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    Stock Alert for China Ming Yang Wind Power Group Ltd. (MY)

    China Ming Yang Wind Power Group Ltd. (NYSE: MY) is a wind turbine manufacturer in China, focusing on designing, manufacturing, selling and servicing megawatt-class wind turbines. The Company produces advanced, highly adaptable wind turbines with high energy output and low energy production costs, and provides customers with comprehensive post-sales services. It cooperates with aerodyn Energiesysteme, one of the world’s leading wind turbine design firms based in Germany, to develop wind turbines and share intellectual property rights. MY’s key customers include the five largest state-owned power producers in China, with an aggregate installed capacity accounting for more than 50% of China’s newly installed capacity in 2010.

    Share Statistics (23-Dec-11) FY2009 FY2010 % Chg Q32010 Q32011 % Chg
    Symbol MY Revenue, CNY Bn 1.17 5.52 371.8% 1.49 1.90 27.5%
    Current price $1.73 Gross marg. 6.5% 19.7% 203.1% 16.7% 16.0% -4.2%
    52wk Range: $1.18-$11.67 Oper. margin 13.8% 7.6%
    Avg Vol (3m): 250,631 Net margin -18.9% 12.7% -167.2% 11.4% 5.4% -52.6%
    Market Cap. 216.25M
    Shares Outstanding 124.28M EPS, $ -2.21 6.61 -399.1% 1.70 0.82 -51.8%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    China Ming Yang Wind Power Group Ltd. (MY) climbed as high as $1.79 Friday before closing the session at $1.73, continuing gains for the third consecutive day.  Over 450k shares traded hands during the session, versus the 10-day average of over 372 K.  MY is currently trading below  its 50-day and 200-day moving averages of $2.14 and $3.66, respectively.  Market capitalization currently stands at 198.84 million and it has 15.49 million outstanding shares.

    Shares of the Zhongshan, China-based wind turbine manufacturer dropped 11.1% in the last five days; 22.0% in the last month; and 85.0% year-to-date.

    MY Wednesday announced its intention to continue purchasing shares pursuant to its previously announced share repurchase program.  The Company’s CEO, Chuanwei Zhang, has also initiated a program to purchase MY American Depository Shares on the open market.

    Under the program, the Company is authorized to repurchase up to $50 million worth of issued and outstanding ADSs representing MY’s ordinary shares in the open market or in negotiated transactions, from time to time, depending on market conditions and other factors as well as subject to relevant rules under Untied States securities regulations. The share repurchase program will be funded by the Company’s available working capital. As of September 30, 2011, the Company had cash and cash equivalents of approximately $227.4 million.

    Zhang commented in the release saying, “Our commitment to the Company’s repurchase program and my own decision to purchase additional ADSs of the Company both reflect our belief in the soundness of our business fundamentals and the ongoing strength of our core business.”

    Source: http://ir.mywind.com.cn/phoenix.zhtml?c=238508&p=irol-newsArticle&ID=1641814&highlight=

    Financial Summary

    MY reported revenue of RMB1,904.8 million ($298.7 million) for the third quarter of 2011, up from RMB1,486.0 million in the corresponding period in 2010. The Company attributed year-over-year increase to an increased number of wind turbine generators (WTGs) commissioned which amounted to equivalent wind power project output of 555MW, or 370 units of 1.5MW WTGs, compared to 359MW for the corresponding period in 2010.

    Gross profit in the latest third quarter was RMB305.6 million ($47.9 million), compared to RMB248.7 million in the comparable quarter last year. Gross margin in the third quarter of 2011 was 16.0%, compared to 16.7% for the corresponding period in 2010.

    The Company posted a profit RMB102.7 million ($16.1 million) in the latest third quarter, compared to RMB177.4 million in the comparable quarter last year.  Basic and diluted earnings per share for latest period was RMB0.82 ($0.13), compared to RMB1.70 in the corresponding period in 2010.

    For the full year of 2011, MY targets to recognize revenue from WTGs equivalent to wind power projects with a total output of 1.8GW to 2.0GW, reflects its current and preliminary view based on current market and operating conditions such as adverse weather conditions affecting the installation and commissioning of its WTGs.

    Source: http://ir.mywind.com.cn/phoenix.zhtml?c=238508&p=irol-newsArticle&ID=1628969&highlight=

    Financial Strength (21-Dec-2011)

    Company

    Industry

    Sector

    S&P 500

    Quick Ratio (MRQ) 1.35 1.17 0.85 0.78
    Current Ratio (MRQ) 1.60 1.68 1.12 1.15
    LT Debt to Equity (MRQ) 160.88 15.94 106.27
    Total Debt to Equity (MRQ) 7.92 170.88 20.84 142.91
    Interest Coverage (TTM) 9.48 1.83 4.48 26.94

    Source: Reuters.com, SEC Filings.

    Technical Analysis

    Source: http://stockcharts.com

    MY is within its Bollinger Bands. This is a normal condition suggesting that it is neither overbought nor oversold relative to the recent levels.

    The MACD for MY currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of 0, which implies that the underlying moving averages are trending lower.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Dec21-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    GT Advanced Technologies Inc. GTAT 7.13 907.06M 4.72 4.48 0.91 0.83
    First Solar Inc. FSLR 31.80 2.75B 5.41 7.38 0.95 0.72
    Diversified Machinery Median       11.09 n/a 0.60 n/a
    China Ming Yang Wind Power Group Ltd. MY 1.73 216.25M 2.29 2.58 0.18 0.17

    Source: Thomson Financial

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