Chinese solar manufacturers have been built on an unsustainable foundation of short-term debt from state-run banks. Companies like Suntech Power (STP), Yingli Green Energy (NYSE: YGE), Trina Solar (NYSE: TSL), and LDK Solar (NYSE: LDK) all have more than $1 billion in debt, an unsustainable amount for companies reporting massive losses.
But we may be seeing a peak into whom China will choose to emerge as a long-term winner, and what qualities it's looking for. Jinko Solar (JKS -0.28%) just received a $1 billion loan from the China Development Bank to build solar projects in Europe. The company had a 9.9% gross margin last quarter and less than $400 million in debt, both far better than most of the Chinese competition. So could Jinko be one of the few that survive?
