13 replies to this topic

[kknd1234]

（JKS)$ 20-F - Annual and transition report of foreign private issuers [Sections 13 or 15(d)] Filed: 2014-04-18 AccNo: 0001144204-14-023526

[joshchang]

Convertible senior bond put option is due May 14, 2014. We will see how many investors will exercise this option by then. They still have unused credit facilities of $240m (not counting CDB credit line for future projects).

 

Projects cost varies between $1.13 to $1.37 per watt for Dec 2013 connected.

[sunnysky]

Projects cost varies between $1.13 to $1.37 per watt for Dec 2013 connected.

 

$1.13 cost is amazing. If the plants were sold, say at $1.65, GM would be between 20%-46% (20% corresponding to $1.37 cost)

[Lepv123]

• Sunny, Josh, Eye, and Explo:

   

  Should this statement should be  a concern for us?

   

  "We had negative working capital as of December 31, 2013. Our management believes that our current cash position as of December 31, 2013, the cash expected to be generated from operations and funds available from borrowings under the bank credit facilities will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months from December 31, 2013. However, in light of the amount of bank borrowings and bonds are due in the near future and exercise of the put option of the convertible senior notes on May 14, 2014, sufficient funds may not be available. Accordingly, we may need to reduce discretionary spending. Any additional equity financing may be dilutive to our shareholders and debt financing, if available, may involve covenants that would restrict us. Additional funds may not be available on terms commercially acceptable to us or at all. Failure to manage discretionary spending and raise additional capital or debt financing as required may adversely impact our ability to achieve our intended business objectives"

 

Does this mean they may do another secondary?

 

Thanks.

[eysteinh]

I read that previously filings as well. That is part of the general risk claims, they have this for other unlikely events as well, like running out of polysilicon due to it getting bought out etc.  And as they themselves mention at worst less expansion or share issue or more loan. I have gone over this many times with myself before I invested in JKS and for me personally I think its fine. I allways check the risk section of a filing then do my own analysis if those risks are likely to happen or not and what outcome if they do.  And I do not think another secondary is on the way to be honest, and I do not mind if we have one either as the money goes toward fueling profitable growth. But personaly if they ever needed cash I think they will just have a loan or bond currently as the stock price dropped. They still have plenty of equity and a high profit that allows loans - so I am not the least worried. Also not the wording "as of December 31" and note that after this time they had a share issue and now has a much better cash position. Feel free to see what I calculated on expenses vs cash on hand in another thread. And by the way I have share count at 36 million in my estimate vs weighted average for JKS in 2013 of 24 million so a bit room still for more shares in my estimate.

[Lepv123]

Thanks a lot Eysteinh.

[joshchang]

Yes i agree that's just a general statement for low probability event. Worst case is to borrow more and they shouldn't have any problem getting more loan considering unused credit facilities, improved equity and improved profitability. Amount of cb got called will also shed some lights on investor's confidence level on jks since sp is trading under coversion price now.

[Makan]

$1.13 cost is amazing. If the plants were sold, say at $1.65, GM would be between 20%-46% (20% corresponding to $1.37 cost)

Is it fair to assume that project costs rise a bit for projects in the east due to higher cost for land rights and higher salaries? JKS wants to concentrate more eastwards.

[Lepv123]

Is it fair to assume that project costs rise a bit for projects in the east due to higher cost for land rights and higher salaries? JKS wants to concentrate more eastwards.

Wouldn't they be able to charge more too?

[sunnysky]

Is it fair to assume that project costs rise a bit for projects in the east due to higher cost for land rights and higher salaries? JKS wants to concentrate more eastwards.

 

This is plausible but eastern provinces and local governments offer more generous additional subsidies on top of higher electricity rates, especially for industrial use. Connection to grid is also a lot easier. On the other hand, another downside is lower sun irradiance. Overall, IRR can be pretty high for the right projects. So I think JKS will do well in eastern regions as well.

[eysteinh]

Yeah thanks for bringing up the discussion about JKS having higher cost in eastern regions. I think it is good to not only discuss positive things about JKS. Also good to note about the risk factor for jks when it comes to finances, because it is indeed a risk so it deserves some attention. That is why you saw several of us on the forum discuss if the convertible was a problem or not for JKS some days ago before the 20k was filed.  Also while one project had so low cost, most projects where in the region of 1.3$/watt and when it came to financing suprisingly not all projects where financed on loans. Actually almost 60% was JKS capital surprisingly. Can they sustain this? I think the equity issue in end of 2014 beginning 2015 could be important for JKS to keep growing ahead of its competitors. 

[CrouchingTiger]

Sunny and others,

 

I saw this a few days ago and haven't seen anybody commented on it. I thought JKS already acquired Topoint so why is there such a notice? Is it just a formality or  does JKS need to compete with others to get Topoint's assets? The notice was published on April 10th and companies interested should respond by April 25th. As Eys says above, we need to know all things not just positive things. Appreciate your comments. 

 

http://guangfu.bjx.c...11/503195.shtml

[joshchang]

JKS hasn't acquired Topoint asset they are just leasing and operating the asset. Topoint is in restructuring process and I guess the formal process is still to invite all interest party to bid/participate for the asset. However, considering JKS is already operating the asset and has good local connection in Haining city, I believe it will be JKS taking over the ownership in the end.

[sunnysky]

Yeah, I saw that a few days ago. I agree with Josh. Topoints needs to go through the formal process dictated by the bankruptcy law.