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JinkoSolar (JKS)

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55 minutes ago, Klothilde said:

Just plugged in my Q2 estimates into estimize you guys.

Q2 Rev:  $927.3M
Q2 EPS: $0.08

In other words, peanuts again.  Does anybody see more? 

I would go a little lower revenues in the $891M range unless the sell some of their projects.

 margins  16.5%

 net income before Forex $0.75

 $15M forex loss earnings earnings of $0.40.

 

It all really boils down to margin expectations. 

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2 hours ago, Klothilde said:

Will you ever say something positive about FSLR ?

Will you ever say something positive about any stock BUT FSLR?

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Haha, ouch, that's Pete 2, Klothilde 0.  Let's hear it queen of solar... take a deep breath... CSIQ should be the easy one you can say something positive about.  No?  Just give us one thing about one company.  We'll all feel a lot better.  I bet Pete will meet you halfway and say all that cash in the FSLR bank account is something to envy.  Good stuff, hah.

 

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Longi and Tongwei are terrific companies.  DQ is also a great company, however it has become horribly overpriced.

JKS and CSIQ on the other hand are just instruments designed to sell shares at a high price and get them back for peanuts.

Imho of course.

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18 hours ago, Mark said:

I bet Pete will meet you halfway and say all that cash in the FSLR bank account is something to envy.

That's exactly right.  FSLR is currently fully priced expecting great results in the next year.  If those results come in as expected, great, but I don't see the share price rising much more, BECAUSE those results are already priced in.  (Or at least if it rises, it will be due to momentum, not fundamentals.)  If, on the other hand, those results are less than expected, the share price will certainly decrease, perhaps crater.  But that cash in the bank provides FSLR investors a certain safety net--even with continued poor profits for a few more quarters, the financial viability of the company is not in question.  Without it, FSLR is the risk equivalent of TSLA.

The criticism of JKS and CSIQ misses my point, however.  No matter what the motivation of company leadership, their RESULTS have indeed been better than FSLR the past couple of quarters.  That is simply undeniable.  So if you want to criticize them, management intention is one avenue, although if memory serves, FSLR has done its share of misleading investors in the past--but poo-pooing their results simply invites the obvious comparison I made.

All IMHO as well, of course.

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I don' t think the market has baked in terrific results for FSLR next year.  As with all shares the price reflects the average market sentiment or expectation.  The market in average does not expect S6 to fail miserably and neither does it expect S6 to hit it out of the park but it expects something in between.  Why don't you simply take the sentiment on this board towards FSLR as a proxy for the whole market?  I am the only one who thinks FSLR will do extremely well next year and AFAIK everybody else thinks FSLR will fail miserably next year.

 

 

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1 hour ago, Klothilde said:

I don' t think the market has baked in terrific results for FSLR next year.  As with all shares the price reflects the average market sentiment or expectation.  The market in average does not expect S6 to fail miserably and neither does it expect S6 to hit it out of the park but it expects something in between.  Why don't you simply take the sentiment on this board towards FSLR as a proxy for the whole market?  I am the only one who thinks FSLR will do extremely well next year and AFAIK everybody else thinks FSLR will fail miserably next year.

 

 

Well for share price

 

FSLR up 20% in the past year and  up 70% from its lows

CSIQ up 59% in the past year and up 73% from its lows

JKS up 55% in the past year and up 168% from its lows

 

FSLR CSIQ and JKS are all flat in stock price over the past 5 years

 

These numbers say investing is solar is a bad idea unless you are going to trade solar. Valuations and earnings potential has zero impact when compared to peers.

 

What the numbers tell me is that FSLR is more stable investing than peers and the peers offer equal or greater potential gains when trading than FSLR.  

 

Throw a dart and pick one, that is just as likely to have the same results as someone who thinks they know the future earnings.

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3 hours ago, Klothilde said:

I don' t think the market has baked in terrific results for FSLR next year.

