Why China Ming Ying Wind Power Group (MY) Stock Is Higher On Wednesday

NEW YORK (TheStreet) -- Shares of China Ming Yang Wind Power Group (MY) are higher by 6.39% to $2.83 on Wednesday after the company reported an increase in revenue and earnings for the 2014 first quarter.

The wind turbine manufacturer in China said total revenue for the most recent quarter was $196.9 million compared to the previous year's first quarter revenue of $129.7 million.

Income for the 2014 first quarter was $29.9 million versus $0.7 million reported for the year ago quarter.

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The company posted 25 cents per basic share and 24 cents per diluted share for the latest quarter, compared to 3 cents per basic and diluted share for the 2013 first quarter.

TheStreet Ratings team rates CHINA MING YANG WIND PWR-ADR as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate CHINA MING YANG WIND PWR-ADR (MY) a SELL. This is driven by multiple 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 feeble growth in its earnings per share, deteriorating net income and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CHINA MING YANG WIND PWR-ADR has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, CHINA MING YANG WIND PWR-ADR reported poor results of -$0.68 versus -$0.37 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electrical Equipment industry. The net income has significantly decreased by 195.4% when compared to the same quarter one year ago, falling from -$23.05 million to -$68.09 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Electrical Equipment industry and the overall market, CHINA MING YANG WIND PWR-ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • MY, with its decline in revenue, underperformed when compared the industry average of 6.4%. Since the same quarter one year prior, revenues fell by 35.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • MY's debt-to-equity ratio of 0.78 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.80 is weak.
  • You can view the full analysis from the report here: MY Ratings Report
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