Why Yingli Green Energy’s Shares Popped

August 9, 2013 by  
Filed under Green Energy News

Travis Hoium

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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 solar manufacturer Yingli Green Energy (NYSE: YGE  ) rose as much as 11% in early trading after announcing preliminary second-quarter results.

So what: Module shipments grew at 23%-24% from a previous guidance increase in the low to middle teens. Gross margin is expected to be 11%-12%, a solid improvement from 9%-11% guidance.  

Now what: Earnings will be released Aug. 30, when we’ll find out how close Yingli got to a profit in the quarter. This is one of the most indebted solar manufacturers; I doubt even a 12% gross margin will bring the company to a profit, which will be the long-term challenge. The figures today are a plus, but I will not be a buyer because of Yingli’s debt load and the drag that it will have on potential profits.

Interested in more info on Yingli Green Energy? Add it to your watchlist by clicking here.

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