917 | (7,242,594 | ) | (937,771 | ) | |||||||||||||||||
Accounts receivable | (629,788 | ) | (35,867,860 | ) | (14,145,758 | ) | (1,831,593 | ) | (227,802,972 | ) | (29,495,931 | ) | ||||||||||||||
Inventories | (2,678,863 | ) | (77,586,851 | ) | (484,159,450 | ) | (62,688,970 | ) | (4,588,177 | ) | (594,077 | ) | ||||||||||||||
Prepayments to suppliers | (11,333,367 | ) | (122,872,772 | ) | (296,962,988 | ) | (38,450,770 | ) | (163,792,739 | ) | (21,207,885 | ) | ||||||||||||||
Prepaid expenses and other current assets | (554,792 | ) | (3,107,030 | ) | (25,277,457 | ) | (3,272,925 | ) | (44,882,575 | ) | (5,811,395 | ) | ||||||||||||||
Amounts due from related parties | 1,954,882 | (15,824,856 | ) | (213,993 | ) | (27,708 | ) | (954,979 | ) | (123,651 | ) | |||||||||||||||
Accounts payable | 4,378,313 | 12,711,008 | 92,335,922 | 11,955,656 | (38,134,667 | ) | (4,937,677 | ) | ||||||||||||||||||
Other current liabilities and accrued expenses | 3,911,188 | 11,156,394 | 35,300,500 | 4,570,709 | 3,380,154 | 437,662 | ||||||||||||||||||||
Advances from customers | 1,730,842 | 25,990,940 | 146,806,901 | 19,008,559 | (61,043,536 | ) | (7,903,918 | ) | ||||||||||||||||||
Income tax payable | 1,490,190 | 13,743,491 | 22,854,358 | 2,959,182 | (8,400,655 | ) | (1,087,717 | ) | ||||||||||||||||||
Amounts due to other related parties | — | 1,800,000 | (650,000 | ) | (84,162 | ) | 841,793 | 108,995 | ||||||||||||||||||
Net cash provided by (used in) operating activities | 17,230,372 | (126,405,413 | ) | (306,667,924 | ) | (39,707,365 | ) | (447,996,874 | ) | (58,006,639 | ) | |||||||||||||||
F-11
Table of Contents
Predecessor | ||||||||||||||||||||||||||
Years Ended December 31 | August 7, 2006 (date of | |||||||||||||||||||||||||
From January 1, 2006 to | inception) to December 31, | |||||||||||||||||||||||||
2004 | 2005 | September 4, 2006 | 2006 | |||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | US$ | |||||||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||||
Purchase of property, plant and equipment | (28,697,547 | ) | (226,452,362 | ) | (85,530,399 | ) | (11,074,477 | ) | (169,297,965 | ) | (21,920,701 | ) | ||||||||||||||
Purchase of intangible asset | (450,000 | ) | — | — | — | — | — | |||||||||||||||||||
Payment for land use right | — | — | — | — | (46,097,276 | ) | (5,968,676 | ) | ||||||||||||||||||
Proceeds from disposal of property, plant and equipment | — | 527,487 | 123,649 | 16,010 | — | — | ||||||||||||||||||||
Restricted cash related to issuance of Series B redeemable convertible preferred shares, mandatory redeemable bonds and mandatory convertible bonds | — | — | — | — | (305,675,251 | ) | (39,578,834 | ) | ||||||||||||||||||
Acquisition of minority interest in Chengdu Yingli | (100,000 | ) | — | — | — | — | — | |||||||||||||||||||
Advances paid to an affiliate | — | (1,080,990 | ) | (2,091,571 | ) | (270,817 | ) | (5,571,875 | ) | (721,446 | ) | |||||||||||||||
Loans made to Yingli Group | — | (400,304 | ) | (51,000,000 | ) | (6,603,480 | ) | (64,000,000 | ) | (8,286,721 | ) | |||||||||||||||
Cash received for repayment of loans to Yingli Group | — | — | — | — | 123,847,268 | 16,035,745 | ||||||||||||||||||||
Net cash used in investing activities | (29,247,547 | ) | (227,406,169 | ) | (138,498,321 | ) | (17,932,764 | ) | (466,795,099 | ) | (60,440,633 | ) | ||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||||
Proceeds from bank borrowings | 82,000,000 | 496,402,577 | 741,302,888 | 95,983,904 | 692,441,818 | 89,657,374 | ||||||||||||||||||||
Repayment of bank borrowings | (53,000,000 | ) | (309,430,940 | ) | (185,890,637 | ) | (24,069,121 | ) | (1,271,609,400 | ) | (164,647,996 | ) | ||||||||||||||
Proceeds from (repayment of) convertible loan | — | — | 85,635,000 | 11,088,021 | (85,635,000 | ) | (11,088,021 | ) | ||||||||||||||||||
Proceeds from issuance of ordinary shares | — | — | — | — | 4,760,520 | 616,392 | ||||||||||||||||||||
Cash paid to Yingli Group for transfer of Tianwei Yingli | — | — | — | — | (134,573,727 | ) | (17,424,607 | ) | ||||||||||||||||||
Cash assumed from the transfer of Tianwei Yingli | — | — | — | — | 86,970,169 | 11,260,898 | ||||||||||||||||||||
Contribution from minority interest shareholder of Yingli Guangfu | — | — | 490,000 | 63,445 | — | — | ||||||||||||||||||||
Proceeds from issuance of Series A redeemable convertible preferred shares | — | — | — | — | 134,187,052 | 17,374,541 | ||||||||||||||||||||
Proceeds from issuance of Series B redeemable convertible preferred shares | — | — | — | — | 887,547,301 | 114,919,632 | ||||||||||||||||||||
Proceeds from over-subscription of Series B redeemable convertible preferred shares | — | — | — | — | 23,672,074 | 3,065,060 | ||||||||||||||||||||
Proceeds from borrowings from related parties | — | 100,250,000 | 20,900,000 | 2,706,132 | 20,322,449 | 2,631,351 | ||||||||||||||||||||
Repayment of borrowing from related parties | — | (8,000,000 | ) | (99,450,000 | ) | (12,876,787 | ) | (10,273,097 | ) | (1,330,161 | ) |
F-12
Table of Contents
Predecessor | ||||||||||||||||||||||||||
Years Ended December 31 | August 7, 2006 (date of | |||||||||||||||||||||||||
From January 1, 2006 to | inception) to December 31, | |||||||||||||||||||||||||
2004 | 2005 | September 4, 2006 | 2006 | |||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | US$ | |||||||||||||||||||||
Proceeds from issuance of mandatory redeemable bonds and mandatory convertible bonds | — | — | — | — | 653,140,570 | 84,568,646 | ||||||||||||||||||||
Proceeds from borrowings from third party non-financial services companies | — | 67,715,509 | 5,000,000 | 647,400 | — | — | ||||||||||||||||||||
Repayment of borrowings from third party non-financial services companies | — | — | (50,715,509 | ) | (6,566,645 | ) | (10,000,000 | ) | (1,294,800 | ) | ||||||||||||||||
Net cash provided by financing activities | 29,000,000 | 346,937,146 | 517,271,742 | 66,976,349 | 990,950,729 | 128,308,309 | ||||||||||||||||||||
Effect of foreign currency exchange rate changes on cash | — | — | — | — | 2,295,795 | 297,259 | ||||||||||||||||||||
Net increase (decrease) in cash | 16,982,825 | (6,874,436 | ) | 72,105,497 | 9,336,220 | 78,454,551 | 10,158,296 | |||||||||||||||||||
Cash at beginning of period | 4,756,283 | 21,739,108 | 14,864,672 | 1,924,678 | — | — | ||||||||||||||||||||
Cash at end of period | 21,739,108 | 14,864,672 | 86,970,169 | 11,260,898 | 78,454,551 | 10,158,296 | ||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||
Years Ended December 31 | August 7, 2006 (date of | ||||||||||||||||||||||||
From January 1, 2006 to | inception) to December 31, | ||||||||||||||||||||||||
2004 | 2005 | September 4, 2006 | 2006 | ||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | US$ | ||||||||||||||||||||
Interest paid | 5,542,426 | 4,476,888 | 16,652,352 | 2,156,147 | 23,533,513 | 3,047,119 | |||||||||||||||||||
Income tax paid | 45 | — | 924,898 | 119,756 | 30,009,037 | 3,885,570 | |||||||||||||||||||
Non-cash investing transactions: | |||||||||||||||||||||||||
Payable for purchase of additional investment in an affiliate | — | 8,000,000 | — | — | — | — | |||||||||||||||||||
Advances to an affiliate by transferring of property, plant and equipment | — | — | 1,655,564 | 214,362 | — | — | |||||||||||||||||||
Payables for purchase property, plant and equipment | (6,246,224 | ) | 5,403,700 | 6,553,641 | 848,565 | 29,669,128 | 3,841,559 | ||||||||||||||||||
Payables for purchase of land use right (note 7) | — | — | 75,985,500 | 9,838,603 | (36,288,244 | ) | (4,698,602 | ) | |||||||||||||||||
Payables for purchase of Baoding Rectifier’s assets (note 22) | — | 8,387,637 | — | — | — | — | |||||||||||||||||||
Offset of advances to Tibetan Yingli with amount payable to Tibetan Yingli | — | — | — | — | 8,000,000 | 1,035,840 | |||||||||||||||||||
Non-cash financing transaction: | |||||||||||||||||||||||||
Settlement of subscription receivable through profit appropriation (note 20) | — | — | 5,000,000 | 647,400 | — | — |
F-13
Table of Contents
(1) | Organization and Description of Business |
(a) | Organization |
(b) | Description of Business |
F-14
Table of Contents
(2) | Summary of Significant Accounting Policies and Significant Concentrations and Risks |
(a) | Basis of Presentation |
(b) | Principles of Consolidation |
(c) | Significant Concentrations and Risks |
Revenue concentrations |
F-15
Table of Contents
Predecessor | ||||||||||||||||||||||||||||||||||||||||||
% | % | % | August 7, 2006 | % | ||||||||||||||||||||||||||||||||||||||
Year Ended | of | Year Ended | of | January 1, 2006 | of | (date of inception) | of | |||||||||||||||||||||||||||||||||||
December 31, | Net | December 31, | Net | to September 4, | Net | to December 31, | Net | |||||||||||||||||||||||||||||||||||
2004 | Sales | 2005 | Sales | 2006 | Sales | 2006 | Sales | |||||||||||||||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | US$ | |||||||||||||||||||||||||||||||||||||
Germany | 80,462,529 | 67 | % | 238,983,858 | 66 | % | 602,785,544 | 78,048,677 | 68 | % | 406,889,138 | 52,684,009 | 54 | % | ||||||||||||||||||||||||||||
Spain | — | — | 28,500,778 | 8 | % | 78,595,263 | 10,176,515 | 9 | % | 157,473,909 | 20,389,723 | 20 | % | |||||||||||||||||||||||||||||
PRC | 28,791,109 | 24 | % | 57,292,144 | 16 | % | 30,940,554 | 4,006,184 | 4 | % | 50,027,539 | 6,477,566 | 7 | % | ||||||||||||||||||||||||||||
Total | 109,253,638 | 91 | % | 324,776,780 | 90 | % | 712,321,361 | 92,231,376 | 81 | % | 614,390,586 | 79,551,298 | 81 | % | ||||||||||||||||||||||||||||
F-16
Table of Contents
Predecessor | |||||||||||||||||||||||||||||||||||||||||||||
% | % | % | August 7, 2006 | % | |||||||||||||||||||||||||||||||||||||||||
Year Ended | of | Year Ended | of | of | (date of inception) | of | |||||||||||||||||||||||||||||||||||||||
