Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of JinkoSolar Holding Co., Ltd. (NYSE:JKS) fell as much as 11% today on a variety of negative news items.
So what: First, the U.S. Department of Commerce issued a new solar tariff that will add 26.89% to the cost of JinkoSolar's panels in the U.S., likely killing its market here. Then there was the report that SolarWorld has submitted evidence to European Union regulators that claims Chinese companies have been selling panels for below the negotiated minimum price to avoid tariffs on Chinese solar imports. JinkoSolar was specifically called out in the report.
Now what: If tariffs indeed hold up in the U.S. and the European Union finds that JinkoSolar violated the price minimum, it could be devastating for exports to two of the largest solar markets in the world. This saga is far from over, but this is a huge risk for Chinese solar stocks, which have been helped by Chinese state run banks, where the allegations of subsidies comes into play. I think Chinese solar stocks in general are too high a risk and would avoid buying in right now.