Yingli Tumbles as U.S. Seeks China Solar Import CurbBelinda Cao and Edith Waringa Kamau
Yingli Green Energy Holding Co. led a weekly decline among the most-traded Chinese solar manufacturers in New York on concern their profits will be hurt as the U.S. seeks to curb imports.
Yingli, the world’s biggest solar-panel maker, fell 9.1 percent in the five days through Aug. 1, ending a two-week streak of gains. It was the worst performer on the Bloomberg China-US Equity Index of the country’s most-traded shares in the U.S, which dropped 1.7 percent to 112.79. Trina Solar Ltd. declined 5.3 percent.
Stocks fell as the producers face an increase in U.S. anti-dumping tariffs after the Commerce Department issued a preliminary finding July 25 that said some companies in China and Taiwan sold their products in the U.S. at unfairly low prices. Solar component prices have been hurt by a supply glut. Average spot prices for modules, which have been tumbling since October, last week slid to the lowest since at least January 2010, data compiled by Bloomberg show.
“The ruling is likely going to pressure the margins for a number of China solar names here in the coming quarter,” Angelo Zino, an analyst at S&P Capital IQ in New York, said by phone on Aug. 1. “That’s going to be negative for the total space and negative for the demand landscape. At this point, given where the shares are trading, at least with regards to Trina, I think it’s largely reflected in the stock prices already.”
Trina, China’s largest profitable solar panel manufacturer, trades at 7.8 times projected 12-month earnings, data compiled by Bloomberg show. That compares with an average multiple of 18.8 among the 17 members of the Bloomberg Global Large Solar Index.
The U.S. called for duties as high as 165 percent for some Chinese companies and 44 percent for those in Taiwan in the ruling, which is subject to a final decision in mid December. The U.S. unit of SolarWorld AG accused some Chinese companies of shifting production to Taiwan after they lost a similar case in 2012.
The Bloomberg Large Solar Index posted its biggest weekly slump since April, tumbling 7.3 percent. Shanghai-based JA Solar Holdings Co. plunged 11 percent to an seven-month low of $8.49.
Yingli’s ADRs slumped to $3.18, a three-week low. Trina sank to $10.76, the lowest price since May 20.
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., advanced 1.3 percent to $40.72, extending gains into a third week. The Standard & Poor’s 500 Index dropped 2.7 percent.
The Hang Seng China Enterprises Index slipped 0.1 percent in the five days through Aug. 1 to 10,982.65, after rising in previous two weeks. The Shanghai Composite Index rallied 2.8 percent to 2,185.30 in a third week of gains.