December 31, | Net | December 31, | Net | January 1, 2006 to | Net | to December 31, | Net | ||||||||||||||||||||||||||||||||||||||
Location | 2004 | Sales | 2005 | Sales | September 4, 2006 | Sales | 2006 | Sales | |||||||||||||||||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | US$ | ||||||||||||||||||||||||||||||||||||||||
Customer A | Germany | 22,237,249 | 18 | % | 42,995,053 | 12 | % | 49,760,844 | 6,443,034 | 6 | % | 4,568,154 | 591,485 | 1 | % | ||||||||||||||||||||||||||||||
Customer B | Germany | — | — | 50,185,979 | 14 | % | 78,070,856 | 10,108,615 | 9 | % | 218,830,766 | 28,334,209 | 29 | % | |||||||||||||||||||||||||||||||
Customer C | Germany | 20,030,279 | 17 | % | 33,214,730 | 9 | % | 60,539,442 | 7,838,647 | 7 | % | 95,745,228 | 12,397,093 | 13 | % | ||||||||||||||||||||||||||||||
Customer D | Germany | — | — | 46,953,165 | 13 | % | 13,437,430 | 1,739,879 | 2 | % | — | — | — | ||||||||||||||||||||||||||||||||
Customer E | Spain | — | — | 7,001,214 | 2 | % | 55,804,873 | 7,225,616 | 6 | % | 128,680,752 | 16,661,585 | 17 | % | |||||||||||||||||||||||||||||||
Total | 42,267,528 | 35 | % | 180,350,141 | 50 | % | 257,613,445 | 33,355,791 | 30 | % | 447,824,900 | 57,984,372 | 60 | % | |||||||||||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||
December 31, | December 31, | September 4, | |||||||||||||||||||||
Location | 2004 | 2005 | 2006 | December 31, 2006 | |||||||||||||||||||
RMB | RMB | RMB | RMB | US$ | |||||||||||||||||||
Customer A | Germany | — | 296,264 | 698,978 | 694,834 | 89,967 | |||||||||||||||||
Customer B | Germany | — | 9,204,966 | — | 104,778,937 | 13,566,778 | |||||||||||||||||
Customer C | Germany | — | 400,115 | — | 71,659,580 | 9,278,483 | |||||||||||||||||
Customer D | Germany | — | 1,336,432 | 104,866 | 97,344 | 12,604 | |||||||||||||||||
Customer E | Spain | — | 1,348,784 | — | — | — | |||||||||||||||||
Total | — | 12,586,561 | 803,844 | 177,230,695 | 22,947,832 | ||||||||||||||||||
Dependence on suppliers |
F-17
Table of Contents
Predecessor | |||||||||||||||||||||||
Location | December 31, 2004 | December 31, 2005 | September 4, 2006 | December 31, 2006 | |||||||||||||||||||
RMB | RMB | RMB | RMB | US$ | |||||||||||||||||||
Supplier A | USA | 2,536,495 | 47,802,302 | 50,404,222 | 11,330,841 | 1,467,117 | |||||||||||||||||
Supplier B | Korea | — | 38,365,549 | 194,549 | 188,229 | 24,372 | |||||||||||||||||
Supplier C | Korea | — | 16,085,220 | 271,798 | 262,583 | 33,999 | |||||||||||||||||
Supplier D | USA | — | 13,065,499 | 32,111,753 | 16,817,547 | 2,177,536 | |||||||||||||||||
Supplier E | Korea | — | — | 24,749,334 | 24,050,888 | 3,114,110 | |||||||||||||||||
Supplier F | Netherlands | — | — | 125,742,680 | — | — | |||||||||||||||||
Supplier G | Germany | — | — | — | 226,273,660 | 29,297,915 |
(d) Use of Estimates |
F-18
Table of Contents
(e) Foreign Currency |
(f) Cash and Restricted Cash |
(g) Accounts Receivable |
F-19
Table of Contents
(h) Inventories |
(i) Prepayments to Suppliers |
(j) Property, Plant and Equipment |
Buildings | 30 years | |||
Machinery | 8-10 years | |||
Electronic equipment | 4-5 years | |||
Furniture and fixtures | 4-5 years | |||
Motor vehicles | 8-10 years |
F-20
Table of Contents
(k) | Land Use Rights |
(l) | Goodwill and Other Intangible Assets |
Technical know-how | 6 years | |
Customer relationships | 6 years | |
Order backlog | 1.5 years | |
Short-term supply agreements | 0.5 years | |
Long-term supply agreements | 5 and 9 years starting from 2009 |
(m) | Impairment of Long-Lived Assets |
F-21
Table of Contents
(n) | Investment in and Advances to An Affiliate |
(o) | Statutory Reserves |
F-22
Table of Contents
(p) | Share-based Payment |
(q) | Revenue Recognition |
F-23
Table of Contents
(r) | Research and Development and Government Grant |
(s) | Warranty Cost |
F-24
Table of Contents
Predecessor | |||||||||||||||||||||||||
Year Ended | Year Ended | August 7, 2006 (date of | |||||||||||||||||||||||
December 31, | December 31, | January 1 to | inception) to | ||||||||||||||||||||||
2004 | 2005 | September 4, 2006 | December 31, 2006 | ||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | US$ | ||||||||||||||||||||
Beginning balance | 270,597 | 1,464,005 | 5,013,862 | 649,195 | — | — | |||||||||||||||||||
Transfer of Tianwei Yingli to the Company | — | — | — | — | 13,672,952 | 1,770,374 | |||||||||||||||||||
Product warranty expense | 1,193,408 | 3,549,857 | 8,659,090 | 1,121,179 | 7,013,249 | 908,075 | |||||||||||||||||||
Warranty costs incurred or claimed | — | — | — | — | — | — | |||||||||||||||||||
Ending Balance | 1,464,005 | 5,013,862 | 13,672,952 | 1,770,374 | 20,686,201 | 2,678,449 | |||||||||||||||||||
(t) | Income Taxes |
(u) | Commitments and Contingencies |
(v) | Segment Reporting |
F-25
Table of Contents
(w) | Earnings Per Share |
(x) | Recently Issued Accounting Standards |
F-26
Table of Contents
(3) | Accounts Receivable, Net |
Predecessor | ||||||||||||||||||||||
December 31, | December 31, | September 4, | December 31, | |||||||||||||||||||
2004 | 2005 | 2006 | 2006 | |||||||||||||||||||
RMB | RMB | RMB | RMB | US$ | ||||||||||||||||||
Accounts receivable | 6,413,061 | 42,280,921 | 56,426,679 | 284,229,651 | 36,802,058 | |||||||||||||||||
Less: Allowance for doubtful accounts | (292,803 | ) | (1,775,570 | ) | (2,309,094 | ) | (2,309,094 | ) | (298,982 | ) | ||||||||||||
Total accounts receivable, net | 6,120,258 | 40,505,351 | 54,117,585 | 281,920,557 | 36,503,076 | |||||||||||||||||
Predecessor | |||||||||||||||||||||||||
August 7, 2006 | |||||||||||||||||||||||||
Year Ended | Year Ended | January 1, 2006 | (date of inception) | ||||||||||||||||||||||
December 31, | December 31, | to September 4, | to December 31, | ||||||||||||||||||||||
2004 | 2005 | 2006 | 2006 | ||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | US$ | ||||||||||||||||||||
Beginning balance | — | (292,803 | ) | (1,775,570 | ) | (229,901 | ) | — | — | ||||||||||||||||
Transfer of Tianwei Yingli to the Company | — | — | — | — | (2,309,094 | ) | (298,982 | ) | |||||||||||||||||
Bad debt expense | (292,803 | ) | (1,482,767 | ) | (533,524 | ) | (69,081 | ) | — | — | |||||||||||||||
Write-off of accounts receivable | — | — | — | — | — | — | |||||||||||||||||||
Ending balance | (292,803 | ) | (1,775,570 | ) | (2,309,094 | ) | (298,982 | ) | (2,309,094 | ) | (298,982 | ) | |||||||||||||
F-27
Table of Contents
(4) | Inventories |
Predecessor | ||||||||||||||||||||||
December 31, | December 31, | September 4, | ||||||||||||||||||||
2004 | 2005 | 2006 | December 31, 2006 | |||||||||||||||||||
RMB | RMB | RMB | RMB | US$ | ||||||||||||||||||
Raw materials | 2,498,465 | 49,935,500 | 357,026,540 | 489,352,191 | 63,361,326 | |||||||||||||||||
Work-in-progress | 6,885,867 | 26,589,836 | 198,961,518 | 187,655,590 | 24,297,647 | |||||||||||||||||
Finished goods | 8,114,607 | 30,040,835 | 103,680,093 | 134,737,853 | 17,445,858 | |||||||||||||||||
Total inventories | 17,498,939 | 106,566,171 | 659,668,151 | 811,745,634 | 105,104,831 | |||||||||||||||||
(5) | Prepaid Expenses and Other Current Assets |
Predecessor | ||||||||||||||||||||||
December 31, | December 31, | September 4, | ||||||||||||||||||||
2004 | 2005 | 2006 | December 31, 2006 | |||||||||||||||||||
RMB | RMB | RMB | RMB | US$ | ||||||||||||||||||
Advances to employees | 117,831 | 794,752 | 2,186,275 | 924,524 | 119,707 | |||||||||||||||||
Advances to third parties, net | 66,482 | 87,596 | 7,352,573 | 6,866,851 | 889,120 | |||||||||||||||||
Value added tax refund receivable | 1,711,614 | 4,084,698 | 20,851,419 | 43,210,503 | 5,594,896 | |||||||||||||||||
Deferred offering costs | — | — | — | 27,387,161 | 3,546,090 | |||||||||||||||||
Prepaid expenses | 89,044 | 152,430 | 6,666 | 2,024,348 | 262,113 | |||||||||||||||||
Total prepaid expenses and other current assets | 1,984,971 | 5,119,476 | 30,396,933 | 80,413,387 | 10,411,926 | |||||||||||||||||
F-28
Table of Contents
(6) | Property, Plant and Equipment, Net |
Predecessor | ||||||||||||||||||||||
December 31, | December 31, | September 4, | ||||||||||||||||||||
2004 | 2005 | 2006 | December 31, 2006 | |||||||||||||||||||
RMB | RMB | RMB | RMB | US$ | ||||||||||||||||||
Buildings | 36,105,188 | 55,292,572 | 67,681,732 | 75,681,746 | 9,799,273 | |||||||||||||||||
Machinery | 69,020,360 | 241,408,040 | 348,616,857 | 299,419,031 | 38,768,779 | |||||||||||||||||
Electronic equipment | 1,321,952 | 1,708,509 | 2,278,122 | 1,595,180 | 206,544 | |||||||||||||||||
Furniture and fixtures | 627,994 | 743,162 | 1,145,009 | 4,467,399 | 578,439 | |||||||||||||||||
Motor vehicles | 3,632,934 | 5,798,524 | 5,975,495 | 2,667,142 | 345,342 | |||||||||||||||||
Construction in progress | 20,530,717 | 60,763,041 | 29,092,765 | 211,749,834 | 27,417,370 | |||||||||||||||||
Total | 131,239,145 | 365,713,848 | 454,789,980 | 595,580,332 | 77,115,747 | |||||||||||||||||
Less: Accumulated depreciation | (10,259,577 | ) | (23,899,617 | ) | (45,480,233 | ) | (12,081,943 | ) | (1,564,370 | ) | ||||||||||||
Total property, plant and equipment, net | 120,979,568 | 341,814,231 | 409,309,747 | 583,498,389 | 75,551,377 | |||||||||||||||||
Predecessor | ||||||||||||||||||||||||||
Year Ended | Year Ended | August 7, 2006 | ||||||||||||||||||||||||
December 31, | December 31, | January 1, 2006 to | (date of inception) | |||||||||||||||||||||||
2004 | 2005 | September 4, 2006 | to December 31, 2006 | |||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | US$ | |||||||||||||||||||||
Cost of revenues | 7,278,509 | 11,815,062 | 21,138,031 | 2,736,952 | 12,140,708 | 1,571,979 | ||||||||||||||||||||
Selling expenses | 48,379 | 64,481 | 64,564 | 8,360 | 34,732 | 4,497 | ||||||||||||||||||||
