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Axiom On Yingli Green Energy: The Party Is Over

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Axiom On Yingli Green Energy: The Party Is Over
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Yingli Green Energy Holding Co Ltd (ADR) (NYSE: YGE) is likely to report its Q3 EBIT in the red, and this could worsen in 2017, Axiom’s Gordon L. Johnson said in a report. He maintained a Sell rating on the company, citing renewing solvency concerns.

Profits Unlikely To Repeat

Yingli Green Energy reported its 2Q16 revenue at $379.8 million, massively missing the Axiom estimate of $800.8 million. EPS came in at $0.59, versus the Axiom and Street estimates of -$0.40 and -$0.36, respectively.

Analyst Johnson commented that the company’s 1H16 profitability “is unlikely to repeat.” China has imposed a PV demand freeze in 2H16 giving, while newly established PV capacity is already surpassing demand in 2016.

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Johnson further mentioned that the market is overcrowded and recent checks had suggested continued decline in the already record-low ASPs. Yingli Green Energy’s EBIT is likely to return to the red, declining to an estimated -$9.4 million in 3Q16. The EPS estimate for 2016 has been reduced from -$1.34 to -$1.72, and this is expected to worsen to an estimated -$10.44 in 2017.

Thus, there is likely to be “renewed investor concern surrounding YGE’s solvency,” the analyst commented, while adding that Yingli Green Energy does not have a takeout bid.

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Latest Ratings for YGE

DateFirmActionFromTo
Nov 2016Axiom CapitalDowngradesBuySell
Nov 2016Credit SuisseAssumesUnderperform
Oct 2016Axiom CapitalUpgradesSellBuy

View More Analyst Ratings for YGE
View the Latest Analyst Ratings

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