Really?  Solars don't trade like other tech stocks.  Average P/E for Chinese solars is around 6-7.  Double that to account for FSLR being a US company and give them a 15 P/E.  That means at their current price, they SHOULD be earning $4 yearly EPS.  Yahoo shows their TTM EPS is 0.23, with a current P/E of 276.  So they will have to increase earnings TWENTY-FOLD in one year to go from 0.20 to 4.00.  That's what's "baked in" ALREADY.  You don't think that's "terrific" enough?  I certainly do!  

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1 hour ago, SCSolar said:

FSLR CSIQ and JKS are all flat in stock price over the past 5 years

 

These numbers say investing is solar is a bad idea unless you are going to trade solar. Valuations and earnings potential has zero impact when compared to peers.

 

What the numbers tell me is that FSLR is more stable investing than peers and the peers offer equal or greater potential gains when trading than FSLR.  

That is EXACTLY correct!  And as I pointed out in my previous reply to Klothilde just now, while FSLR may be more stable, it's also richly priced right now compared to the CN crowd.  So that stability comes at a price, which limits potential gains.  So it boils down to your personal investing strategy as to which names are "bad" stocks and which are "good" ones.  "Bad" or "good" in this case simply reflect the suitability of a given stock to a given strategy.

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2 hours ago, solarpete said:

That is EXACTLY correct!  And as I pointed out in my previous reply to Klothilde just now, while FSLR may be more stable, it's also richly priced right now compared to the CN crowd.  So that stability comes at a price, which limits potential gains.  So it boils down to your personal investing strategy as to which names are "bad" stocks and which are "good" ones.  "Bad" or "good" in this case simply reflect the suitability of a given stock to a given strategy.

They are all bad stocks for investing  long term in. They are all good stocks for trading at the proper times.

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14 hours ago, solarpete said:

Really?  Solars don't trade like other tech stocks.  Average P/E for Chinese solars is around 6-7.  Double that to account for FSLR being a US company and give them a 15 P/E.  That means at their current price, they SHOULD be earning $4 yearly EPS.  Yahoo shows their TTM EPS is 0.23, with a current P/E of 276.  So they will have to increase earnings TWENTY-FOLD in one year to go from 0.20 to 4.00.  That's what's "baked in" ALREADY.  You don't think that's "terrific" enough?  I certainly do!  

The way I look at it the FSLR share price of $62 splits into $16 for its net cash and $46 for its operations.  $46 at a P/E of 15 corresponds to $3 in yearly EPS.  I think they will exceed that handsomely in 2020, so I consider the stock cheap.  And if you deduct a further $10/share for project assets on balance sheet that makes the stock even cheaper.

As to your TTM EPS assessment I think it is a flawed metric to assess future EPS in a setting of significant market and company fundamentals transformation.  If I were to look for the first time at a consumer goods company or a utility company with decades in a stable market then - yes - I would look at TTM EPS to get a first feeling of their earnings power.  But e.g. in the case of TSLA this metric is irrelevant since everybody knows they are just starting to ramp up shipments and earnings.  In the case of FSLR it is just as irrelevant as everybody knows that S6 shipments, revenue and earnings all are heavily skewed towards the latter quarters of the year.  Even you know that but you keep looking in the rear view mirror to make FSLR appear expensive. yawn.

Besides you seem to have overlooked that this TTM EPS view generates an even crappier picture for Daqo, one of your favorite companies.  Yahoo has them at a TTM EPS of -$0.19.  By your own standards this is a company one shouldn't touch with a ten foot pole, yet it is one of your favorites.  This screams inconsistency in your reasoning but maybe you can explain.

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On 8/28/2019 at 2:00 PM, SCSolar said:

I would go a little lower revenues in the $891M range unless the sell some of their projects.

 margins  16.5%

 net income before Forex $0.75

 $15M forex loss earnings earnings of $0.40.

 

It all really boils down to margin expectations. 

kudus on nailing the margin!

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1 minute ago, Klothilde said:

kudus on nailing the margin!

I am still trying to figure out how $18M net income is only $0.18 in earnings. when they have only 40Million shares. That $18M is slightly above  what I expected for $0.40.