General and administrative expenses | 1,229,103 | 1,797,502 | 1,524,394 | 197,379 | 874,342 | 113,210 | ||||||||||||||||||||
Total depreciation expense | 8,555,991 | 13,677,045 | 22,726,989 | 2,942,691 | 13,049,782 | 1,689,686 | ||||||||||||||||||||
Predecessor | ||||||||||||||||||||||||||
Year Ended | Year Ended | August 7, 2006 | ||||||||||||||||||||||||
December 31, | December 31, | January 1, 2006 to | (date of inception) | |||||||||||||||||||||||
2004 | 2005 | September 4, 2006 | to December 31, 2006 | |||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | US$ | |||||||||||||||||||||
Interest cost capitalized | 185,938 | 5,486,727 | 1,384,469 | 179,261 | 895,922 | 116,004 | ||||||||||||||||||||
Interest cost charged to income | 6,410,576 | 5,278,418 | 22,441,164 | 2,905,682 | 25,788,959 | 3,339,155 | ||||||||||||||||||||
Total interest cost incurred | 6,596,514 | 10,765,145 | 23,825,633 | 3,084,943 | 26,684,881 | 3,455,159 | ||||||||||||||||||||
F-29
Table of Contents
(7) | Land Use Rights |
(8) | Fair Value of Financial Instruments |
(9) | Investment in and Advances to an Affiliate |
F-30
Table of Contents
(10) | Short-term Borrowings |
Predecessor | ||||||||||||||||||||||
December 31, | December 31, | September 4, | ||||||||||||||||||||
2004 | 2005 | 2006 | December 31, 2006 | |||||||||||||||||||
RMB | RMB | RMB | RMB | US$ | ||||||||||||||||||
Borrowings from banks: | ||||||||||||||||||||||
— Guaranteed by Tianwei Baobian and its parent company | 80,000,000 | 222,000,000 | 462,000,000 | 220,000,000 | 28,485,602 | |||||||||||||||||
— Entrusted loans by related parties | — | — | 310,000,000 | 1,000,000 | 129,480 | |||||||||||||||||
— Partially secured by accounts receivables | — | 56,971,637 | 62,383,888 | 34,286,306 | 4,439,391 | |||||||||||||||||
— Secured by property, plant and equipment | — | 70,000 | 70,000 | — | — | |||||||||||||||||
— Secured by land use right and property, plant and equipment | 12,000,000 | — | — | — | — | |||||||||||||||||
Borrowings from other parties: | ||||||||||||||||||||||
— Customer loan | — | 30,000,000 | — | — | — | |||||||||||||||||
— Governmental loan guaranteed by Tianwei Baobian | — | 12,000,000 | 12,000,000 | 12,000,000 | 1,553,760 | |||||||||||||||||
— Other third parties loan | — | 25,715,509 | 10,000,000 | — | — | |||||||||||||||||
Total short-term borrowings | 92,000,000 | 346,757,146 | 856,453,888 | 267,286,306 | 34,608,233 | |||||||||||||||||
F-31
Table of Contents
(11) | Convertible Loan |
F-32
Table of Contents
(12) | Other Current Liabilities and Accrued Expenses |
Predecessor | ||||||||||||||||||||||
December 31, | December 31, | September 4, | ||||||||||||||||||||
2004 | 2005 | 2006 | December 31, 2006 | |||||||||||||||||||
RMB | RMB | RMB | RMB | US$ | ||||||||||||||||||
Accrued warranty | 1,464,005 | 5,013,862 | 13,672,952 | 20,686,201 | 2,678,449 | |||||||||||||||||
Other non-income taxes payable | 717,734 | 4,281,283 | 16,246,451 | 4,337,217 | 561,583 | |||||||||||||||||
Accrued social insurance | 624,670 | 4,703,832 | 2,403,149 | 2,957,351 | 382,918 | |||||||||||||||||
Accrued interest | 383,623 | 311,405 | 7,484,688 | 7,681,432 | 994,592 | |||||||||||||||||
Accrued interest for late tax payments | 614,007 | 1,361,455 | 2,857,460 | 1,361,455 | 176,281 | |||||||||||||||||
Accrued payroll and welfare | 1,368,180 | 5,295,425 | 12,076,952 | 7,700,249 | 997,028 | |||||||||||||||||
Land use rights payable (note 7) | 6,400,000 | 6,400,000 | 82,385,500 | — | — | |||||||||||||||||
Payable for net asset purchase of Baoding Rectifier (note 22) | — | 1,000,000 | — | — | — | |||||||||||||||||
Over-subscription of Series B preferred shares | — | — | — | 23,672,074 | 3,065,060 | |||||||||||||||||
Accrued professional fees | — | — | — | 2,938,106 | 380,426 | |||||||||||||||||
Accrued offering costs | — | — | 3,346,000 | 12,866,681 | 1,665,978 | |||||||||||||||||
Other accrued expenses | 633,701 | 1,457,078 | 637,188 | 1,576,302 | 204,101 | |||||||||||||||||
Total other current liabilities and accrued expenses | 12,205,920 | 29,824,340 | 141,110,340 | 85,777,068 | 11,106,416 | |||||||||||||||||
(13) | Mandatory Convertible and Redeemable Bonds Payable to Yingli Power |
F-33
Table of Contents
(“SFAS No. 133”), since the terms of conversion do not require or permit net settlement, provide for a means for the conversion feature to be settled outside the contract, or provide for delivery of an asset which would put the holders of the Mandatory Convertible Bond in a position substantially similar to a net settlement provision. The Company has also determined that the non-detachable convertible feature had no intrinsic value on the commitment date based on the conversion price paid by Deutsche Bank, an unrelated third-party investor. Therefore, no beneficial conversion feature was recognized. Since the ultimate number of shares to be issued upon conversion is contingent, the Company will determine whether the conversion feature has intrinsic value when the number of shares to be issued is known and the conversion contingency is resolved.
F-34
Table of Contents
(14) | Employee Benefit Plans |
(15) | Income Taxes |
F-35
Table of Contents
Predecessor | ||||||||||||||||||||||||||
Year Ended | Year Ended | August 7, 2006 | ||||||||||||||||||||||||
December 31, | December 31, | January 1, 2006 | (date of inception) | |||||||||||||||||||||||
2004 | 2005 | to September 4, 2006 | to December 31, 2006 | |||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | US$ | |||||||||||||||||||||
Current tax expense | 1,490,235 | 15,198,551 | 23,779,256 | 3,078,938 | 21,608,383 | 2,797,854 | ||||||||||||||||||||
Deferred tax (benefit) expense | (269,063 | ) | (2,462,933 | ) | (1,233,274 | ) | (159,684 | ) | 1,359,703 | 176,054 | ||||||||||||||||
Total income tax expense | 1,221,172 | 12,735,618 | 22,545,982 | 2,919,254 | 22,968,086 | 2,973,908 | ||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||||
Year Ended | Year Ended | August 7, 2006 (date of | |||||||||||||||||||||||||
December 31, | December 31, | January 1, 2006 | inception) to December 31, | ||||||||||||||||||||||||
2004 | 2005 | to September 4, 2006 | 2006 | ||||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | US$ | ||||||||||||||||||||||
Computed “expected” tax expense | 2,387,354 | 25,955,740 | 68,868,618 | 8,917,109 | 32,429,178 | 4,198,930 | |||||||||||||||||||||
Tax rate differential, preferential rate | (1,341,740 | ) | (14,175,779 | ) | (37,602,467 | ) | (4,868,768 | ) | (17,546,037 | ) | (2,271,861 | ) | |||||||||||||||
Tax rate change | — | — | — | — | 4,041,707 | 523,320 | |||||||||||||||||||||
Foreign tax rate differential | — | — | — | — | 5,762,679 | 746,152 | |||||||||||||||||||||
Equipment acquisition tax credit | — | — | (10,645,920 | ) | (1,378,434 | ) | — | — | |||||||||||||||||||
Research and development tax credit | — | (298,831 | ) | (274,892 | ) | (35,593 | ) | (1,788,378 | ) | (231,559 | ) | ||||||||||||||||
Non-deductible expenses: | |||||||||||||||||||||||||||
Salaries and benefits in excess of allowable limits | 11,997 | 800,322 | 1,596,111 | 206,664 | — | — | |||||||||||||||||||||
Interest on delinquent tax payments | 63,320 | 112,117 | 224,401 | 29,055 | — | — | |||||||||||||||||||||
Non-deductible loan interest | — | — | 224,336 | 29,047 | 33,936 | 4,394 | |||||||||||||||||||||
Other | 100,241 | 342,049 | 155,795 | 20,174 | 35,001 | 4,532 | |||||||||||||||||||||
Actual income tax expense | 1,221,172 | 12,735,618 | 22,545,982 | 2,919,254 | 22,968,086 | 2,973,908 | |||||||||||||||||||||
F-36
Table of Contents
Predecessor | ||||||||||||||||||||||
December 31, | December 31, | September 4, | ||||||||||||||||||||
2004 | 2005 | 2006 | December 31, 2006 | |||||||||||||||||||
RMB | RMB | RMB | RMB | US$ | ||||||||||||||||||
Current Deferred Income Tax Assets: | ||||||||||||||||||||||
Accounts receivable | 108,539 | 2,828,956 | 2,622,619 | — | — | |||||||||||||||||
Inventories | 124,570 | 208,155 | 468,664 | — | — | |||||||||||||||||
Accrued payroll and welfare | — | 235,396 | 269,733 | — | — | |||||||||||||||||
Accrued warranty | 219,600 | 752,079 | 2,050,943 | 3,589,705 | 464,795 | |||||||||||||||||
Total current deferred tax assets | 452,709 | 4,024,586 | 5,411,959 | 3,589,705 | 464,795 | |||||||||||||||||
Non-current Deferred Income Tax Liabilities: | ||||||||||||||||||||||
Property, plant and equipment | (214,116 | ) | (1,004,800 | ) | (1,216,989 | ) | (307,679 | ) | (39,838 | ) | ||||||||||||
Intangible assets | — | — | — | (15,598,383 | ) | (2,019,679 | ) | |||||||||||||||
Land use rights | (52,063 | ) | (141,325 | ) | (83,235 | ) | (90,783 | ) | (11,755 | ) | ||||||||||||
Total non-current deferred tax liabilities | (266,179 | ) | (1,146,125 | ) | (1,300,224 | ) | (15,996,845 | ) | (2,071,272 | ) | ||||||||||||
(16) | Share-Based Compensation |
Stock Option and Stock Issuance Plan |
F-37
Table of Contents
December 28, 2006 | ||||
Expected volatility | 70% | |||
Expected dividends yield | 0% | |||
Expected term | 6.3 years | |||
Risk-free interest rate (per annum) | 5.13% | |||
Estimated fair value of underlying ordinary shares (per share) | US$4.74 |
F-38
Table of Contents
Weighted | ||||||||||||||||
Weighted | Average | |||||||||||||||
Average | Remaining | |||||||||||||||
Number of | Exercise | Contractual | Aggregate | |||||||||||||
Shares | Price | Term | Intrinsic Value | |||||||||||||
Outstanding as of August 7, 2006 | — | — | ||||||||||||||
Granted on December 28, 2006 | 610,929 | US$ | 2.10 | |||||||||||||
Exercised | — | — | ||||||||||||||
Forfeited or expired | — | — | ||||||||||||||
Outstanding as of December 31, 2006 | 610,929 | US$ | 2.10 | 10 years | RMB 12,604,281 | |||||||||||
Exercisable as of December 31, 2006 | — | — | — | |||||||||||||
(17) | Redeemable Convertible Preferred Shares |
F-39
Table of Contents
