{"id":2643,"date":"2010-09-23T06:27:01","date_gmt":"2010-09-23T10:27:01","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=2643"},"modified":"2010-09-23T07:34:22","modified_gmt":"2010-09-23T11:34:22","slug":"jinko-solar-sets-fresh-all-time-highs","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2010\/09\/23\/jinko-solar-sets-fresh-all-time-highs\/","title":{"rendered":"Jinko Solar Sets Fresh Highs &#8211; A Near Triple in Four Months"},"content":{"rendered":"<p>Jinko Solar (JKS) got its start in 2006 as a supplier of recovered silicon materials. It is now a vertically integrated solar manufacturer and seller of solar wafers, cells and modules. The company touts its fast growth and low-cost advantage from its Chinese operations. (<a href=\"http:\/\/www.jinkosolar.com\/zhen\/en\/overview.php\">See profile for more details<\/a>).<\/p>\n<p>JKS debuted on the American stock market in mid-May of this year at its IPO price of $11. This occurred just months after the company withdrew previous IPO plans. With a steep correction underway in the general market, JKS quickly plunged 23% in 4 days. At the time, it was easy to dismiss this event as another busted IPO. However, the company came to market as <a href=\"http:\/\/www.greentechmedia.com\/articles\/read\/jinko-solars-ipo-meets-with-tepid-reception\/\">a profitable entity<\/a> with a viable business model. By the time JKS had a chance to <a href=\"http:\/\/phx.corporate-ir.net\/phoenix.zhtml?c=234421&#038;p=irol-newsArticle_Print&#038;ID=1460012&#038;highlight=\">remind investors and traders of its attractive financials in mid-August<\/a>, the stock had already more than doubled from its poor start. On Wednesday, JKS completed a recovered from a one-day drop of 11% earlier this month to set fresh highs. The stock has now almost tripled from its IPO. (Click chart for a larger view).<\/p>\n<p><center><br \/>\n<figure id=\"attachment_2644\" aria-describedby=\"caption-attachment-2644\" style=\"width: 290px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2010\/09\/100922_JKS.jpg\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2010\/09\/100922_JKS-300x256.jpg\" alt=\"The incredible run in JKS continues with fresh all-time highs\" title=\"The incredible run in JKS continues with fresh all-time highs\" width=\"300\" height=\"256\" class=\"size-medium wp-image-2644\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2010\/09\/100922_JKS-300x256.jpg 300w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2010\/09\/100922_JKS.jpg 610w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><figcaption id=\"caption-attachment-2644\" class=\"wp-caption-text\">The incredible run in JKS continues with fresh all-time highs<\/figcaption><\/figure><br \/>\n<strong>(Click for larger view)<\/strong><\/p>\n<p>*<strong>Chart created using TeleChart:<\/strong> <a href=\"http:\/\/www.worden.com\/CURRENTAFPROMO.aspx?AFCODE=866\"><img decoding=\"async\" src=\"http:\/\/www.worden.com\/Content\/Banners\/images\/88x31.gif\"><\/a><br \/>\n<\/center><br \/>\n<\/p>\n<p>The earnings announced August 16 certainly got the market&#8217;s attention. Average trading volume has more than doubled since then (tripling during a brief steep correction) and the stock has increased another 50%. <a href=\"http:\/\/phx.corporate-ir.net\/phoenix.zhtml?c=234421&#038;p=irol-newsArticle_Print&#038;ID=1460012&#038;highlight=\">During August&#8217;s earnings<\/a>, JKS raised Q3 and FY10 evenue guidance above analyst consensus expectations: $145-155M vs. $117M Q3 consensus and $500-525M vs. $419M FY10 consensus. For the quarter, JKS reported a 64% year-over-year increase in revenue to $133M &#8220;&#8230;primarily due to increased global demand for solar products and a significant increase in the shipments of solar modules attributable to the Company&#8217;s enhanced sales and marketing campaigns.