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1 Solar Panel Manufacturer Shining Through the Clouds

Between the rain, clouds, and fog, developing solar power projects in England might seem counterintuitive. But JinkoSolar (NYSE: JKS  ) certainly doesn't think so.

Last week, it announced an agreement with Lightsource Renewable Energy, the largest developer and operator of utility scale solar projects in the UK, in which it will provide 18.5MWp of solar panels for the development of a new solar farm.


 JinkoSolar Press Release Oct. 4, 2013 

The sunny forecast isn't limited to the UK
Vertically integrated, JinkoSolar offers everything from silicon ingots and wafers, solar PV cells, and solar PV modules. In addition to selling solar produced electricity in China, JinkoSolar is a global leader in the solar market with customers in 30 countries—an improvement on the 20 countries in which it was active in the same quarter last year. The deal with Lightsource is indicative of the importance Jinko places on Europe. Last year, Europe accounted for almost 50% of shipments. Management is eager to diversify, though. This year, Europe only accounted for 25% of shipments, and, in the last earnings call, management noted that they "have reduced [their] reliance on Europe and expanded [their] presence in emerging market such as China, Japan the United States, South Africa and India." 

China thinks they deserve a break
Last week, in an attempt to aid an industry that is dealing with significant overcapacity and weak demand, the Chinese Ministry of Finance announced that it would offer tax breaks to manufacturers of solar power products. They will refund 50% of the value added tax to manufacturers through December 2015.

This decision in also an attempt to aid an industry, which is contending with large amounts of debt. According to the China Renewable Energy Society, the top ten solar panel manufactures are over $16 billion in debt. And, one must not forget last spring's bankruptcy of SunTech Power Holdings, which, at the time, was one of the world's largest makers of solar panels.

Like many companies, JinkoSolar will benefit from this decision, but unlike many companies, JinkoSolar is not suffering from excessive debt. Unlike the other major solar panel manufacturers, JinkoSolar has managed to maintain a positive book value year to date.

JKS Book Value Chart

JKS Book Value data by YCharts

Margins are also shining brightly
JinkoSolar has performed exceedingly well recently; however, it is often overshadowed by some of the larger foreign solar panel manufacturers: Trina Solar (NYSE: TSL  ) , Yingli Green Energy  (NYSE: YGE  ) , and Canadian Solar (NASDAQ: CSIQ  ) . A closer look at the companies' margins and earnings demonstrate just how well JinkoSolar is performing. 


Market Cap.

(in millions)

Gross Margins

Operating Margins

Earnings per ADS

Total Revenue

(in millions)



















Canadian Solar






The Foolish takeaway
There are several different ways to gain exposure to the solar power market, but many investors don't want to get burned by picking the wrong company. For those considering investing in solar panel manufacturers, JinkoSolar certainly deserves a close look. As third quarter earnings are released, I'll be looking to see if JinkoSolar (and other manufacturers as well) can maintain its impressive margins and management of debt.

In terms of guiding toward future margins, JinkoSolar is reluctant to comment, but it has revised guidance on sales. Previously, Jinko was guiding for total solar module shipments of between 1.2 -1.5GW, but they have increased that to between 1.5 – 1.7 GW. Perhaps, this is a sign that there are more blue skies ahead.

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