Shares of Yingli Green Energy (YGE) are holding steady this morning despite the Sell rating by Hapoalim Securities.
The analyst comment below courtesy of StreetInsider.com
“After updating our model to include: (1) higher ASPs (inline w/YGE’s guidance),(2) higher shipments (above YGE’s guidance), & (3)lower poly-Si sourcing costs (which implies YGE works thru the majorityof its excess poly-Si inventory), we are still below the Street forC3Q09; given our analysis suggests consensus is underestimating YGE’sminority interest & OPEX expenses, we see risk of neg. EPSrevisions on the horizon…Despite a number of aggressive newassumptions/updates to our bottom-up YGE segment model (i.e., higherASPs, higher shipments, quicker costs saves, & capacity ramping to900MW in CY10), we are still notably below consensus EPS ests forC3Q09, CY09, & CY10; in short, where our model diverges from theStreet is in our forecasts for YGE’s minority interest & OPEXexpenses in 2H09/CY10, as well as the company’s CY10 ASPs; given YGE’sshare price outperformance YTD (+99.8% YTD vs. +18.3% for S&P 500),we see outsized risk to the company’s forward valuation multiple aheadof Friday’s (11/13/09) pre-market earnings report.”
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