In Yingli we trust
Hello all,
I am far from being an expert at finance, but I am going to blog about it now. As more and more people are moving towards sustainability, the alternative "green" energy sector has been growing. Out of the many ways to produce using renewable sources, solar panels are by far the most affordable and the most accessible to the general public. Most firms producing solar panels saw a big drop in share price in 2009. It remained stable ever since though. Recently, share prices have started to rise again for most firms in this sector due to the growing demand for solar panels. There are many firms in this sector but I chose to invest in Yingli Solar. Yingli is currently the third largest firm in this industry in terms of market shares. Its current stock price is at 4.01 dollars, and I think it has the potential to rise back up at 20 dollars, where it used to be before the crisis. Yingli is a highly innovative firm and invests a lot in advertisement and sponsorships. currently, it is a sponsor of FC Bayern Munich and the US national football team. In the future, it will provide solar panels for the 2014 world cup in Rio and it already bought advertisement space in the stadiums. I have already discussed this with my professor (professor Aleen Bayard) and we both agree that there is no direct correlation between advertising and rising values of share. However, the football world cup is the most popular sporting event, having billions of people know about your existence will definitely increase its demand and likely its profits. Profit making firms are attractive for investors meaning that its share prices are likely to rise in the future. On top of that, the Chinese government heavily subsidises solar energy firms, meaning that the money spent from advertising is unlikely to chew up Yingli's future revenues.
Cheers,
Sidney
One thing to be cognizant of is that the U.S. Government actually levied heavy tariffs on Chinese Solar Panels from our country because, due to Chinese Subsidies driving down the cost of solar panels, U.S. decided free market principles were less important than protecting our own companies, in this case, Solar companies.
ReplyDeleteJust something to be aware of as far as potential growth of YingLi is concerned.
Sustainable Sid,
ReplyDeleteI didn't exactly mean to convey that there is NO direct correlation between advertising and share price. It is just difficult to prove and in the case of sustainability - advertising at a soccer match may or may not be as effective as cause marketing or other forms of messaging.
I love how you explained more about the use of solar panels. Thank you ;) I do think that solar panels will be one of the most, if not the most effective and efficient form of renewable energy in the future.
ReplyDelete-Jasc