Yingli Green Energy (YGE) Bucks The Trend, Beats On EPS; Now My Top China Solar Stock

I was out Friday so missed the Yingli Green Energy (YGE) earnings report.  The company surprised Friday morning by beating analyst estimates by a fairly wide margin on both the top and bottom line.  What we’ve been seeing across the board in the solar sector are decent revenues, but big cuts in EPS with companies missing analyst estimates.  Yingli managed to buck the trend posting an EPS of .34/share (vs the estimate for .28/share) on revenues of $680 million (vs the estimate for $616 million).  That’s good for quarter over quarter growth of 36% and 71% respectively.  Throw in record shipments and it all adds up to a real nice quarter out of YGE. 

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"I’m pleased to announce that we had our best quarter ever in terms of PV module shipments, which increased by 36.6% over the previous quarter. With the significantly increased shipments, we managed not only to expand our global market share, but also to extend our sales geographies," commented Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy.

Here are highlights of additional comments made by the CEO

– market conditions improving as module prices drop

– becoming leading module supplier in North American and expects to capture 15% of market by end of year

– with nation feed-in-tariff in China, expecting stronger growth

– has added another 700MW in capacity which should be fully operational by end of year

– for the full year, the company is reiterating its shipment guidance of 1.7 – 1.75GW.

Yingli’s earnings report is the best I’ve seen this quarter from the solar sector, but yet the stock still closed down on Friday.  It’s reversing course today with a series of upgrades and Yingli moves to the front of the line for me in terms of China solar stocks to buy once I see more signals that a bottom may be in.  It’s still just a bit early to be jumping into these stocks, but the time may come soon.

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