 

Net income attributable to the Company's ordinary shareholders was RMB125.4 million (US$18.3 million) in the second quarter of 2019

 

 

  • Diluted earnings per American depositary share ("ADS") were RMB1.260(US$0.184) in the second quarter of 2019.

 

 

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One analyst mentioned that JKS is throwing in bids for mono-PERC in China at prices in the low 20s...  Let's wait for the transcript to see what's cooking.  But we may be up for an ASP slump in Q4 based on a large China shipment fraction at low prices.

SC, what's your estimate for ASP and CPW in Q2?

P.D. Applying the 2018 module revenue fraction of 0.966 (20F p F-28, excluding systems revenue) I estimate:
Q2 ASP = ($1007M*0.966)/3386MW = $0.287/W
CPW = $0.287*(1-0.165) = $0.240/W

That's the blended cost, in China alone they may be 1-2 pennies below blended.

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4 hours ago, Klothilde said:

The way I look at it the FSLR share price of $62 splits into $16 for its net cash and $46 for its operations.  $46 at a P/E of 15 corresponds to $3 in yearly EPS.  I think they will exceed that handsomely in 2020, so I consider the stock cheap.  And if you deduct a further $10/share for project assets on balance sheet that makes the stock even cheaper.

As to your TTM EPS assessment I think it is a flawed metric to assess future EPS in a setting of significant market and company fundamentals transformation.  If I were to look for the first time at a consumer goods company or a utility company with decades in a stable market then - yes - I would look at TTM EPS to get a first feeling of their earnings power.  But e.g. in the case of TSLA this metric is irrelevant since everybody knows they are just starting to ramp up shipments and earnings.  In the case of FSLR it is just as irrelevant as everybody knows that S6 shipments, revenue and earnings all are heavily skewed towards the latter quarters of the year.  Even you know that but you keep looking in the rear view mirror to make FSLR appear expensive. yawn.

Besides you seem to have overlooked that this TTM EPS view generates an even crappier picture for Daqo, one of your favorite companies.  Yahoo has them at a TTM EPS of -$0.19.  By your own standards this is a company one shouldn't touch with a ten foot pole, yet it is one of your favorites.  This screams inconsistency in your reasoning but maybe you can explain.

The TTM is only irrelevant IF you believe the company will actually deliver those expectations.  If they do, great, but again, those expectations are ALREADY priced in, so further upside is likely limited.  If they don't....  Now remind me again, when was S6 originally supposed to have been fully ramped?

You're right about DQ's price, but you forget I do NOT hold them for long-term gain.  I TRADE them, almost daily, because of their volatility.  I wouldn't mind at all if they came back down to $30/share, as long as they keep fluctuating +/- 1 dollar/day.  If FSLR were more volatile, I might consider them a trading vehicle, too, but there I have to put too much skin in the game for too little return, at least as compared to DQ.

 

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3 hours ago, SCSolar said:

I am still trying to figure out how $18M net income is only $0.18 in earnings.

The difference between GAAP and non-GAAP?  You're quoting the GAAP figure only.

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21 minutes ago, solarpete said:

The TTM is only irrelevant IF you believe the company will actually deliver those expectations.  If they do, great, but again, those expectations are ALREADY priced in, so further upside is likely limited.  If they don't....  Now remind me again, when was S6 originally supposed to have been fully ramped?

You're right about DQ's price, but you forget I do NOT hold them for long-term gain.  I TRADE them, almost daily, because of their volatility.  I wouldn't mind at all if they came back down to $30/share, as long as they keep fluctuating +/- 1 dollar/day.  If FSLR were more volatile, I might consider them a trading vehicle, too, but there I have to put too much skin in the game for too little return, at least as compared to DQ.

S6 was pulled forward from the original roll-out plan and the ramp has been fully on time if not ahead of plan.  You are suggesting a ramp full of delays and glitches but that's just wishful thinking on your part with nothing to support it. 

As to your trading strategy feel free to do whatever makes you happy.

I don't trade because I got burned long time ago and also because I came across some nasty studies with scary winning odds.  But IF I traded I'd at least make sure the stock is not overpriced from a fundamentals point of view so that I could have confidence that the long-term share price direction would be flat or increasing and not decreasing.

