Hapoalim Securities Raises YGE’s 2010 Estimates on Stronger Euro and Higher Shipment Assumptions
Analysts at Hapoalim Securities maintain their "sell" rating on Yingli Green Energy Holding Co Ltd (NYSE: YGE), while raising their estimates for the company. The target price for YGE is set to $8.
According to Hapoalim Securities, “GE Reports Solid 2Q10 Results. With better-than expected shipment growth of ~15% and ASPs down only slightly, revenue of $398m exceeded our $380m estimate, while gross margins of 33.5% surpassed our 30.6% forecast. Though this was offset partly by a higher-than-expected FX loss and taxes, EPS of $0.21 beat our $0.15 estimate and the Street at $0.19.”
“While management maintained guidance for 2010 shipments between 950 MW-1GW, it noted that it expected ASPs to dip ~5% in 3Q10 and remain flat in 4Q10 as it expects its long-term contracts to prevent it from benefiting fully from stronger spot pricing…. With internal polysilicon production kicking off at Fine Silicon, YGE expects to produce ~400 MT in 2010 and 2,000 MT in 2011. However, ramp-up costs associated with this plant and its recent 400 MW expansion will likely hold up production costs/watt in 2H10, while the amortization of FIFA sponsorship will keep opex elevated through year-end,” the analysts add.
Hapoalim Securities has raised its EPS estimates for 2010 from $0.56 to $0.72 on “(1) the 2Q10 upside, (2) the rebound in the Euro, and (3) higher shipment assumptions due to improved visibility, we nevertheless expect pricing and cost trends to lead to lower earnings in 2H10.”
