Why You Should Hold off on This Wind Energy Stock


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China is usually associated with solar energy, but wind power is gaining popularity

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Why You Should Hold off on This Wind Energy Stock

  1. 1. Buy, Sell, Hold: Ming Yang Wind Power Group
  2. 2. Ming Yang (NYSE: MY) • 3rd largest manufacturer in market • 1,286 MW of new installations • 7.99% of market share • 5,543 cumulative MW In Chinese market for 2013
  3. 3. Recent developments China and abroad •Won exclusive rights to develop and operate a 300 MW offshore wind farm in Jiangsu Province, China • Chosen for a 150 MW supply order in India, making it the first Chinese wind turbine manufacturer to receive approval to sell turbines in India (Asia’s 2nd largest market) •Reached an agreement to install a 6 MW turbine off the coast of Karmoy Island, Norway
  4. 4. Opportunities • New wind installations up 23% in 2013 over 2012 level • Global leader in cumulative wind capacity • About 92 GW currently installed • Government target of 200 GW by 2020 China Source: CIA
  5. 5. Opportunities • Currently, 20 GW of capacity installed • Government target of 100 MW of generating capacity by 2022 • First mover status • Aims to install 2.5 GW over next three years India Source: CIA
  6. 6. Global opportunity According to research from GlobalData: Global cumulative wind power capacity will more than double from 319.6 GW at end of 2013 to 678.5 GW by 2020 Source: Ming Yang
  7. 7. Stock performance Down nearly 75% over the past five years, shares have picked up over the past year – up 66%.
  8. 8. Financial performance Q1 2014 Green flags •Total revenue equals $196.9 million – a 57.2% increase over Q1 2013 •Gross margin of 15.7% -- a 4.6 percentage point increase compared to 11.1% in Q1 2013 • Diluted EPS of $0.24 compared to $0.03 in Q1 2013
  9. 9. Foolish takeaway Some bullish signs •By end of 2013, Ming Yang ranked No.9 in global newly- installed capacity for 2013 • 3 GW order book at end of 2013 •ASP rose steadily •Market conditions are favorable •Operationally, the company is performing well
  10. 10. Foolish takeaway Keep this one on hold •Financially, there are concerns •If from an operations perspective the company continues to perform well and financials improve, the stock should definitely be re-examined
  11. 11. Do You Know This Energy Tax “Loophole”?
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