Yingli Green Energy Holdings Company Limited (NYSE: YGE) is a fully integrated Chinese solar company that designs and manufactures photovoltaic sales and then designs and installs arrays. That complete integration gives them a real competitive advantage in that they’re one stop shopping for all things solar.
They’re also well positioned to capitalize on the continued growth for renewable energy in both <st1:country-region w:st="on"> China </st1:country-region> , where <st1:city w:st="on"> Beijing </st1:city> is working towards a greener image for the 2008 Olympics, and <st1:place w:st="on"> Europe </st1:place> which is on the forefront of green energy.
Despite being a major player in the solar field, Yingli has taken a hit in the markets recently for a couple of reasons.
First, they’re a Chinese company has there’s been renewed speculation about a China bubble as the countries central bank continues to raise interest rates to fight off inflation and speculation. But an ever greater percentage of the company’s sales are to European entities, so their dependence on the health of the Chinese markets continues to fall.
There has also been some concern about the potentially dilutive effective of a recently announced offering of ten million ADS shares. The reality of the situation is that of those ten million shares, seven million were already owned by insiders and accounted for in the company’s total float, so only three million shares are actually new. And that three million is a very small percentage of the company’s total outstanding stock, so the dilutive effect is being exaggerated.
The upside to that is that it creates an opportunity to skim a few bucks as the markets again realize the real value of these shares and prices return to normal. And with the solid earnings and growth the company continues to report, a favorable revaluation shouldn't be far off.
$28.05 (11/13/07)