F-40
Table of Contents
Original Issue | Shares | Shares Issued | ||||||||||||||||||
Series | Price Per Share | Authorized | and Outstanding | Carrying Amount | ||||||||||||||||
US$ | US$ | RMB | ||||||||||||||||||
A | 2.10 | 8,081,081 | 8,081,081 | 17,224,591 | 134,501,664 | |||||||||||||||
B | 4.835 | 24,405,377 | 23,474,663 | 113,057,983 | 882,835,869 | |||||||||||||||
32,486,458 | 31,555,744 | |||||||||||||||||||
Voting |
F-41
Table of Contents
Dividends |
Liquidation |
Conversion |
Purchase price adjustment |
F-42
Table of Contents
(18) | Ordinary Shares |
(19) | Earnings per share |
Basic and diluted earnings per share |
August 7, 2006 | |||||||||
(date of inception) to | |||||||||
December 31, 2006 | |||||||||
RMB | US$ | ||||||||
Numerator: | |||||||||
Net income | 30,016,682 | 3,886,560 | |||||||
Accretion to Series A and B Preferred Shares redemption value | (6,968,903 | ) | (902,334 | ) | |||||
Earnings allocated to participating preferred shareholders | (2,478,968 | ) | (320,976 | ) | |||||
Numerator for basic earnings per share | 20,568,811 | 2,663,250 | |||||||
Effect of dilutive securities | — | — | |||||||
Numerator for diluted earnings per share | 20,568,811 | 2,663,250 | |||||||
Denominator: | |||||||||
Denominator for basic earnings per share — Weighted-average ordinary shares outstanding | 56,510,959 | 56,510,959 | |||||||
Series A Preferred Share Warrant | 243,416 | 243,416 | |||||||
Series B Preferred Share Warrant | 151,503 | 151,503 | |||||||
Denominator for diluted earning per share | 56,905,878 | 56,905,878 | |||||||
Basic earnings per share | 0.36 | 0.05 | |||||||
Diluted earnings per share | 0.36 | 0.05 |
F-43
Table of Contents
(20) | Related-Party Transactions |
a) Amounts due from related parties: |
Predecessor | ||||||||||||||||||||||
December 31, | December 31, | September 4, | ||||||||||||||||||||
2004 | 2005 | 2006 | December 31, 2006 | |||||||||||||||||||
RMB | RMB | RMB | RMB | US$ | ||||||||||||||||||
Loans to Yingli Group | 8,446,964 | 8,847,268 | 59,847,268 | — | — | |||||||||||||||||
Prepayments for material purchases | — | 15,000,000 | 3,902,773 | 4,857,752 | 628,982 | |||||||||||||||||
Other | 1,297,803 | 2,122,659 | 13,433,879 | 8,300,000 | 1,074,684 | |||||||||||||||||
Total amounts due from related parties | 9,744,767 | 25,969,927 | 77,183,920 | 13,157,752 | 1,703,666 | |||||||||||||||||
Loans to Yingli Group |
F-44
Table of Contents
Prepayments for material purchases |
Other |
F-45
Table of Contents
b) Capital Subscription Receivable |
c) Amounts Due to Related Parties |
Predecessor | ||||||||||||||||||||||
December 31, | December 31, | September 4, | ||||||||||||||||||||
2004 | 2005 | 2006 | December 31, 2006 | |||||||||||||||||||
RMB | RMB | RMB | RMB | US$ | ||||||||||||||||||
Borrowings from related parties | (8,100,000 | ) | (100,350,000 | ) | (21,800,000 | ) | (31,849,352 | ) | (4,123,854 | ) | ||||||||||||
Payables to related parties | — | (1,800,000 | ) | (1,150,000 | ) | (1,991,793 | ) | (257,897 | ) | |||||||||||||
Amount due to Tibetan Yingli | — | (8,000,000 | ) | (8,000,000 | ) | — | — | |||||||||||||||
Total amounts due to related parties | (8,100,000 | ) | (110,150,000 | ) | (30,950,000 | ) | (33,841,145 | ) | (4,381,751 | ) | ||||||||||||
Borrowings from related parties |
F-46
Table of Contents
Payables to related parties |
Amount due to Tibetan Yingli |
(21) | Capital Commitments |
F-47
Table of Contents
(22) | Net Asset Purchase |
RMB | US$ | |||||||
Assets acquired: | ||||||||
Property, plant and equipment | 3,042,347 | 393,923 | ||||||
Land use rights | 6,984,391 | 904,339 | ||||||
Other assets | 67,548 | 8,746 | ||||||
Deferred income tax assets | 228,998 | 29,651 | ||||||
Total assets acquired | 10,323,284 | 1,336,659 | ||||||
Liabilities assumed: | ||||||||
Short term borrowing | 70,000 | 9,064 | ||||||
Accounts payable | 171,512 | 22,207 | ||||||
Unpaid salary and welfare costs | 7,626,712 | 987,507 | ||||||
Income tax payable | 1,455,060 | 188,401 | ||||||
Total liabilities assumed | 9,323,284 | 1,207,179 |
(23) | Step-up Acquisitions |
(a) | Goodwill |
F-48
Table of Contents
Acquisition of additional equity interest in Tianwei Yingli to 53.98% from 51% |
RMB | US$ | ||||||||
Total cash consideration | 130,940,000 | 16,954,112 | |||||||
Less: Ownership interest in cash consideration (53.98%×RMB 130,940,000) | (70,681,412 | ) | (9,151,830 | ) | |||||
Net cash consideration | 60,258,588 | 7,802,282 | |||||||
Net tangible assets acquired | 7,891,594 | 1,021,804 | |||||||
Identifiable intangible assets: | |||||||||
Trademarks | 5,044,000 | 653,097 | |||||||
Technical know-how | 25,432,000 | 3,292,936 | |||||||
Customer relationships | 7,141,000 | 924,617 | |||||||
Order backlog | 2,268,000 | 293,660 | |||||||
Short-term supplier contracts | 2,761,000 | 357,494 | |||||||
Long-term supplier contracts | 5,736,000 | 742,697 | |||||||
Goodwill | 3,984,994 | 515,977 | |||||||
Purchase price allocated | 60,258,588 | 7,802,282 | |||||||
F-49
Table of Contents
RMB | US$ | ||||||||
Total cash consideration | 484,840,000 | 62,777,087 | |||||||
Less: Ownership interest in cash consideration (62.13%×RMB 484,840,000) | (301,231,092 | ) | (39,003,404 | ) | |||||
Net cash consideration | 183,608,908 | 23,773,683 | |||||||
Net tangible assets acquired | 22,807,970 | 2,953,176 | |||||||
Identifiable intangible assets | |||||||||
Trademarks | 10,554,310 | 1,366,572 | |||||||
Technical know-how | 82,176,443 | 10,640,207 | |||||||
Customer relationships | 15,485,165 | 2,005,019 | |||||||
Order backlog | 9,683,048 | 1,253,761 | |||||||
Short-term supplier contracts | 1,541,827 | 199,636 | |||||||
Long-term supplier contracts | 41,360,145 | 5,355,312 | |||||||
Purchase price allocated | 183,608,908 | 23,773,683 | |||||||
(b) | Intangible Assets |
Predecessor | |||||||||||||
December 31, | December 31, | September 4, | |||||||||||
2004 | 2005 | 2006 | |||||||||||
RMB | RMB | RMB | |||||||||||
Technical license | |||||||||||||
Cost | 450,000 | 450,000 | 450,000 | ||||||||||
Less: Accumulated amortization | (75,000 | ) | (165,000 | ) | (450,000 | ) | |||||||
Intangible asset, net | 375,000 | 285,000 | — | ||||||||||
F-50
Table of Contents
December 31, 2006 | |||||||||||||||||||
Gross | |||||||||||||||||||
Amortization | carrying | Accumulated | |||||||||||||||||
period | amount | amortization | Intangibles, net | ||||||||||||||||
Years | RMB | RMB | RMB | US$ | |||||||||||||||
Trademark | Indefinite | 15,598,310 | — | 15,598,310 | 2,019,669 | ||||||||||||||
Technical know-how | 6 | 107,608,443 | (927,492 | ) | 106,680,951 | 13,813,050 | |||||||||||||
Customer relationship | 6 | 22,626,165 | (218,269 | ) | 22,407,896 | 2,901,375 | |||||||||||||
Order backlog | 1.5 | 11,951,048 | (383,179 | ) | 11,567,869 | 1,497,808 | |||||||||||||
Short-term supplier agreements | less than 1 year | 4,302,827 | (716,344 | ) | 3,586,483 | 464,378 | |||||||||||||
Long-term supplier agreements | 5-9 beginning 2009 | 47,096,145 | — | 47,096,145 | 6,098,009 | ||||||||||||||
Total | 209,182,938 | (2,245,284 | ) | 206,937,654 | 26,794,289 | ||||||||||||||
F-51
Table of Contents
December 31, | ||||
RMB | ||||
2007 | 32,088,278 | |||
2008 | 24,134,933 | |||
2009 | 26,277,201 | |||
2010 | 26,277,201 | |||
2011 | 26,277,201 | |||
135,054,814 | ||||
(24) | Geographic Revenue Information |
Predecessor | ||||||||||||||||||||||||||
Years Ended December 31 | August 7, 2006 (date of | |||||||||||||||||||||||||
From January 1, 2006 to | inception) to December 31, | |||||||||||||||||||||||||
2004 | 2005 | September 4, 2006 | 2006 | |||||||||||||||||||||||
RMB | RMB | RMB | US$ | RMB | US$ | |||||||||||||||||||||
Europe: | ||||||||||||||||||||||||||
— Germany | 80,462,529 | 238,983,858 | 602,785,544 | 78,048,677 | 406,889,138 | 52,684,009 | ||||||||||||||||||||
— Spain | — | 28,500,778 | 78,595,263 | 10,176,515 | 157,473,909 | 20,389,723 | ||||||||||||||||||||
— Austria | 6,476,061 | 19,971,063 | — | — | — | — | ||||||||||||||||||||
— Others | — | 8,586,846 | 66,250,764 | 8,578,150 | 22,202,092 | 2,874,727 | ||||||||||||||||||||
Subtotal-Europe | 86,938,590 | 296,042,545 | 747,631,571 | 96,803,342 | 586,565,139 | 75,948,459 | ||||||||||||||||||||
PRC (excluding Hong Kong, Macau and Taiwan) | 28,791,109 | 57,292,144 | 30,940,554 | 4,006,184 | 50,027,539 | 6,447,566 | ||||||||||||||||||||
Hong Kong | — | — | 83,799,181 | 10,850,319 | 70,785,984 | 9,165,370 | ||||||||||||||||||||
United States of America | — | 6,462,421 | 13,502 | 1,748 | 40,563,727 | 5,252,192 | ||||||||||||||||||||
Other countries | 4,761,163 | 4,984,512 | 32,961,274 | 4,267,825 | 6,854,577 | 887,531 | ||||||||||||||||||||
Total gross revenue | 120,490,862 | 364,781,622 | 895,346,082 | 115,929,418 | 754,796,966 | 97,731,118 | ||||||||||||||||||||
Sales tax and surcharge | (8,242 | ) | (2,987,288 | ) | (11,357,591 | ) | (1,470,581 | ) | (4,208 | ) | (545 | ) | ||||||||||||||
Total net revenues | 120,482,620 | 361,794,334 | 883,988,491 | 114,458,837 | 754,792,758 | 97,730,573 | ||||||||||||||||||||
F-52
Table of Contents
(25) | Subsequent Events |
a) Issuance of additional Series B Preferred Shares |
b) Issuance of restricted stock |
c) Loans Guaranteed by Tianwei Group |
d) Issuance of Additional Series B Warrants |
e) Amendment to the 2006 Stock Incentive Plan and the Board of Directors’ Approval for New Grants |
Amendment to the 2006 Stock Incentive Plan |
F-53
Table of Contents
The Board of Directors’ Approval of New Grants |
f) Short-term Borrowings |
g) | Exercise of Series A warrant |
F-54
Table of Contents
(26) | Unaudited Pro Forma Information |
August 7, 2006 | |||||||||
(date of inception) to | |||||||||
December 31, 2006 | |||||||||
RMB | US$ | ||||||||
Numerator: | |||||||||
Net income available to ordinary shares | 23,047,779 | 2,984,227 | |||||||
