The following press releases and news reports about China companies were carried on June 15. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Sees Growth Rising to 48 Pct in First Forecast (English article)
ChemChina, New Hope Said to Weigh McDonald’s (NYSE: MCD) Franchise Bids (English article)
Yingli Green Energy (NYSE: YGE) Reports Q1 Results (PRNewswire)
China’s Midea (Shenzhen: 000333) Wants Only 49 Pct of Kuka: Sources (English article)
NXP (Nasdaq: NXPI) Selling Products Unit for $2.75 Bln to Chinese Group (English article)
Bottom line: YIngli’s surprise profit announcement could be the result of a government rescue that will result in a sale of the company, while Ming Yang’s quick privatization reflects its profitability and strong longer-term prospects.
Ming Yang shareholders approve buyout
In a huge surprise to new energy stock watchers, nearly insolvent solar panel maker YIngli (NYSE: YGE) has suddenly announced its first quarterly profit since 2011, abruptly reversing years of massive losses. There’s no explanation for this sudden profit announcement, which comes in some preliminary results released ahead of an official conference call set for next week. Meantime, the more solvent wind power equipment specialist Ming Yang (NYSE: MY) is moving closer to New York exit door, with its announcement that shareholders have approved its plan to privatize as part of a broader wave of such de-listings by US-traded Chinese companies. Read Full Post…
The following press releases and news reports about China companies were carried on June 7. To view a full article or story, click on the link next to the headline.
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Bitauto (NYSE: BITA) Announces $300 Mln Investment from Tencent, Baidu, JD.com (PRNewswire)
Suning (Shenzhen: 002024) Pays 270 Mln Euros for 70 Pct of Soccer Club Inter Milan (Chinese article)
TCL (Shenzhen: 000100) to Take Handset Maker TCL Communication (HKEx: 2618) Private (English article)
Yingli (NYSE: YGE) Announces Preliminary Financial Results for Q1 (PRNewswire)
Bottom line: Canadian Solar’s raised revenue guidance hints at rising prices and could signal upside for the company’s profits, while YIngli’s latest signals may show it’s trying to sell itself to a healthier rival.
Canadian Solar surges, YIngli struggles
The strongest and weakest players from China’s lively solar panel sector are in the headlines today, with superstar Canadian Solar (Nasdaq: CSIQ) and the struggling YIngli (NYSE: YGE) both releasing their latest quarterly results. But whereas Canadian Solar has just announced its financials for this year’s first quarter, including a raised revenue outlook for 2016, Yingli is just now releasing its results for the fourth quarter of 2015.
Most companies typically release their quarterly results within 60 days of the quarter’s end, or 90 days at the very latest. But YIngli’s ongoing struggles have led managers to say several times the company could become insolvent, as it sits on a massive pile of maturing debt that it can’t repay. The latest of that debt comes due today, and Yingli is saying it’s unlikely to make the repayment on time. Read Full Post…
Bottom line: Beijing should promote cutting-edge companies like Tesla that can help advance its new energy agenda, while abandoning ones like Yingli that use old technology to make cheap copycat products.
Tesla nearing China plant?
Two green energy stories were in the headlines last week, spotlighting China’s drive to become a global leader in the new technology and also the right and wrong ways to achieve that aim. An item involving US electric vehicle (EV) powerhouse Tesla (Nasdaq: TSL) represented the right approach, with reports that the company might near a deal with Beijing to build a manufacturing plant in China. Meantime, former solar panel heavyweight Yingli (NYSE: YGE) was in the wrong approach column, announcing that its ill-conceived model of using old technology and cheap prices to do business had pushed it to the brink of insolvency, despite ongoing local efforts to rescue the company.
Beijing should take note of these 2 examples and do more to promote companies like Tesla that can develop cutting-edge technology for use in widely-respected products that the market wants. At the same time, it should abandon copycats like Yingli that don’t innovate and can only compete by offering cheap products using old technology. Read Full Post…
Bottom line: A new report spotlighting suspicious sales by BYD shows that last year’s EV explosion in China was fueled by people seeking to pocket government subsidies, while Yingli looks set to receive a government bailout from Beijing.
Yingli set to get new government rescue
A couple of stories from China’s new energy sector, one from the car space and the other from solar panels, are shining a spotlight on the challenges companies are facing after becoming too reliant on government support. One recounts a twisted tale involving electric car maker BYD (HKEx: 1211), and shows how its boom in sales last year may have been largely due to big government rebates for buyers. The other has Beijing telling one of the nation’s biggest policy lenders to provide money for struggling solar panel maker Yingli (NYSE: YGE) before it defaults on a bond payment due next month.
