Yingli Tumbles After Worse-Than-Expected Loss as Europe WeighsStephen Stapczynski and Belinda Cao
Yingli Green Energy Holding Co., which hasn’t made money since 2011, dropped the most in more than three years in New York after reporting a worse-than-expected fourth quarter loss as it struggles to boost business in Europe.
The company, which fell into second place among the world’s solar-panel producers, plunged 15 percent to $1.99. Trina Solar Ltd., which overtook Yingli as the biggest panel maker, lost 4.3 percent. Daqo New Energy Corp., a producer of polysilicon, fell 5.7 percent. The Bloomberg China-US Equity Index slipped 1.2 percent, ending seven days of gains.
Baoding, China-based Yingli reported a net loss of 550 million yuan ($88.7 million), its 14th consecutive quarterly loss and more than triple the average projection of analysts surveyed by Bloomberg. Fourth-quarter revenue, which declined 7 percent, also missed estimates. The company is generating more sales from the less profitable Chinese market as European demand shrinks amid lower government subsidies.
“The challenge is margin expansion,” David Smith, a portfolio manager of the GCA Sustainable Growth Fund at Greentech Capital Advisors in New York, said by e-mail. “A shrinking European market, where they’ve invested a lot, could mean their profitability is impaired versus their peers.”
The company forecast a gross margin for the current quarter of between 14 percent and 16 percent, compared with 15.7 percent a year earlier and 16.8 percent at the end of 2014.
Yingli shipped 3.36 gigawatts of panels last year, up 4 percent from 3.23 gigawatts in 2013, the company said Wednesday in a statement. That trailed Trina Solar, which became the number one solar-panel producer after 2014 shipments rose 42 percent to 3.66 gigawatts.
Europe represented just 20 percent of global solar demand in 2013, down from 63 percent in 2011, as European countries cut subsidies and set low targets. Subsidy support for solar energy is waning after a period of high growth from 2010 to 2012, according to Bloomberg Intelligence.
Solar demand in Europe has been “negatively impacted” by the termination or decline of government-backed feed-in tariffs, Darren Thompson, Managing Director of Yingli Europe, said on a March 25 earnings call.
Yingli reported a loss of 49 cents per American depositary share. Excluding some items, the median estimate of four analysts surveyed by Bloomberg was for a 12-cent loss. None of the seven analysts covering the stock recommend buying.
Chinese solar stocks were boosted earlier this month after the government raised its 2015 solar installation capacity target by 19 percent. JA Solar Holdings Co., which benefited from contracts awarded overseas, is poised to have their largest monthly gain since September 2013.
Trina Solar retreated to $12.07 and Daqo New Energy traded at $26.83.
Pingtan Marine Enterprise Ltd., a marine services operator, fell 10 percent to $2.12, a 13 week low, after reporting that Indonesia’s new measures to combat illegal fishing activities have negatively affected its recent production. Pingtan’s licensed fishing vessels have been operating within the strict guidelines since they were set by the Indonesian government, the company said in a March 25 statement.
The Deutsche X-trackers Harvest CSI 300 China A-Shares ETF, the largest U.S. exchange-traded fund that tracks mainland Chinese stocks, fell 1.5 percent to $40.17. The iShares China Large-Cap ETF, the largest Chinese ETF in the U.S. tracking Hong Kong shares, declined 1.1 percent to $42.51.