&#8221;<\/p>\n<p>Gross profit increased at an even faster 87% year-over-year rate to $36M. Net income was $27M. However, almost a third of the gross came from shifts in foreign exchange:<\/p>\n<blockquote><p>&#8220;The Company entered into foreign currency forward contracts with local banks to hedge its exposure to foreign currency risks. In the second quarter of 2010, the Company recorded a gain of RMB74.6 million (US$11.0 million) from a change in the fair value of forward contract derivatives resulting from the depreciation of the Euro and U.S. dollar against Renminbi.&#8221;<\/p><\/blockquote>\n<p><a href=\"http:\/\/www.cnbc.com\/id\/39317675\">The yuan&#8217;s future appreciation will depend as much on political dynamics as market adjustments<\/a>, but JKS did not discuss the sustainability of the profits from this derivative activity. For reference, a year ago, JKS lost money on its derivative contracts during a quarter in which it reported a loss in net income.<\/p>\n<p>Another concern is the large amount of relative debt. Total debt is $188M but cash levels are only $59M. Total debt to equity is a whopping 80. (See <a href=\"http:\/\/finance.yahoo.com\/q\/ks?s=JKS+Key+Statistics\">Yahoo!finance<\/a> for details). While total assets are $259M, it seems likely that JKS will eventually take advantage of its strong stock price to raise additional capital. <a href=\"http:\/\/www.thestreet.com\/story\/10857350\/2\/solar-losers-gt-solar-jinko-solar.html\">GT Solar&#8217;s (SOLR&#8217;s) announcement of a secondary offer earlier this month may have triggered the brief but sharp sell-off in JKS on September 9<\/a>.<\/p>\n<p>Regardless the uptrend in the stock remains strong and valuations are probably low enough to encourage more buying absent any negative news flow (forward P\/E is 7.9, price-to-sales is 1.8, and price-to-book is 2.8). The recovery from a swift and steep correction to today&#8217;s fresh post-IPO highs is an encouraging technical signal. JKS&#8217;s strong stock performance places it in good company with this year&#8217;s other strong performers in the solar industry (for a brief review of these see &#8220;<a href=\"http:\/\/drduru.com\/onetwentytwo\/2010\/09\/03\/a-stealth-rally-in-solar-stocks\/\">A &#8216;Stealth Rally&#8217; In Solar Stocks<\/a>&#8221; and &#8220;<a href=\"http:\/\/drduru.com\/onetwentytwo\/2010\/09\/07\/solar-stealth-rally-part2\/\">A &#8216;Stealth Rally&#8217; In Solar Stocks, Part Two<\/a>&#8220;).<\/p>\n<p>Be careful out there!<\/p>\n<p>Full disclosure: no positions<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Jinko Solar (JKS) got its start in 2006 as a supplier of recovered silicon materials. It is now a vertically integrated solar manufacturer and seller of solar wafers, cells and modules. The company touts its fast growth and low-cost advantage from its Chinese operations. (See profile for more details). JKS debuted on the American stock &#8230; <a title=\"Jinko Solar Sets Fresh Highs &#8211; A Near Triple in Four Months\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2010\/09\/23\/jinko-solar-sets-fresh-all-time-highs\/\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3,62],"tags":[425,426,1597],"class_list":["post-2643","post","type-post","status-publish","format-standard","hentry","category-solar-energy","category-technical-analysis","tag-jinko-solar","tag-jks","tag-technical-analysis"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Jinko Solar Sets Fresh Highs - A Near Triple in Four Months - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2010\/09\/23\/jinko-solar-sets-fresh-all-time-highs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Jinko Solar Sets Fresh Highs - A Near Triple in Four Months - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"Jinko Solar (JKS) got its start in 2006 as a supplier of recovered silicon materials. It is now a vertically integrated solar manufacturer and seller of solar wafers, cells and modules. The company touts its fast growth and low-cost advantage from its Chinese operations. (See profile for more details). JKS debuted on the American stock ... 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