China Ming Yang Wind Power (MY) Misses Badly, But Bounce Coming?

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10:05:43 am on August 16, 2011

It’s been a mighty rough go for any stock related to wind energy and China Ming Yang (MY) is no exception as the stock continues to drift lower and lower.  It’s latest earnings report isn’t providing any help.  The company, while profitable, missed analyst estimates by a wide margin reporting an EPS of .10/share (vs estimate for .20) on revenue of $217 million (vs estimate of $240 million.  The more than two year streak of sequential growth ended in Q1 and this quarter represents the first quarter of no quarter over quarter growth in quite a long time.  Clearly, this is a company that has been going backwards, but has the stock already fully priced that in?  It wouldn’t appear so judging by today’s action, but this is still a profitable company that has been hammered.  You have to believe that some kind of decent bounce is coming.

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Here are some highlights of comments made by CEO Chuanwei Zhang:

– 1.5MW wind towers continue to see strong demand
– maintained gross margin of 19% despite tough pricing environment
– development of China wind power industry has entered crucial stage, shifting from size and speed to quality and efficiency
– company not beset by problems of other wind turbine manufacturers who deal with excess inventory, lack of quality and lack of cost management (you wouldn’t know it by your stock price Mr Zhang!)
– expects to grow market share this year and beyond

The company did not give guidance on revenues and EPS, but expects market share of 9 – 10% for this year.  Shares hit a new all time low this morning, before recovering a bit. 

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