Analyst: JohnPaul Bennett Thursday, November 19, 2009

Stock Price $ week range $2.50 – Market Cap $ billion Beta 3.8 IMP Portfolio currently holds 0 shares of YGE Current Stock Price: YGE

Intrinsic Valuation Fair Value Estimate$15.00 Consider Buying$7.50 Consider Selling$30.00

 Sector: Technology  Industry: Semiconductor- Integrated Circuits  Yingli Green Energy Holding Company Limited and its subsidiaries engage in the design, development, marketing, manufacturing, installation, and sale of photovoltaic (PV) products in the People's Republic of China and internationally.  Its products include multicrystalline polysilicon ingots and wafers, PV cells, PV modules, and integrated PV systems.  The company sells its PV modules under Yingli and Yingli Solar brand names to PV system integrators and distributors, as well as to installers, installers, and other value-added resellers.  It also sells PV systems to mobile communications service providers in the People's Republic of China.  The company was founded in 1998 and is headquartered in Baoding, the People’s Republic of China. Company Overview

What is photovoltaic (PV) Solar photovoltaics (PVs) are arrays of cells containing a material that converts solar radiation into direct current electricity Photovoltaic production has been doubling every 2 years, increasing by an average of 48 percent each year since 2002, making it the world’s fastest- growing energy technology Solar electricity is not available at night and is less available in cloudy weather conditions from conventional silicon based-technologies

SWOT Analysis

Valuation Ratios StockS&P 500 P/E P/B P/S Dividend Yield % StockS&P 500 Forward P/E PEG Ratio0.81.8

Valuation Company will remain at the front of the industry cost curve in the coming years The creation of a very large solar market in China will occur in the next two years, and the company's status as a domestic industry leader will allow it to be a major winner in this space The company will be able to reduce its costs (namely its silicon costs) as its panel prices decline, offsetting the margin pressure that has hurt results in recent quarters From 2010 to 2014, we are projecting annual sales growth of 28%

Risk Panel demand has fallen dramatically since the fall of 2008, greatly reducing Yingli's growth and profitability Industry still has too much capacity for current demand levels, we believe further falls in selling prices are all but certain in the coming quarters First Solar has demonstrated alternative forms of solar generation are cost-competitive with silicon-based solar. Possible loss of cost leadership. Solar panels are a commodity product, and continued cost-cutting and technology innovation are critical to Yingli's continued growth

Management Well-qualified and has appropriate manufacturing and solar PV experience to run the company Liansheng owns 42% of outstanding shares, further ensuring him a position of dominance relative to other board members and executives

Profitability Industry downturn of recent quarters has caused a loss in Yingli's profitability Firm has strong cost structure which allowed it to remain profitable Falling price of silicon will give Yingli a jolt in profitability, lowering silicon as a percentage of cost of goods sold from 70% to 48% The company buys about half its silicon needs on the spot market, which will allow it to take advantage of the tumbling prices and boost its profitability in the coming quarters

Financial Health Aggressive capital expenditure plans and high debt levels cause concern Currently has about $759 million in debt and $200 in cash, a ratio which is likely to worsen in coming quarters given the construction of its silicon plant and estimated $360 million in planned capital expenditures in 2009 Yingli's financial health is fine, as the company has about $1 billion in borrowing capacity in the form of unused credit facilities with major Chinese-run banks Chinese government is ready to throw its weight behind its domestic solar industry, and will backstop any financing needs of the major players in coming years Confident the company's debt load will not pose an issue in the near term

3 rd Quarter Results and Highlights Total net revenues were RMB 2,225.2 million (US$326.0 million) and PV module shipment volume increased more than 80% quarter over quarter Gross profit was RMB million (US$65.6 million), with a gross margin of 20.1% Operating income was RMB million (US$35.6 million), with an operating margin of 10.9 % Net income(1) was RMB million (US$17.7 million) and diluted earnings per ordinary share and per American depositary share ("ADS") was RMB 0.79 (US$0.12) On an adjusted Non-GAAP(2) basis, net income was RMB million (US$27.0 million) and diluted earnings per ordinary share and per ADS was RMB 1.20 (US$0.18).

Reason for investing... Vertically integrated from silicon ingot creation through solar panel assembly so as to avoid purchasing wafers from third-party suppliers Low cost structure- by improving panel technology and production methods Industry leader, able to perform strong when industry is suffering Alternative energy is developing trend in developing economies/countries China is major supporter of green technologies, heavy investments into solar and wind projects in order to be global leader in green technologies In-house operations In position to see huge growth and return on investment

Recommendation Buy 4-5% Classify as Energy stock, as majority operations are in-house 2 nd Recommendation Sell WFT YTD Return: 84.2% Holding Return: -23% Cash in