NEW YORK (TheStreet) -- Shares of Yingli Green Energy Hold. Co. (YGE) are up 3.87% to $3.49 in mid-morning trading on Monday, after the company announced it will be supplying 31.6 megawatts of solar modules for a solar power plant in Japan.
The deal is between Gestamp Solar, a leading Spanish developer and operator of utility-scale photovoltaic systems for a solar power plant in Daigo, Japan, and Yingli Solar’s wholly owned subsidiary, Yingli Green Energy Spain.
The company will deliver modules to Gestamp from October 2014 to February 2015.
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 some concerns, 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, poor profit margins and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is very high at 105.47 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 0.50, 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 rather low; currently it is at 15.68%. 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 -12.72% significantly underperformed when compared to the industry average.
- YGE has underperformed the S&P 500 Index, declining 7.70% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- YINGLI GREEN ENERGY HLDGS CO has improved earnings per share by 44.4% 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 year. 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 (-$0.46 versus -$2.05).
- You can view the full analysis from the report here: YGE Ratings Report