Earnings allocated to participating preferred shares | 2,478,968 | 320,977 | |||||||
Accretion to Series A and B Preferred Shares redemption value | 6,968,903 | 902,334 | |||||||
Interest expense on Mandatory Convertible Bonds payable to Yingli Power | 4,867,088 | 630,191 | |||||||
Pro forma net income available to ordinary shareholders | 37,362,738 | 4,837,728 | |||||||
Denominator for pro forma basic income per share | |||||||||
Weight average number of ordinary shares outstanding | 56,510,959 | 56,510,959 | |||||||
Shares issuable upon conversion of: | |||||||||
Series A Preferred Shares | 8,081,081 | 8,081,081 | |||||||
Series B Preferred Shares | 23,474,663 | 23,474,663 | |||||||
Mandatory Convertible Bonds payable to Yingli Power | 5,458,768 | 5,458,768 | |||||||
Denominator for pro forma basic earnings per share | 93,525,471 | 93,525,471 | |||||||
Dilutive effect of Series A preferred share warrant | 243,416 | 243,416 | |||||||
Dilutive effect of Series B preferred share warrant | 151,503 | 151,503 | |||||||
Denominator for pro forma diluted earnings per share | 93,920,390 | 93,920,390 | |||||||
Pro forma earnings per share — basic | 0.40 | 0.05 | |||||||
Pro forma earnings per share — diluted | 0.40 | 0.05 |
F-55
Table of Contents
December 31, | March 31, | |||||||||||||||
Note | 2006 | 2007 | ||||||||||||||
RMB | RMB | US$ | ||||||||||||||
ASSETS | ||||||||||||||||
Current assets | ||||||||||||||||
Cash | 78,454,551 | 105,416,818 | 13,649,370 | |||||||||||||
Restricted cash | (4 | ) | 321,780,307 | 433,043,129 | 56,070,428 | |||||||||||
Accounts receivable, net | 281,920,557 | 252,670,098 | 32,715,726 | |||||||||||||
Inventories | (5 | ) | 811,745,634 | 897,864,680 | 116,255,526 | |||||||||||
Prepayments to suppliers | (6 | ) | 134,823,298 | 330,292,323 | 42,766,253 | |||||||||||
Prepaid expenses and other current assets | 84,003,092 | 78,951,680 | 10,222,665 | |||||||||||||
Amounts due from related parties | (11 | ) | 13,157,752 | 15,002,380 | 1,942,508 | |||||||||||
Total current assets | 1,725,885,191 | 2,113,241,108 | 273,622,476 | |||||||||||||
Long-term prepayments to supplier | (6 | ) | 226,273,660 | 227,161,872 | 29,412,921 | |||||||||||
Property, plant and equipment, net | 583,498,389 | 755,034,252 | 97,761,841 | |||||||||||||
Land use rights and other long-term assets | 66,881,005 | 71,075,412 | 9,202,845 | |||||||||||||
Intangible assets and goodwill | 210,922,648 | 201,352,952 | 26,071,182 | |||||||||||||
Total assets | 2,813,460,893 | 3,367,865,596 | 436,071,265 | |||||||||||||
LIABILITIES, MINORITY INTEREST, REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities | ||||||||||||||||
Short-term borrowings | (7 | ) | 267,286,306 | 731,948,522 | 94,772,701 | |||||||||||
Borrowings from related parities | (11 | ) | 31,849,352 | 28,570,049 | 3,699,250 | |||||||||||
Accounts payable | 123,224,685 | 162,700,886 | 21,066,512 | |||||||||||||
Other current liabilities and accrued expenses | 96,733,068 | 87,133,689 | 11,282,070 | |||||||||||||
Advances from customers | 113,637,769 | 65,192,777 | 8,441,161 | |||||||||||||
Income taxes payable | 33,518,114 | 3,474,072 | 449,823 | |||||||||||||
Other amounts due to related parties | (11 | ) | 1,991,793 | 1,801,782 | 233,295 | |||||||||||
Total current liabilities | 668,241,087 | 1,080,821,777 | 139,944,812 | |||||||||||||
Deferred income taxes | 15,996,845 | 16,375,822 | 2,120,342 | |||||||||||||
Mandatory convertible bonds payable to Yingli Power | 362,530,181 | 361,726,290 | 46,836,323 | |||||||||||||
Mandatory redeemable bonds payable to Yingli Power | 293,109,511 | 292,459,559 | 37,867,666 | |||||||||||||
Total liabilities | 1,339,877,624 | 1,751,383,448 | 226,769,143 | |||||||||||||
Minority interest | (15 | ) | 387,715,972 | 401,762,301 | 52,020,186 | |||||||||||
Series A redeemable convertible preferred shares | (9 | ) | 134,501,664 | 136,899,386 | 17,725,734 | |||||||||||
Series B redeemable convertible preferred shares | (9 | ) | 882,835,869 | 929,774,916 | 120,387,264 | |||||||||||
Shareholders’ equity: | ||||||||||||||||
Ordinary shares | (9 | ) | 4,744,652 | 4,905,175 | 635,122 | |||||||||||
Additional paid-in capital | 35,342,380 | 124,110,296 | 16,069,802 | |||||||||||||
Accumulated other comprehensive income | 5,394,953 | 18,138,875 | 2,348,622 | |||||||||||||
Retained earnings | 23,047,779 | 891,199 | 115,392 | |||||||||||||
Total shareholders’ equity | 68,529,764 | 148,045,545 | 19,168,938 | |||||||||||||
Commitments and contingencies | (13 | ) | — | — | — | |||||||||||
Total liabilities, minority interest, redeemable convertible preferred shares and shareholders’ equity | 2,813,460,893 | 3,367,865,596 | 436,071,265 | |||||||||||||
F-56
Table of Contents
Predecessor | |||||||||||||||||
Three-Month | |||||||||||||||||
Period Ended | |||||||||||||||||
March 31, | Three-Month Period Ended | ||||||||||||||||
2006 | March 31, 2007 | ||||||||||||||||
Note | RMB | RMB | US$ | ||||||||||||||
Net revenues | (3 | ) | 200,899,638 | 428,553,460 | 55,489,106 | ||||||||||||
Cost of revenues | 153,676,423 | 338,943,596 | 43,886,420 | ||||||||||||||
Gross profit | 47,223,215 | 89,609,864 | 11,602,686 | ||||||||||||||
Selling expenses | 5,272,243 | 17,370,923 | 2,249,187 | ||||||||||||||
General and administrative expenses | 5,776,804 | 23,692,289 | 3,067,678 | ||||||||||||||
Research and development expenses | 592,968 | 7,578,902 | 981,316 | ||||||||||||||
Total operating expenses | 11,642,015 | 48,642,114 | 6,298,181 | ||||||||||||||
Income from operations | 35,581,200 | 40,967,750 | 5,304,505 | ||||||||||||||
Other income (expense): | |||||||||||||||||
Interest expense | (4,855,161 | ) | (19,179,997 | ) | (2,483,426 | ) | |||||||||||
Interest income | 59,917 | 307,912 | 39,868 | ||||||||||||||
Other expense | (458,875 | ) | (69,573 | ) | (9,008 | ) | |||||||||||
Income before income taxes and minority interest | 30,327,081 | 22,026,092 | 2,851,939 | ||||||||||||||
Income tax (expense) benefit | (14 | ) | (5,375,453 | ) | 359,993 | 46,612 | |||||||||||
Income before minority interest | 24,951,628 | 22,386,085 | 2,898,551 | ||||||||||||||
Minority interest | (15 | ) | 28,151 | (14,046,329 | ) | (1,818,719 | ) | ||||||||||
Net income | 24,979,779 | 8,339,756 | 1,079,832 | ||||||||||||||
Accretion of Series A and Series B redeemable convertible preferred shares to redemption value | — | (30,496,336 | ) | (3,948,666 | ) | ||||||||||||
Net loss applicable to ordinary shareholders | — | (22,156,580 | ) | (2,868,834 | ) | ||||||||||||
Basic and diluted loss per share applicable to ordinary shareholders | (10 | ) | — | (0.36 | ) | (0.05 | ) | ||||||||||
Pro forma basic earnings per share | (19 | ) | — | 0.18 | 0.02 | ||||||||||||
Pro forma diluted earnings per share | (19 | ) | — | 0.17 | 0.02 |
F-57
Table of Contents
Ordinary Share | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||
Numbers of | Paid-in | Comprehensive | Retained | Comprehensive | ||||||||||||||||
Shares | Amount | Capital | Income | Earnings | Total | Income | ||||||||||||||
Note | RMB | RMB | RMB | RMB | RMB | RMB | ||||||||||||||
Balance as of December 31, 2006 | 59,800,000 | 4,744,652 | 35,342,380 | 5,394,953 | 23,047,779 | 68,529,764 | ||||||||||||||
Exercise of warrant | 2,068,252 | 160,523 | 77,452,478 | 77,613,001 | ||||||||||||||||
Net income | 8,339,756 | 8,339,756 | 8,339,756 | |||||||||||||||||
Foreign currency translation adjustment | 12,743,922 | 12,743,922 | 12,743,922 | |||||||||||||||||
21,083,678 | ||||||||||||||||||||
Issuance of warrants in connection with issuance of Series B redeemable convertible preferred shares | (9 | ) | 343,035 | 343,035 | ||||||||||||||||
Issuance of warrants in connection with release of escrow arrangement | (9 | ) | 5,848,702 | 5,848,702 | ||||||||||||||||
Accretion of Series A redeemable convertible preferred shares to redemption value | (3,688,902) | (3,688,902) | ||||||||||||||||||
Accretion of Series B redeemable convertible preferred shares to redemption value | (26,807,434) | (26,807,434) | ||||||||||||||||||
Share-based compensation expense | (8 | ) | 5,123,701 | 5,123,701 | ||||||||||||||||
Balance as of March 31, 2007 | 61,868,252 | 4,905,175 | 124,110,296 | 18,138,875 | 891,199 | 148,045,545 | ||||||||||||||
Balance as of March 31, 2007 - US$ | 635,122 | 16,069,802 | 2,348,622 | 115,392 | 19,168,938 | |||||||||||||||
F-58
Table of Contents
Predecessor | ||||||||||||||||||
Three-Month | ||||||||||||||||||
Period Ended | ||||||||||||||||||
March 31, | Three-Month Period Ended | |||||||||||||||||
2006 | March 31, 2007 | |||||||||||||||||
Note | RMB | RMB | US$ | |||||||||||||||
Net income | 24,979,779 | 8,339,756 | 1,079,832 | |||||||||||||||
Adjustments to reconcile net income to net cash used in provided by operating activities: | ||||||||||||||||||
Depreciation and amortization | 7,238,630 | 24,495,780 | 3,171,714 | |||||||||||||||
Bad debt recovery | — | (252,920 | ) | (32,748 | ) | |||||||||||||
Minority interest | (15 | ) | (28,151 | ) | 14,046,329 | 1,818,719 | ||||||||||||
Equity in loss of an affiliate | 193,576 | 138,473 | 17,929 | |||||||||||||||
Share-based compensation | — | 5,123,701 | 663,417 | |||||||||||||||
Deferred income tax expense (benefit) | 1,732,711 | (359,992 | ) | (46,612 | ) | |||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||
Restricted cash related to purchase of inventory and other operating activities | 11,069,515 | (12,148,553 | ) | (1,572,995 | ) | |||||||||||||
Accounts receivable | (16,070,328 | ) | 29,503,379 | 3,820,098 | ||||||||||||||
Inventories | (55,551,475 | ) | (8,220,066 | ) | (1,064,334 | ) | ||||||||||||
Prepayments to suppliers | (53,448,166 | ) | (274,256,218 | ) | (35,510,697 | ) | ||||||||||||
