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explo

JinkoSolar (JKS)

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Yes indeed.  Great margins & no cutback on project development side.  If we ever get any good news out of China on FIT payments then this stock will rocket....

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Looks like JKS did even smarter thing did not connect any plants this quarter, 1007 is the same as last Q. 

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1 hour ago, odyd said:

Fantastic result, ideal for the sector an absolute leader currently. 

Unfortunately, based on analysts participation in the CC, Trina still is (on reputation, not on earnings).

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Deutsche Bank downgraded TSL to $9, playing China card. Some of those people (when they talk on calls) and when they post their views do not appear that intelligent. 

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If they push JKS down any further I will be buying.  No matter what they reported today big boys were taking it down.  Nice run into earnings though.

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One thing to consider is that JKS GM is more poly price sensitive than for example CSIQ and JASO that are more wafer price sensitive. We've seen poly move down a lot and bounce up a lot again while wafer prices didn't move much. A 3 dollar move in poly price could move JKS's panel sales GM 2-3 percentage points. Q1 was likely peak poly GM contribution.

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Another factor working the other way is JKS shipped just over 10% of its total expected vol. in US in Q1.  Those carry high margins (25%).  The split will be 35% first half then 65% second half on 1GW total. The concern seems to be them not raising annual guidance & China demand for Q3.  They stated on CC that they might raise guidance but not until Q2 is announced. This however does not justify the low current stock price.  Should easily be north of $30.....

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I do not believe in the material shortage impacts anymore. There is too much of the capacity to restart that material bottlenecks are not real concerns. I also believe that top players have priority obtaining materials and those will also have preferential pricing. What has got my attention and my wallet is a couple of the figures captured out of the comparisons I produce every quarter.   First, JKS has double of the net income at $48M for almost all, and certainly all CN if I include accretion.  If I run my expectation of reaching potentially $6 per share, this would net $221M if you consider that CSIQ will produce $170M, a repeat of 2015, selling up to $600M worth of solar plants, JKS is in the league of its own. At the peak of its abilities, Canadian-produced $239M in net income. I think the aggressive presence of Jinko in Dubai, capture of the 188MW in Mexico, is creating a second viable presence beside Canadian on the global front. 

I get caught in the FiT discussion, and I think that the picture financially not getting the FiT is not as bad based on the further analysis. Interestingly the ownership sharing now reduces JKS exposure to the problem. The question I have is whether Mexican venture is part of the JV or just JKS. If it happens to be just JKS, we have a great scheme of things to come.  

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Isn't there a deadline (like this year?) for Power to IPO or else they have to return the principal in addition to interest back to the partners? Wasn't the partnership the primary reason JKS was not getting (here) the love it always deserved?

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1 hour ago, pg6solar said:

Isn't there a deadline (like this year?) for Power to IPO or else they have to return the principal in addition to interest back to the partners? Wasn't the partnership the primary reason JKS was not getting (here) the love it always deserved?

I'm actually excited about them getting full ownership of Power again now that they raised almost 1b in project debt, probably helped having CDB as partner.

Edited by explo

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1 hour ago, pg6solar said:

Isn't there a deadline (like this year?) for Power to IPO or else they have to return the principal in addition to interest back to the partners? Wasn't the partnership the primary reason JKS was not getting (here) the love it always deserved?

When was the prescribed period to expire? It has been two years in July, The number for this interest was about $248M at the end of 2015?

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JInko said they had stockpiled the poly if you look at their inventory levels you have over $600M versus everyone around $300 to $400M. I think the problem for stock prices for both, TSL and JKS, was they are guiding module sales higher in H1 versus H2. As I quoted for TSL, they see no improvement in this area, JKS is still out on the conclusion. I think that with the Chile sale they could be looking to add to their guidance and bring closer to about 6GW in third party sales.

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49 minutes ago, odyd said:

JInko said they had stockpiled the poly if you look at their inventory levels you have over $600M versus everyone around $300 to $400M. 

That's good news for Jinko.

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It sounds like they have added 750MW on just first auction to supply to others. Enel is their dedicated buyer. So 1GW in Mexico with 250MW ac just for them. All points to securing markets elsewhere.

Any idea why do they have 4.4% better margin than TSL? They have almost the same plants?

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Enel is also building 580MW in Brazil with Jinko modules. So there is a lot of action for Jinko modules globally.

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6 hours ago, odyd said:

Enel is also building 580MW in Brazil with Jinko modules. So there is a lot of action for Jinko modules globally.

No wonder why they are expanding.  They are securing massive orders in markets which are in their infancy.

As these markets expand so will their orders.  Looks like they are completely dominating in Mexican market.  Looks like this quite possibly could be the sleeper market that explodes.

 

 

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9 hours ago, odyd said:

It sounds like they have added 750MW on just first auction to supply to others. Enel is their dedicated buyer. So 1GW in Mexico with 250MW ac just for them. All points to securing markets elsewhere.

Any idea why do they have 4.4% better margin than TSL? They have almost the same plants?

I think that margin advantage was due to buying spot poly as that likely reduced their cost by penny relative to TSL long term contracts. Think that that advantage will reverse itself over the next quarter or so, but as you commented, JKS is showing a massive inventory build relative to other names. What I don't get is where JKS finds the funds for all this expansion, project development & inventory building.

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Roth Capital affirms JinkoSolar Holdings (NYSE: JKS) with a Buy rating and $30 price target heading into Q216 and expectations of lower ASPs.

Analyst Philip Shen summarized, JKS posted a strong Q1 and Q2 guide as H1 shipments are poised to exceed our prior expectations. Demand in Q3, however, remains a top concern for investors given the potential for an air pocket due to the FIT cut in China expected at the end of June. While we believe China demand could drop by more than 50% from ~5-6GW in Q2 to as low as 2-3GW in Q3, JKS appears well-positioned to weather a potentially weak quarter as we estimate the company may have ~70% of Q3 capacity and ~45-50% of H2 capacity booked. In Q3, JKS’s China mix may fall to 20-25% of overall shipments and much of that may have firm pricing with SOEs. Additionally, with 21% gross margins in Q1, JKS has an industry leading cost structure that positions it well for an acceleration of ASP declines ahead.

Overall, Roth see JinkoSolar as better-positioned versus its peer group on robust margins and diversified revenue streams.

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J.P. Morgan upgrade to overweight from neutral... got it on fly-on-the-wall

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