JinkoSolar (JKS)

[explo 706]

Since you are sarcastic all the time it is hard to tell if you are surprised with the interest rates solar11 pay. Anyway, the argument that they get free credit was completely flawed. Most of them pay higher interest rates than non-Chinese peers. Trina might be an exception. They seem to be able to get tons of non-secured debt at very low interest. They also seem to have gotten raw materials at very low price in Q4. Trina have mastered the classical Chinese business trait of stubborn unwillingness to pay much for stuff and in the end close deals where they pay very little. I think the enabler of this is tough and strong management on this side of the business and their historical outstanding financial performance compared to other solar11s. They're connected. Banks and poly makers want surviving clients.

[Guest Klothilde]

Of course I know what Chi pays in interest, it's all in the 20-Fs. However 9% is a surprise to me and points to an act of desperation imo. All in one it's great to see some players going bust and others having to pay painful interest rates. It means that consolidation in China is real and that we are slowly leaving irrational grounds.

[explo 706]

These high levels are not a surprise. They have been quite common in new bonds past year or two. The blends that have been creeping up form 4's to close to 7's is because debt cost more today.

[Guest Klothilde]

7% tranlates to 7 ct/W for YGE. Can you believe that chit? Ballpark 10% of revenue. Happy for Odyd that he's out.

[explo 706]

Yes, we all know this, but this thread was about Jinko's 20-F and I quoted some news from it. The bond and interest is not the news and certainly there's nothing about YGE's interest rate in their. The news is that Jinko will use 640m for project development and 160m for working capital instead of using all 800m for capex.

[Guest Klothilde]

uuuups you're right. Jinko thread. My bad.

[Guest Lepv123]

under 30% from its high while others are making new highs? Any ideas? Thanks.

[explo 706]

It's also up 250% from the low in August last year. That low was too low, though.

[Guest Lepv123]

That's true.

[pg6solar 113]

Lepv123, not sure which "others" you refer to. CSIQ is the only Chinese to hit 52-week highs. FSLR and SPWR are clearly separated from Chinese. Among Chinese, CSIQ is the only one so far with clear path to profit and revenues. Once (or if) JKS will prove the same, its stock will fly likewise. I think its "show me the beef" first scenario, then PPS will be rewarded.

[Guest Lepv123]

Thanks PG6SOLAR. TSL was trading around $5 when the rally lifted JKS to $10 level, and now it's close to $6. But I guess you're right. Given the lack of profitability right now, we are dangling between $6-$8.

[dydo 1,560]

multi modules at 260 to 270 range. http://finance.yahoo.com/news/jinkosolar-introduces-series-highly-efficient-100000784.html

[explo 706]

Holy chit! Klothilde will choke on the morning coffee here. 270w multi module from Jinko's off the shelf standard production lines.

[dydo 1,560]

More so, the amount of poly in the cell is reduced, which is a cost savings. If not big exposure to Europe and a bit unknown outcome on plants in China, JKS is still holding a promise of coming out with profit. Explo you know looking at export data, how explosive Q1 was for JKS. This one still holds a potential for good surprise. Their processing is awesome.

[explo 706]

Yes, I think JKS would be, my no 2 or 3. The big Q4 AR and the 5-10% retainage in Q4 was probably the first time they disappointed me. Superior cogs, good opex and interest. Shipping more than capacity, means they don't have to idle too much if they need foreign tolling (applies to CSIQ too, but less so to YGE, TSL and JASO I think). Balance sheet is getting stretched and the quality of their customers (credit risk) is my main question marks. All-in-all the positives are quite heavy to make them no 2 or 3 pick.

[Guest Klothilde]

This is fishy, I don't like. 270W sounds like scam to me. Beware, there are liers, deceivers, and make-believers out there, even among Chi. Lets talk about this again when the first 100kW installation with these modules goes online. In 2035 or so.

[Guest outsmart]

Their processing is awesome.

Like REC and HSOL, new equipment -> lower cost processing

[Guest outsmart]

Maybe we see some of this Jinko stuff at the end of the year.

[Guest Lepv123]

Do you think it will take us to new highs, i.e. $10+? Man, JASO is rocking! Could this be the time for the gradual uptrend in solars? Thanks. Your inputs are always appreciated!

[pg6solar 113]

I would not look for JASO like ASPs from JKS. Unfortunately based on export data, unlike JASO, CSIQ and HSOL, JKS' Japan like (high ASPs) market exposure in Q1 is non-existent. I think Europe is still important for them with their Spanish sponsorship. I have a very large position and honestly hope to be completely wrong. I think its better to expect under performance and be pleasantly surprised (AKA a mini JASO) than the other way around (AKA SOL). Today's JASO performance showed what can happen with a small float stock (JKS is only about 60%) so any beat (IMO very unlikely) may result in extreme PPS appreciation. Personally, I would be looking for guidance going forward.

[Guest Lepv123]

Pgsolar, thanks. Even with the cautionary view, is $10 still possible by year end assuming guidance will be decent?

[pg6solar 113]

I can not predict price, but it was already at $10 just three month ago based just on January rally effect and spot prices stabilization. If EU AD will result in no tariffs in early June, then I would expect a double of your target if not by YE then by February of next year for sure.

[Guest Lepv123]

Thanks pg6solar!

[dydo 1,560]

Hi Pg, I got some JKS today. I read your notes on Q1 and do not disagree with most. I see however a lot more benefit to JKS in Q2. Japan 100MW, 115MW to SA, the US market as the company has a solution. Indian market as well. I am aware that you do not have GADP, but perhaps April would be a good place to start. Regardless trends, JKS offers 4% ASP trending, cannot explain more, revenue trending to export growth at 297% and shipment trending 282%. Since the company has already lowest non-poly processing it would be hard to squeeze a penny out of it, but poly could be around 1 or maybe even two. Their poly intake is about 5 grams, which is again leading industry, In few days I got worked up a bit on trading, so I get many ideas on fundamental impulse. However I chose to keep JKS and CSIQ until release. I also have TSL.

[dydo 1,560]

One more thing. I discussed this on SOL thread and people mostly yawned. Inventory for JKS was $84M, those guys are running one of the best supply chains among any solar company. The will sell 50MW of more modules than JA and all from the Q1 production. Those are the most recent pricing modules. No reason (or should be) shrink the spread on GM. Just last observation.

[pg6solar 113]

I will keep JKS until it hits about $20 at which point I will sell 50% (as you know not easy to sell/buy big blocks). Just a note: it is projected to loose ($1.1) in Q1 (on par with JASO) so any similar beat, fast (or even immediate ala JA) run to $15 is not out of realm of possibilities. My biggest regret is not loading up at $4 for all three (JKS/TSL/CSIQ). I know they were all at $2, but the way things were at the time, they might as well all have went under $1 (in which case JKS would have been a history) so averaging down was not an option at the time (preserving uninvested capital was).

[dydo 1,560]

about two weeks earlier than last year. Estimate to lose -1.1 or $24M

[dydo 1,560]

This company's engagement is also in Japan's market and should bring good figures in Q2. I checked Jinko's reporting, did not notice any pre-announcements before,

[dydo 1,560]

According to Jason JKS and YGE with the new rates proposed the other day rushing orders could becoming to those two. He thinks that both are most active in China.

[Guest Lepv123]

historical profits in the future as solar energy will become more and more dominant?