Prepaid expenses and other current assets | (14,796,075 | ) | 15,198,969 | 1,967,962 | ||||||||||||||
Amounts due from related parties | (11 | ) | 12,030,870 | 176,070 | 22,798 | |||||||||||||
Accounts payable | 8,997,178 | 31,573,346 | 4,088,117 | |||||||||||||||
Other current liabilities, accrued expense and income tax payable | 10,550,124 | (25,383,925 | ) | (3,286,711 | ) | |||||||||||||
Advances from customers | 48,136,999 | (48,444,992 | ) | (6,272,658 | ) | |||||||||||||
Amounts due to other related parties | (11 | ) | 79,084 | (190,011 | ) | (24,603 | ) | |||||||||||
Net cash used in operating activities | (14,885,729 | ) | (240,660,874 | ) | (31,160,772 | ) | ||||||||||||
F-59
Table of Contents
Predecessor | |||||||||||||||||
Three-Month | |||||||||||||||||
Period Ended | |||||||||||||||||
March 31, | Three-Month Period Ended | ||||||||||||||||
2006 | March 31, 2007 | ||||||||||||||||
Note | RMB | RMB | US$ | ||||||||||||||
Cash flows from investing activities | |||||||||||||||||
Purchase of property, plant and equipment | (34,348,683 | ) | (173,458,514 | ) | (22,459,410 | ) | |||||||||||
Payment for land use rights | — | (2,254,429 | ) | (291,903 | ) | ||||||||||||
Release of restricted cash relating to Series B redeemable convertible preferred shares | — | 151,196,848 | 19,576,969 | ||||||||||||||
Restricted cash placed as collateral for bank loans | — | (252,908,340 | ) | (32,746,574 | ) | ||||||||||||
Loans made to Yingli Group | (11 | ) | (1,303,377 | ) | (2,020,697 | ) | (261,640 | ) | |||||||||
Repayment of advances to an affiliate | 1,080,900 | — | |||||||||||||||
Advances paid to an affiliate | — | (2,367,274 | ) | (306,515 | ) | ||||||||||||
Net cash used in investing activities | (34,571,160 | ) | (281,812,406 | ) | (36,489,073 | ) | |||||||||||
Cash flows from financing activities | |||||||||||||||||
Proceeds from bank borrowings | 177,874,325 | 775,933,238 | 100,467,842 | ||||||||||||||
Repayment of bank borrowings | (51,859,090 | ) | (334,271,022 | ) | (43,281,415 | ) | |||||||||||
Contribution from minority interest shareholder of Yingli Guangfu | 490,000 | — | |||||||||||||||
Proceeds from exercise of warrant | — | 77,613,001 | 10,049,332 | ||||||||||||||
Proceeds from issuance of Series B redeemable convertible preferred shares | — | 34,803,900 | 4,506,409 | ||||||||||||||
Repayment of over subscription of Series B redeemable convertible preferred shares | — | (23,672,074 | ) | (3,065,060 | ) | ||||||||||||
Proceeds from borrowings from related parties | (11 | ) | — | 40,220,697 | 5,207,776 | ||||||||||||
Repayment of borrowings from related parties | (11 | ) | (3,000,000 | ) | (43,500,000 | ) | (5,632,380 | ) | |||||||||
Proceeds from borrowings from third party non-financial services companies | — | 35,000,000 | 4,531,800 | ||||||||||||||
Repayment of borrowings from third party non-financial services companies | (45,500,876 | ) | (12,000,000 | ) | (1,553,760 | ) | |||||||||||
Net cash provided by financing activities | 78,004,359 | 550,127,740 | 71,230,544 | ||||||||||||||
Effect of foreign currency exchange rate changes on cash | — | (692,193 | ) | (89,625 | ) | ||||||||||||
Net increase in cash | 28,547,470 | 26,962,267 | 3,491,074 | ||||||||||||||
Cash at beginning of period | 14,864,672 | 78,454,551 | 10,158,296 | ||||||||||||||
Cash at end of period | 43,412,142 | 105,416,818 | 13,649,370 | ||||||||||||||
F-60
Table of Contents
Predecessor | |||||||||||||
Three-Month | |||||||||||||
Period Ended | |||||||||||||
March 31, | Three-Month Period Ended | ||||||||||||
2006 | March 31, 2007 | ||||||||||||
RMB | RMB | US$ | |||||||||||
Interest paid, net of capitalized interest (note 16) | 2,614,891 | 11,701,988 | 1,515,174 | ||||||||||
Income tax paid | — | 30,044,042 | 3,890,103 | ||||||||||
Non-cash investing transactions: | |||||||||||||
Payables for purchase of property, plant and equipment | 5,068,370 | 7,902,859 | 1,023,262 |
F-61
Table of Contents
(1) | Basis of Presentation |
F-62
Table of Contents
(2) | Recently Issued Accounting Standards |
FASB interpretation No. 48 (FIN 48) |
SFAS No. 155 |
SFAS No. 157 |
SFAS No. 159 |
F-63
Table of Contents
(3) | Geographic Revenue Information |
Predecessor | |||||||||||||||
Three-Month | |||||||||||||||
Period Ended | |||||||||||||||
March 31, | Three-Month Period Ended | ||||||||||||||
2006 | March 31, 2007 | ||||||||||||||
RMB | RMB | US$ | |||||||||||||
Europe: | |||||||||||||||
— Germany | 166,128,340 | 50,531,601 | 6,542,832 | ||||||||||||
— Spain | 6,833,434 | 251,056,307 | 32,506,773 | ||||||||||||
— Others | 4,751,968 | 2,237,546 | 289,717 | ||||||||||||
Subtotal — Europe | 177,713,742 | 303,825,454 | 39,339,322 | ||||||||||||
PRC (excluding Hong Kong, Macau and Taiwan) | 4,798,361 | 14,898,794 | 1,929,096 | ||||||||||||
Hong Kong | 20,124,868 | 79,914,171 | 10,347,288 | ||||||||||||
Other countries | 794,387 | 29,917,191 | 3,873,678 | ||||||||||||
Total gross revenue | 203,431,358 | 428,555,610 | 55,489,384 | ||||||||||||
Sales tax and surcharge | (2,531,720 | ) | (2,150 | ) | (278 | ) | |||||||||
Total net revenues | 200,899,638 | 428,553,460 | 55,489,106 | ||||||||||||
(4) | Cash and Restricted cash |
F-64
Table of Contents
December 31, | |||||||||||||
2006 | March 31, 2007 | ||||||||||||
RMB | RMB | US$ | |||||||||||
Deposits for outstanding letters of credit and guarantee | 16,105,056 | 25,169,298 | 3,258,921 | ||||||||||
Financing arrangements: | |||||||||||||
Mandatory convertible and redeemable bonds | 168,968,297 | 154,965,491 | 20,064,933 | ||||||||||
Series B redeemable convertible preferred shares | 136,706,954 | — | |||||||||||
Collateral for bank loans | — | 252,908,340 | 32,746,574 | ||||||||||
Total | 321,780,307 | 433,043,129 | 56,070,428 | ||||||||||
(5) | Inventories |
December 31, | |||||||||||||
2006 | March 31, 2007 | ||||||||||||
RMB | RMB | US$ | |||||||||||
Raw materials | 489,352,191 | 448,110,997 | 58,021,416 | ||||||||||
Work-in-progress | 187,655,590 | 219,808,512 | 28,460,807 | ||||||||||
Finished goods | 134,737,853 | 229,945,171 | 29,773,303 | ||||||||||
Total inventories | 811,745,634 | 897,864,680 | 116,255,526 | ||||||||||
(6) | Prepayments to Suppliers |
F-65
Table of Contents
(7) | Short-term Borrowings |
December 31, | |||||||||||||
2006 | March 31, 2007 | ||||||||||||
RMB | RMB | US$ | |||||||||||
Borrowings from banks: | |||||||||||||
— Guaranteed by Tianwei Baobian and its parent company | 220,000,000 | 419,000,000 | 54,252,123 | ||||||||||
— Entrusted loans by related parties | 1,000,000 | 1,000,000 | 129,480 | ||||||||||
— Secured by accounts receivables | 34,286,306 | 22,506,522 | 2,914,146 | ||||||||||
— Secured by bank deposits | — | 100,000,000 | 12,948,001 | ||||||||||
— Unsecured loans | — | 154,442,000 | 19,997,151 | ||||||||||
Borrowings from other parties: | |||||||||||||
— Governmental loan guaranteed by Tianwei Baobian | 12,000,000 | — | |||||||||||
— Governmental loan guaranteed by Yingli Group | — | 30,000,000 | 3,884,400 | ||||||||||
— Other third parties loan | — | 5,000,000 | 647,400 | ||||||||||
Total short-term borrowings | 267,286,306 | 731,948,522 | 94,772,701 | ||||||||||
F-66
Table of Contents
(8) | Share-Based Compensation |
F-67
Table of Contents
Weighted | ||||||||||||||||
Average | ||||||||||||||||
Number | Weighted | Remaining | ||||||||||||||
of Stock | Average | Contractual | Aggregate | |||||||||||||
Options | Exercise Price | Term | Intrinsic Value | |||||||||||||
Outstanding as of December 31, 2006 | 610,929 | US$ | 2.10 | |||||||||||||
Granted | — | — | ||||||||||||||
Exercised | — | — | ||||||||||||||
Forfeited or expired | — | — | ||||||||||||||
Outstanding as of March 31, 2007 | 610,929 | US$ | 2.10 | 9.75 years | RMB 12,604,281 | |||||||||||
Exercisable as of March 31, 2007 | — | — | — | |||||||||||||
(9) | Ordinary and Redeemable Convertible Preferred Shares |
F-68
Table of Contents
Shares | ||||||||||||||||
Redemption | ||||||||||||||||
Authorized | Issued | Outstanding | Value (in US$) | |||||||||||||
Ordinary shares | 967,513,542 | 61,868,252 | 61,868,252 | — | ||||||||||||
Series A Preferred Shares | 8,081,081 | 8,081,081 | 8,081,081 | 23,133,600 | ||||||||||||
Series B Preferred Shares | 24,405,377 | 24,405,377 | 24,405,377 | 160,480,003 |
F-69
Table of Contents
(10) | Loss per share |
Three-Month Period Ended March 31, 2007 | |||||||||
RMB | US$ | ||||||||
Numerator: | |||||||||
Net income | 8,339,756 | 1,079,832 | |||||||
Accretion to Series A and B preferred shares redemption value | (30,496,336 | ) | (3,948,666 | ) | |||||
Loss allocated to participating preferred shareholders | — | ||||||||
Numerator for basic loss per share | (22,156,580 | ) | (2,868,834 | ) | |||||
Effect of dilutive securities | — | ||||||||
Numerator for diluted loss per share | (22,156,580 | ) | (2,868,834 | ) | |||||
Denominator: | |||||||||
Denominator for basic loss per share | |||||||||
— Weighted-average ordinary shares outstanding | 61,109,893 | 61,109,893 | |||||||
Effect of dilutive securities | — | — | |||||||
Denominator for diluted loss per share | 61,109,893 | 61,109,893 | |||||||
Basic loss per share | (0.36 | ) | (0.05 | ) | |||||
Diluted loss per share | (0.36 | ) | (0.05 | ) |
(11) | Related-Party Transactions |
a) Amounts due from related parties: |
December 31, | |||||||||||||
2006 | March 31, 2007 | ||||||||||||
RMB | RMB | US$ | |||||||||||
Prepayments for material purchases | 4,857,752 | 4,681,683 | 606,184 | ||||||||||
Other | 8,300,000 | 10,320,697 | 1,336,324 | ||||||||||
Total amounts due from related parties | 13,157,752 | 15,002,380 | 1,942,508 | ||||||||||
F-70
Table of Contents
Prepayments for material purchases |
Other |
December 31, | |||||||||||||
2006 | March 31, 2007 | ||||||||||||
RMB | RMB | US$ | |||||||||||
