Panoramic view of Rizhao City in China
Rizhao means 'sunshine' in Chinese and 99% of the households in this city in Shandong Province use solar hot water heaters. The traffic and street lights are powered by PV panels.

What's the Matter with Yingling?

Analysis of Chinese silicon solar photovoltaic manufacturer, Yingling Solar Energy

By Dr. Philip Duke

If you believe silicon based photovoltaic solar energy has a bright future, and if you are willing to risk some of your hard earned dollars on this belief, there is an unusual investment situation that may be of interest to you. The situation involves Yingling Solar Energy, a silicon photovoltaic manufacturer publicly traded on the New York Stock Exchange under the symbol YGE.

YGE is one of many silicon based solar photovoltaic corporations traded as American Depositary Receipts on the NYSE. According to information currently posted on Finance.Yahoo.com, YGE's earnings are $0.663 per share and its Price/Earnings (P.E.) ratio at the current price of 16 is 24, a quite reasonable number for the silicon solar energy sector, which being a new, rapid growth sector comes with corresponding relatively high P.E. multiples. Yahoo finance posts a one year target estimate for YGE's share price of 236.25. Yes, that's no mistake, the number posted on Yahoo Finance is 236.25.

What makes YGE's situation especially interesting, is that the stock price has been dropping rapidly, and continues to drop rapidly. This year's high is 41.50, the low is 11.44, and the current price is about 16. It is not known why the price is dropping so rapidly, but in the absence of any bad news, essentially the following reason has been posted on YGE's Yahoo message board.

(Supposedly) YGE's CEO and Chairman Liansheng Miao is facing probable loss of YGE as the Chinese government proceeds to take over control of YGE, on the basis that it is an important national resource. Miao owns a majority share in YGE, and (supposedly) he is selling his stock to get something for it before it is taken from him. The YGE stock share price is (presumably) falling rapidly for this reason.

I emphasize that I have NO way of knowing if any of this is true. Insider selling such as hypothesized above is required by the SEC to be posted, and there is no such post. I have tried repeatedly to contact YGE Investor Relations about this situation by email at ir@yinglisolar.com without any reply. All that is certain is that YGE's share price is plummeting, YGE's business appears good, and there is at least one person, Phil Duke, who is looking to buy YGE as low as possible.

According to people I have consulted on this presumed situation, it is not in anyone's interest for the stock price to stay depressed, and presumably when Miao's selling is done, the price should rise to a reasonable P.E. multiple. In theory China's recent 20% increase in liquid fuel prices should increase solar's attractiveness in China, the world's largest producer of silicon solar energy devices. In theory the continuing worldwide increase in crude oil prices should increase solar's attractiveness overall. YGE's cap is $1.9 billion, its website is iryinglingsolar.com>.

This information is presented for whatever interest it may have. I do NOT vouch for its accuracy. Do your own due diligence, and good luck. Phil Duke can be contacted by email at drpduke@wmconnect.com.

Phil Duke Ph.D. has been independently trading equities and futures for many years, his articles on trading and investing have been published in numerous journals, most recently by Futures magazine. Neither Phil Duke Ph.D. nor EVworld.com assume responsibility for any Financial loss that may result from buying or selling related to YGE.

Times Article Viewed: 7898
Published: 02-Jul-2008


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