Auriga Maintains a 'Hold' on Yingli Green Energy (YGE); All We See Is Red Through 2013

Auriga maintains a 'Hold' on Yingli Green Energy (NYSE: YGE) price target of $3.50.

Auriga analyst said, "Cost lag vs. ASP Decline is a tough slog; 73.4% debt/capital makes it worse. High-teen GM is breakeven for Yingli Green and it ain't showing up anytime soon owing to cost lag vs. ASP decline. To us, 2013 will at best trim losses close to breakeven. Profits will still be a mirage. At $0.85/Wp to $0.90/Wp ASP by 4Q12 (vs. ~$1.09/Wp in 4Q11), Yingli Green's cost structure needs to track ~$0.70/Wp by 4Q12 (vs. $1.04/Wp in 4Q11; $0.95/Wp normalized) just to breakeven and it is mostly unlikely.We believe its 750MWp capacity expansion in 2012 even as it reels with losses through 2013 is part of the destructive supply side problem dogging the solar PV industry as it suppresses margins and lowers industry profitability. Yingli Green's B/S with 73.4% debt/capital imposes an onerous burden on operational flexibility, and the company will likely need an additional $500M in new debt to tide it over through 2013."

For an analyst ratings summary and ratings history on Yingli Green Energy click here. For more ratings news on Yingli Green Energy click here.

Shares of Yingli Green Energy closed at $3.74 yesterday.

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