Borrowings from related parties | (31,849,352 | ) | (28,570,049 | ) | 3,699,250 | ||||||||
Payables to related parties | (1,991,793 | ) | (1,801,782 | ) | 233,295 | ||||||||
Total | (33,841,145 | ) | (30,371,831 | ) | 3,932,545 | ||||||||
Borrowings from related parties |
F-71
Table of Contents
Payables to related parties |
(12) | Warranty Cost |
F-72
Table of Contents
Predecessor | |||||||||||||
Three-Month | |||||||||||||
Period Ended | Three-Month Period Ended | ||||||||||||
March 31, 2006 | March 31, 2007 | ||||||||||||
RMB | RMB | US$ | |||||||||||
Beginning balance | 5,013,862 | 20,686,201 | 2,678,449 | ||||||||||
Product warranty expense | 2,033,122 | 4,166,020 | 539,417 | ||||||||||
Warranty costs incurred or claimed | — | — | — | ||||||||||
Ending balance | 7,046,984 | 24,852,221 | 3,217,866 | ||||||||||
(13) | Capital Commitments |
(14) | Income tax |
(15) | Minority Interest |
F-73
Table of Contents
(16) | Capitalized Interest |
Predecessor | ||||||||||||||
Three-Month | ||||||||||||||
Period Ended | ||||||||||||||
March 31, | Three-Month Period Ended | |||||||||||||
2006 | March 31, 2007 | |||||||||||||
RMB | RMB | US$ | ||||||||||||
Interest cost capitalized | 957,052 | 4,572,492 | 592,046 | |||||||||||
Interest charged to income | 4,855,161 | 19,179,997 | 2,483,426 | |||||||||||
Total interest cost incurred | 5,812,213 | 23,752,489 | 3,075,472 | |||||||||||
(17) | Fair Value of Financial Instruments |
(18) | Subsequent events |
F-74
Table of Contents
(19) | Pro Forma Information |
Pro Forma | ||||||||||||||||
March 31, 2007 | Adjustments | Pro Forma March 31, 2007 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Total assets | 3,367,865,596 | — | 3,367,865,596 | 436,071,265 | ||||||||||||
Total current liabilities | 1,080,821,777 | — | 1,080,821,777 | 139,944,812 | ||||||||||||
Mandatory convertible bonds payable to Yingli Power | 361,726,290 | (361,726,290 | ) | — | — | |||||||||||
Mandatory redeemable bonds payable to Yingli Power | 292,459,559 | — | 292,459,559 | 37,867,666 | ||||||||||||
Other non-current liabilities | 16,375,822 | — | 16,375,822 | 2,120,342 | ||||||||||||
Total liabilities | 1,751,383,448 | (361,726,290 | ) | 1,389,657,158 | 179,932,820 | |||||||||||
Minority interest | 401,762,301 | — | 401,762,301 | 52,020,186 | ||||||||||||
Series A redeemable convertible preferred shares | 136,899,386 | (136,899,386 | ) | — | — | |||||||||||
Series B redeemable convertible preferred shares | 929,774,916 | (929,774,916 | ) | — | — | |||||||||||
Shareholders’ Equity | ||||||||||||||||
Ordinary shares — US$0.01 par value | 4,905,175 | 2,937,759 | 7,842,934 | 1,015,503 | ||||||||||||
Additional paid-in capital | 124,110,296 | 1,425,462,833 | 1,549,573,129 | 200,638,742 | ||||||||||||
Accumulated other comprehensive income | 18,138,875 | — | 18,138,875 | 2,348,622 | ||||||||||||
Retained earnings | 891,199 | — | 891,199 | 115,392 | ||||||||||||
Total shareholders’ equity | 148,045,545 | 1,428,400,592 | 1,576,446,137 | 204,118,259 | ||||||||||||
Total liabilities, minority interest, redeemable convertible preferred shares and shareholders’ equity | 3,367,865,596 | — | 3,367,865,596 | 436,071,265 | ||||||||||||
F-75
Table of Contents
Pro Forma Earnings Per Share |
Three-Month Period Ended | ||||||||
March 31, 2007 | ||||||||
RMB | US$ | |||||||
Numerator: | ||||||||
Net loss available to ordinary shares | (22,156,580 | ) | (2,868,834 | ) | ||||
Accretion to Series A and B Preferred Shares redemption value | 30,496,336 | 3,948,666 | ||||||
Interest expense on Mandatory Convertible Bonds payable to Yingli Power | 9,288,890 | 1,202,726 | ||||||
Pro forma net income available to ordinary shareholders | 17,628,646 | 2,282,558 | ||||||
Denominator for pro forma basic income per share Weighted average number of ordinary shares outstanding | 61,109,893 | 61,109,893 | ||||||
Shares issuable upon conversion of: | ||||||||
Series A Preferred Shares | 8,081,081 | 8,081,081 | ||||||
Series B Preferred Shares | 24,405,377 | 24,405,377 | ||||||
Mandatory Convertible Bonds payable to Yingli Power | 5,497,433 | 5,497,433 | ||||||
Denominator for pro forma basic earnings per share | 99,093,784 | 99,093,784 | ||||||
Dilutive effect of stock options and unvested shares | 607,655 | 607,655 | ||||||
Dilutive effect of Series A preferred share warrant | 434,718 | 434,718 | ||||||
Dilutive effect of Series B preferred share warrant | 2,134,284 | 2,134,284 | ||||||
Denominator for pro forma diluted earnings per share | 102,270,441 | 102,270,441 | ||||||
Pro forma earnings per share — basic | 0.18 | 0.02 | ||||||
Pro forma earnings per share — diluted | 0.17 | 0.02 |
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Goldman Sachs (Asia) L.L.C. | UBS Investment Bank | |
Piper Jaffray | CIBC World Markets |
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ITEM 6. | INDEMNIFICATION OF DIRECTORS AND OFFICERS. |
ITEM 7. | RECENT SALES OF UNREGISTERED SECURITIES. |
Underwriting | ||||||||||||||
Date of Sale or | Consideration in | Discount and | ||||||||||||
Purchaser | Issuance | Number of Securities | U.S. dollars | Commission | ||||||||||
Yingli Power Holding Company Ltd. | August 7, 2006 | 50 million ordinary shares | US$500,000 | None | ||||||||||
Yingli Power Holding Company Ltd. | September 25, 2006 | 9.8 million ordinary shares | US$98,000 | None | ||||||||||
Inspiration Partners Limited | September 28, 2006 | 8,081,081 Series A preferred shares | US$17 million(1) | None | ||||||||||
TB Management Ltd. | September 28, 2006 | Warrant to purchase 678,811 ordinary share | No consideration(1) | None | ||||||||||
Yingli Power Holding Company Ltd. | November 13, 2006 | Mandatory convertible bonds with the principal amount of US$47 million | US$47 million | None | ||||||||||
Yingli Power Holding Company Ltd. | November 13, 2006 | Mandatory redeemable bonds with the principal amount of US$38 million | US$38 million | None |
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Underwriting | ||||||||||||||
Date of Sale or | Consideration in | Discount and | ||||||||||||
Purchaser | Issuance | Number of Securities | U.S. dollars | Commission | ||||||||||
Baytree Investments (Mauritius) Pte Ltd. and 13 other investors | During the period from December 20, 2006 through January 13, 2007 | 24,405,377 Series B preferred shares | US$118 million(2) | None | ||||||||||
Baytree Investments (Mauritius) Pte Ltd. and ten other investors | During the period from December 20, 2006 through January 13, 2007 | Warrants to purchase 2,112,057 ordinary shares | No consideration(2) | None | ||||||||||
Baytree Investments (Mauritius) Pte Ltd. and ten other investors | On or about March 27, 2007 | Warrants to purchase 688,090 ordinary shares | No consideration(3) | None | ||||||||||
China Sunshine Investment Co., Ltd. | December 29, 2006 | Warrant to purchase 2,068,252 ordinary shares | No consideration(4) | None |
(1) | US$211,341 of the consideration paid for the Series A preferred shares has been allocated on a relative fair value basis to the warrant issued to TB Management Ltd., an affiliate of Inspiration Partners Limited. See “Restructuring — Private Equity Investments and Other Financings Following the Restructuring” in the prospectus which forms part of this registration statement. TB Management Ltd. has since transferred the warrant to Fairdeal Development Ltd., an affiliate of Inspiration Partners Limited, which exercised the warrant on May 23, 2007. |
(2) | US$887,064 of the consideration paid for the Series B preferred shares has been allocated on a relative fair value basis to the warrant issued to Baytree Investments (Mauritius) Pte Ltd. and ten other Series B investors. See “Restructuring — Private Equity Investments and Other Financings Following the Restructuring” in the prospectus which forms part of this registration statement. |
(3) | The warrants were issued in consideration of the early termination of an escrow arrangement which removed the restriction on the proceeds of US$19.6 million that were received from the issuance and sale of the Series B preferred shares that took place from December 20, 2006 through January 13, 2007. |
(4) | The warrant was issued to China Sunshine Investment Co., Ltd. pursuant to the repayment agreement, dated December 29, 2006, among us, Tianwei Yingli, China Foreign Economic and Trade Trust & Investment Co., Ltd. and China Sunshine Investment Co., Ltd. We recorded US$599,000 representing the fair value of the warrant as part of the cost to extinguish the convertible loan. See “Restructuring — Private Equity Investments and Other Financings Following the Restructuring” in the prospectus which forms part of this registration statement. |
ITEM 8. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULE |
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ITEM 9. | UNDERTAKINGS. |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; | |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; | |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and | |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
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YINGLI GREEN ENERGY HOLDING COMPANY LIMITED | |
By: /s/Liansheng Miao | |
Name: Liansheng Miao |
Title: | Chairperson of the Board, Chief Executive Officer |
Signature | Title | |||
/s/Liansheng Miao | Chairperson of the Board/Chief Executive Officer (principal executive officer) | |||
/s/* | Chief Financial Officer (principal financial and accounting officer) | |||
/s/* | Director | |||
/s/* | Director | |||
/s/* | Director | |||
* By: /s/Liansheng Miao Attorney-in-Fact |
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Authorized U.S. Representative | |
Law Debenture Corporate Services Inc. |
By: | /s/Jasmine Marrero |
Name: Jasmine Marrero | |
Title: Manager |