Let’s begin with BYD, which has experienced a rocky road over the last few years as its dream of a future filled with new energy vehicles failed to take off. That seemed to change last year, as new energy vehicle sales suddenly exploded at the company backed by billionaire investor Warren Buffett. BYD and industry boosters said the sales explosion showed that Beijing’s years of support for the sector was finally bearing fruit. Read Full Post…
The following press releases and news reports about China companies were carried on April 9-11. To view a full article or story, click on the link next to the headline.
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Alibaba Affiliate Ant Financial Said to Lift Target in Record Tech Funding (English article)
240 BYD (HKEx: 1211) Electric Taxis Purchased by Nanjing Stay Stranded in Shenzhen (Chinese article)
New Didi Kuaidi Funding Round May Raise More Than $1.5 Bln (Chinese article)
China Said to Push for $1.16 Bln in Loans for Yingli (NYSE: YGE) (English article)
YTO Express to Sell Self to Shell Company for 17.5 Bln in Backdoor China Listing (Chinese article)
Bottom line: Yingli is likely to get sold or announce a major government-led restructuring, which could include bankruptcy, before a new round of 1.4 billion yuan in bonds comes due next month.
Yingli shrivels under crushing debt load
In what looks like a case of deja vu, fast-shrinking solar panel maker Yingli (NYSE: YGE) is in the headlines again as it looks set to default on 1.4 billion yuan ($220 million) worth of bonds set to come due next month. The default would be Yingli’s second within a year, after it failed to pay off part of another big bond that matured last October.
Yingli is still working to repay the remaining debt from that earlier bond, which amounts to another 1 billion yuan. That means that Yingli now needs to find some $375 million in funds to repay all of its maturing debt by the time the new round of 1.4 billion yuan in medium-term notes come due on May 12. That looks all but impossible for a company that’s bleeding money, which resulted in a $500 million net loss during its latest reporting quarter. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 16. To view a full article or story, click on the link next to the headline.
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China Smartphone Market Sees Its Highest Shipment Ever of 117.3 Mln in Q4 – IDC (Press Release)
Apple Pay (Nasdaq: AAPL) to Launch in China in 3 Days – Source (Chinese article)
E-Payment Firm Lakala to Backdoor List in Shanghai via ‘Tibet Tourism’ Shell (English article)
LeTV (Shenzhen: 300104) Sports Raises $1 Bln in Series B Funding (Chinese article)
Yingli (NYSE: YGE) Said to Get 3.3 Bln Yuan in Loans Amid Restructuring (English article)
Bottom line: The EU’s extension of punitive tariffs to China-made solar panels transshipped through shell factories in Malaysia and Taiwan could kill a recent wave of offshore factory construction by Chinese manufacturers.
EU freezes out Chinese solar panels in Taiwan, Malaysia
A recent offshore movement by Chinese solar panel makers seeking to avoid western anti-dumping tariffs could come to a sudden halt, with word the European Union (EU) is extending its previously announced punitive duties to Taiwan and Malaysia. The EU’s ruling means it believes that many of the offshore solar panel plants recently built by Chinese manufacturers are little more than shells designed to hide the true origin of their products.
This story dates back 3 years, and began when the EU levied anti-dumping tariffs on Chinese-made solar panels after determining manufacturers were receiving unfair government support via policies like cheap land, low-interest loans and export rebates. Chinese manufacturers quickly agreed to raise their prices to levels comparable to those of western rivals in a bid to avoid the tariffs. But then they almost immediately began to violate the spirit of that agreement by offering discounts to buyers in other ways. Read Full Post…
Bottom line: Yingli’s new bank loan will be followed by a major restructuring that will force big losses on bond and shareholders, while a new asset-backed bond program to help the broader panel sector raise money will meet with tepid reception.
Beijing throws new lifelines to Yingli, solar sector
China is throwing a couple of lifelines to its struggling solar panel sector, including a relatively large rescue package for Yingli (NYSE: YGE), the player in the most precarious position. That package will see a consortium of banks, led by the policy-driven China Development Bank, provide Yingli with 2 billion yuan ($300 million) in funds as the company tries to reorganize its financially strapped balance sheet.
Word of the rescue package comes as media are reporting separately that China is preparing a much bigger lifeline for the sector, by allowing solar panel makers to sell bonds backed by the growing number of solar farms they are self-developing. Such farms provide a steady source of income from the power they generate, and thus should theoretically be more attractive to investors than directly investing in the financially-challenged solar panel makers themselves. Read Full Post…