But that's just me.

 

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1 hour ago, solarpete said:

The difference between GAAP and non-GAAP?  You're quoting the GAAP figure only.

Can you explain how a company reports $18M net income with 40 million basic AND diluted shares and gets $0.18 in EPS per diluted shares?

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43 minutes ago, Klothilde said:

S6 was pulled forward from the original roll-out plan and the ramp has been fully on time if not ahead of plan.  You are suggesting a ramp full of delays and glitches but that's just wishful thinking on your part with nothing to support it. 

As to your trading strategy feel free to do whatever makes you happy.

I don't trade because I got burned long time ago and also because I came across some nasty studies with scary winning odds.  But IF I traded I'd at least make sure the stock is not overpriced from a fundamentals point of view so that I could have confidence that the long-term share price direction would be flat or increasing and not decreasing.

But that's just me.

 

My understanding is they are having production glitches. Their fix was a staging area instead of a line shutdown. That staging area has manual intervention.

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1 hour ago, Klothilde said:

But IF I traded I'd at least make sure the stock is not overpriced from a fundamentals point of view so that I could have confidence that the long-term share price direction would be flat or increasing and not decreasing.

Which is precisely why I prefer DQ over FSLR, while you see exactly the reverse.  Interesting.

In any case, the point is not which one of us is right and which one is wrong on which stock, if either, is overpriced based on its fundamentals.  My point in starting this thread was just to poke a bit of fun at your incessant needling of any solar name besides FSLR, while making excuse after excuse for FSLR's continued current lack of profits.

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36 minutes ago, SCSolar said:

Can you explain how a company reports $18M net income with 40 million basic AND diluted shares and gets $0.18 in EPS per diluted shares?

I don't even begin to try to figure out their accounting practices.  But I do trust that as globally listed companies, those practices are not fraudulent.  I'm frequently intrigued by the differences between GAAP and non-GAAP figures, though, which can be quite large, as in this case.

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1 hour ago, Klothilde said:

You are suggesting a ramp full of delays and glitches but that's just wishful thinking on your part with nothing to support it. 

I actually wish you, and all FSLR stockholders, nothing but the best.  What I am pointing out is that so far, their production rollout HAS had delays.  That to me raises the likelihood such delays can continue.  It's simple extrapolation from the past, which may or may not be correct.  But it has nothing to do with "wishful thinking."

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On 8/30/2019 at 6:27 PM, solarpete said:

What I am pointing out is that so far, their production rollout HAS had delays.  That to me raises the likelihood such delays can continue.  It's simple extrapolation from the past, which may or may not be correct.  But it has nothing to do with "wishful thinking."

You are referring to some minor hiccups that they fixed and that hardly had any effect on the overall timeline.

Fact is they started the first 3 S6 factories on time and even pulled forward the start of their 4th factory (Vietnam 2) by one quarter from Q2 2019 to Q1 2019 (compare timelines of Dec 1017 and Dec 2018 below).

In July they produced 322MW of S6 modules from a nameplate monthly capacity of 350MW (con call).  That's above 92% of utilization and includes the newest plant in Vietnam which they've just started up in Q1.

They claim to be on track to hit their S6 volume and cost goals for the end of the year.

Not sure I can see a botched execution in the above like you do.  To the contrary, the fact that they are running S6 already above 90% utilization means to me ramp is essentially a done deal and it's about fine-tuning from here on.

https://s2.q4cdn.com/646275317/files/doc_event/3-First-Solar-2017-Analyst-Day-Operations-Update.pdf

https://s2.q4cdn.com/646275317/files/doc_presentations/2019-Guidance-Call-Presentation-Final.pdf

 

 

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Something's brewing at Jinko Power you guys.  There's talk of equity transfer and debt restructuring.  I wished I spoke mandarin or orange, the google translation is just confusing to me and I don't know if this is good or bad news.  Maybe folks with skin in the game can look deeper, just remember that if Jinko Power goes bust so does JKS...
http://guangfu.bjx.com.cn/news/20191010/1011953.shtml

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