Yingli Green Energy: Great Fundamentals, Lots Of Momentum.

About: Yingli Green Energy Holding Company Limited (YGE)
by: Tate Dwinnell

Today's stock is Yingli Green Energy (NYSE:YGE), which broke out of a short cup with handle base today with strong volume.


Yingli Green Energy Holding Company Limited (Yingli Green Energy) is a vertically integrated photovoltaic [PV] product manufacturer in China. Through Baoding Tianwei Yingli New Energy Resources Co., Ltd. (Tianwei Yingli), the Company's principal operating subsidiary based in China, it designs, manufactures and sells PV modules. It also designs, assembles, sells and installs PV systems that are connected to an electricity transmission grid.

As of June 7, 2007, the Company's annual production capacity was 95 megawatts of polysilicon ingots and wafers, 90 megawatts of PV cells and 100 megawatts of PV modules. Yingli Green Energy's end-products include PV modules and PV systems in different sizes and power outputs. It sells PV modules under its own brand name, Yingli, to PV system integrators and distributors located in various markets around the world, including Germany, Spain, China and the United States.


Yingli has been no exception to the exceptional growth seen in the solar industry over the past two years, with earnings growth nearly quadrupling in 2006. The company hit a bit of a snag with its earnings in the past two quarters but that is expected to be an aberration and the company is seen posting overall growth in 2007 of 82%, then another 90% growth in 2008.

Profit margins are good and return on equity is off the charts after a big spike over the past year. Overall, despite the hiccup in the last two quarters, this is a company with great fundamentals and a ton of momentum.


I'm a big fan of highly rated IPO's like Yingli which tend to do extremely well in strong markets because they are off the radar of many. It isn't until they have run up significantly that people start paying attention (be sure to see a recently posted IPO watch list">IPO watch list of the highest rated IPO's).

Getting in on a breakout from the first base formation is an ideal entry point and that is exactly what the stock did yesterday. It broke out from a short cup with handle base formation at 20.40 with strong volume to a new all time high. All indications point to further gains from here.

Full Disclosure/Disclaimer: The stock of the day is by no means a buy recommendation. Please do your own research and make a personal decision based on your own tolerance for risk. I currently do own a position in YGE.