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Exhibit | ||||
Number | Description of Document | |||
1 | .1* | Form of Underwriting Agreement | ||
3 | .1* | Second Amended Memorandum and Articles of Association of the Registrant, as currently in effect | ||
3 | .2* | Form of the Third Amended and Restated Memorandum and Articles of Association of the Registrant | ||
4 | .1* | Form of Registrant’s American Depositary Receipt (included in Exhibit 4.3) | ||
4 | .2* | Registrant’s Specimen Certificate for Ordinary Shares | ||
4 | .3* | Form of Deposit Agreement among the Registrant, the depositary and Owners and Beneficial Owners of the American Depositary Shares issued thereunder | ||
4 | .4* | Series A Preferred Share Purchase Agreement, dated as of September 20, 2006, among the registrant and Inspiration Partners Limited, Yingli Power Holding Company Ltd. and Liansheng Miao | ||
4 | .5* | Series A Preferred Shareholders Agreement, dated as of September 20, 2006, among the registrant and Inspiration Partners Limited, Yingli Power Holding Company Ltd. and Liansheng Miao | ||
4 | .6* | Amendment Agreement, dated as of September 28, 2006, among the registrant and the parties thereto, amending the Series A Preferred Shares Purchase Agreement and the Series A Preferred Shareholders Agreement | ||
4 | .7* | Ordinary Shares Purchase Warrant, dated as of September 28, 2006, issued to TB Management Ltd. | ||
4 | .8* | Trust Deed, dated as of November 13, 2006, between the registrant and DB Trustees (Hong Kong) Limited, as trustee | ||
4 | .9* | Subscription Agreement, dated as of November 13, 2006, between the registrant and Yingli Power Holding Company Ltd. | ||
4 | .10* | Amended and Restated Series B Preferred Share Purchase Agreement, dated as of December 15, 2006 by and among the Registrant, Yingli Power Holding Company Ltd., Liansheng Miao and the investors listed on Schedule I thereto | ||
4 | .11* | Second Amended and Restated Shareholders Agreement, dated as of December 15, 2006 by and among the Registrant, Liansheng Miao, Yingli Power Holding Company Ltd., Inspiration Partners Limited and the investors listed on Schedule I thereto | ||
4 | .12* | Warrant Side Letter, dated December 20, 2006, by and between the Registrant and Baytree Investments (Mauritius) Pte Ltd. | ||
4 | .13* | Form of Ordinary Shares Purchase Warrant issued to certain Series B preferred shareholders | ||
4 | .14* | Ordinary Shares Purchase Warrant, dated as of December 29, 2006, issued to China Sunshine Investment Co., Ltd. | ||
4 | .15* | Amendment No. 1 to the Amended and Restated Series B Preferred Share Purchase Agreement and Warrant Side Letter, dated as of March 9, 2007, by and among the Registrant, Yingli Power Holding Company Ltd., Liansheng Miao and Baytree Investments (Mauritius) Pte Ltd. | ||
4 | .16* | Agreement, dated May 21, 2007, among the Registrant, Yingli Power, Mr. Liansheng Miao and Baytree Investments (Mauritius) Pte Ltd. | ||
4 | .17* | Trust Deed, dated January 19, 2007, between the Registrant and DBS Trustee Limited relating to the Registrant’s 2006 Stock Incentive Plan Restricted Stock Award Agreement | ||
5 | .1* | Form of Opinion of Conyers Dill & Pearman regarding the validity of the ordinary shares being registered | ||
5 | .2* | Form of Opinion of Fangda Partners regarding the approval by the China Securities Regulatory Commission of an overseas listing |
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Exhibit | ||||
Number | Description of Document | |||
8 | .1* | Form of Opinion of Conyers Dill & Pearman regarding certain Cayman Islands tax matters | ||
8 | .2* | Form of Opinion of Simpson Thacher & Bartlett LLP regarding certain U.S. tax matters | ||
8 | .3* | Undertaking by the Cayman Islands government as to tax concessions | ||
10 | .1* | 2006 Stock Incentive Plan | ||
10 | .2* | Form of Employment Agreement between the Registrant and an Executive Officer of the Registrant | ||
10 | .3* | Joint Venture Contract of Baoding Tianwei Yingli New Energy Resources Co., Ltd., dated August 25, 2006, and Supplemental Contracts Nos. 1, 2 and 3 thereto, dated October 10, 2006, November 13, 2006 and December 18, 2006, respectively | ||
10 | .4* | Sales Contract, dated November 28, 2006, between Baoding Tianwei Yingli New Energy Resources Co., Ltd. and Sunline AG | ||
10 | .5* | Loan Contract For Consignment Loan, dated September 25, 2006, between Baoding Tianwei Yingli New Energy Resources Co., Ltd. (“Tianwei Yingli”) and Agricultural Bank of China Baoding Sanfeng Branch | ||
10 | .6* | Maximum Amount Guarantee Contract, dated December 20, 2005, between Baoding Tianwei Baobian Electric Co., Ltd. (“Tianwei Baobian”) and Bank of Communications, Shijiazhuang Branch | ||
10 | .7* | Guarantee Contract, dated February 6, 2007, between Tianwei Baobian and Bank of Communications, Shijiazhuang Branch | ||
10 | .8* | Maximum Amount Guarantee Contract, dated March 30, 2005, between Tianwei Baobian and China CITIC Industry Bank, Shijiazhuang Branch | ||
10 | .9* | Maximum Amount Guarantee Contract, dated August 11, 2005, between Tianwei Baobian and China CITIC Industry Bank, Shijiazhuang Branch | ||
10 | .10* | Maximum Amount Guarantee Contract, dated February 6, 2007, between Tianwei Baobian and China CITIC Bank, Shijiazhuang Branch | ||
10 | .11* | Guarantee Contract, dated December 21, 2005, Tianwei Baobian and China Construction Bank Corporation, Baoding Tianwei West Road Sub-branch | ||
10 | .12* | Guarantee Contract, dated February 17, 2006, between Tianwei Baobian and China Construction Bank Corporation, Baoding Tianwei West Road Sub-branch | ||
10 | .13* | Maximum Amount Guarantee Contract, dated September 26, 2005, Tianwei Baobian and China Everbright Bank, Shijiazhuang Sub-branch | ||
10 | .14* | Maximum Amount Guarantee Contract, dated February 1, 2007, between Tianwei Baobian and China Everbright Bank, Shijiazhuang Sub-branch | ||
10 | .15* | Guarantee Contract, dated September 2005, between Tianwei Baobian and Export-Import Bank of China | ||
10 | .16* | Maximum Amount Guarantee Contract, dated September 6, 2005, between Tianwei Baobian and Huaxia Bank Co., Ltd., Shijiazhuang Branch | ||
10 | .17* | Maximum Amount Guarantee Contract, dated December 20, 2006, between Baoding Tianwei Group Co., Ltd. (“Tianwei Group”) and Bank of China Limited., Baoding Yuhua Sub-branch | ||
10 | .18* | Product Supply Contract, dated January 12, 2006, between Baoding Yitongguangfu Technical Co., Ltd. and Tianwei Yingli | ||
10 | .19* | Sports Ground Laying Contract, dated May 5, 2006, between Tianwei Yingli and Baoding Yingli Municipal Public Facilities Company | ||
10 | .20* | Baoding Yingli Municipal Public Facilities Company Contract, dated May 26, 2006, between Baoding Yingli Municipal Public Facilities Company and Tianwei Yingli | ||
10 | .21* | Purchase and Sale Contract between Tianwei Yingli and Baoding Tianwei Fu Le Metal Accessories Co., Ltd., effective from October 10, 2006 through January 10, 2007 |
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Exhibit | ||||
Number | Description of Document | |||
10 | .22* | Purchase and Sale Contract between Tianwei Yingli and Baoding Tianwei Fu Xing Aluminum Co., Ltd. | ||
10 | .23* | Supply Contract, dated January 17, 2006, between Tianwei Yingli and Baoding Maike Green Food Co., Ltd. | ||
10 | .24* | Agreement, dated May 17, 2006, between Tianwei Yingli and China Foreign Economic and Trade Trust & Investment Co., Ltd. | ||
10 | .25* | Repayment Agreement, dated December 29, 2006, among Tianwei Yingli, China Foreign Economic and Trade Trust & Investment Co., Ltd., the registrant and China Sunshine Investment Co., Ltd. | ||
10 | .26* | Solar Power Photovoltaic Modules Supply Contract, dated February 26, 2007, between Tianwei Yingli and Unitec Europa, S.A. | ||
10 | .27*†† | Supply Agreement, dated as of November 9, 2006, between Acciona Energía S.A. and Tianwei Yingli | ||
10 | .28*†† | Sale and Purchase Agreement, dated as of March 7, 2007, between Sinolink Development Limited and Tianwei Yingli | ||
10 | .29*†† | Supply Agreement, dated November 13, 2006, between Wacker Chemie AG and Tianwei Yingli | ||
10 | .30*†† | Supply Agreement, dated August 10, 2006, between Wacker Chemie AG and Tianwei Yingli | ||
10 | .31* | Purchase Agreement, dated April 10, 2007, between Sichuan Xinguang Silicon Science and Technology Co., Ltd. and Tianwei Yingli | ||
10 | .32* | Amendment No. 1 to Yingli Green Energy Holding Company Limited 2006 Stock Incentive Plan | ||
10 | .33* | Sales Contract, dated May 17, 2007, between Tianwei Yingli and Laxtron Energías Renovables | ||
10 | .34 | Sales and Purchase Contract, dated April 23, 2007, between Tianwei Yingli and Komex Inc. | ||
21 | .1* | Subsidiaries of the Registrant | ||
23 | .1* | Consent of KPMG | ||
23 | .2* | Consent of Conyers Dill & Pearman (incorporated by reference in the form of opinion filed as Exhibit 5.1 to this registration statement) | ||
23 | .3* | Consent of Fangda Partners (incorporated by reference in the form of opinion filed as Exhibit 5.2 to this registration statement) | ||
23 | .4* | Consent of Simpson Thacher & Bartlett LLP (incorporated by reference in the form of opinion filed as Exhibit 8.2 to this registration statement) | ||
24 | .1* | Powers of Attorney | ||
99 | .1* | Code of Business Conduct and Ethics | ||
99 | .2* | Consent of Solarbuzz | ||
99 | .3* | Consent of American Appraisal China Limited | ||
99 | .4* | Consent of Iain Ferguson Bruce | ||
99 | .5* | Consent of Jiesi Wu | ||
99 | .6* | Consent of Chi Ping Martin Lau |
* | Filed previously. |
†† | Confidential treatment has been requested for portions of this agreement. |
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