Things seem to be looking dull for Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE) as the market situation continues to worsen.
The slowed Chinese economy has taken a touch toll n Yingli. The company has been on a downward trend for the third week in a row. The effect was felt in the recently announced quarterly figures as sales failed to live up to the expectations of analysts. According to Zacks, the continuous decline might be caused by the negative trend in earnings estimates revision. Asa a result, the consensus estimate has widened from a loss of 74 cents per share as it was last month, to the prevailing loss of $1.58 per share.
As per the current quarter, there has been no revision consensus on the upward direction while there have been two downward estimate revisions. As a result, the consensus estimate has cultivated a loss of 27 cents per share compared to the 11 cents loss per share that prevailed a month ago. The stock has dropped by more than 30% in the past month alone. To make matters worse, the poor outlook on the Yingli shares aligns with a low preference for Chinese solar companies and as the country’s slowest economic state. Analysts claim that it is the slowest that the economy has been for the past 25 years.
Speaking through a phone interview on Friday, analyst Gordon Johnson from Axiom Capital Management Inc. stated that most Chinese solar companies have accumulated large debts to build up their operations. He further added that the firms fail to take into account the weakening Chinese stock while at the same time depending on the continued interest from investors. If the graphs have proved one thing is that the companies have been betting against the tide, and now they are paying for it.
Trina Solar Ltd. is one of the solar companies that operates in China. The firm claimed on Thursday that the government has been holding back on the incentives and is now afraid that the market might take a turn for the worse. So far investors are pulling out of the market as it continues to become more bearish.