NEW YORK (TheStreet) -- Yingli Green Energy Holdings (YGE) stock is gaining Wednesday after the company announced it had begun trial production of monocrystalline silicon modules with N-type Metal-Wrap-Through ("N-MWT") technology. By midmorning, shares had climbed 7.7% to $3.07.
N-MWT technology reduces power loss in the module encapsulation process and improves cell efficiency by reducing the amount of metal applied to each solar cell, therefore exposing more of the cell's surface to sunlight.
"We believe that cost reduction and technology improvement are critical to achieving our mission, which is to provide affordable green energy for all," said vice president Cindy Hu in a statement.
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Separately, TheStreet Ratings team rates YINGLI GREEN ENERGY HLDGS CO as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate YINGLI GREEN ENERGY HLDGS CO (YGE) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is very high at 29.57 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, YGE has a quick ratio of 0.57, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, YINGLI GREEN ENERGY HLDGS CO's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for YINGLI GREEN ENERGY HLDGS CO is currently extremely low, coming in at 12.12%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, YGE's net profit margin of -20.67% significantly underperformed when compared to the industry average.
- Compared to where it was a year ago today, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- YINGLI GREEN ENERGY HLDGS CO has improved earnings per share by 35.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, YINGLI GREEN ENERGY HLDGS CO continued to lose money by earning -$2.05 versus -$3.13 in the prior year. This year, the market expects an improvement in earnings (-$0.44 versus -$2.05).
- You can view the full analysis from the report here: YGE Ratings Report