Why Yingli Green Energy Hold. Co. Ltd. Shares Popped Today

May 22, 2014 by  
Filed under Green Energy News

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    Steve Symington

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    Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.

    What: Shares of Yingli Green Energy Hold. Co. Ltd. (NYSE: YGE  )  jumped more than 12% Wednesday after the Chinese solar specialist announced trial production of a new technology.

    So what: Yingli Green Energy today announced that, with the help of equipment provided by Formula E s.r.l. and installed in one of its module workshops, it has begun trial production of monocrystalline silicon modules with N-type Metal-Wrap-Through, or “N-MWT,” technology. Formula E designed and produced the manufacturing equipment as part of the two companies’ strategic collaboration agreement.

    Yingli states N-MWT technology “reduces power loss in the module encapsulation process and improves cell efficiency by reducing the amount of metal applied to each solar cell, which exposes more of the solar cell’s surface area to sunlight than with traditional monocrystalline technologies.”

    Now what: Remember this is still in a pilot production line, so N-MWT shouldn’t be considered a near-term catalyst to drive Yingli’s top and bottom lines. Down the road, however, this new tech could effectively differentiate Yingli’s offerings from increasingly steep competition in the solar space. 

    Separately, Yingli shares are also likely benefiting from a broader climb in solar stocks resulting from Trina Solar‘s stellar first-quarter earnings today. Yingli, for its part, hasn’t scheduled its own first-quarter release, but should be set to report within the next few weeks.

    For now, I still prefer avoiding the practice of trading around earnings, so don’t mind waiting until Yingli’s report to make a more informed decision. But last quarter, management did say they expect to hit “breakeven through the end of Q2 and start to make a profit from early Q3.” If Yingli shows adequate progress toward that goal, shares could certainly rise more from here.

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