Emerging solar power product manufacturer,
JinkoSolar Holding Co., Ltd
), declared that it has won a contract from China Guangdong Nuclear
Solar Energy Development Co., Ltd. (CGN-SEDC) for the supply of
photovoltaic (PV) modules. As per the contract, the company will
deliver 30 Megawatt (MW) of modules to the high quality PV power
plant project in Hami city, Xinjiang province of China.
This repeat collaboration between JinkoSolar Holding and
CGN-SEDC signifies JinkoSolar's strong position in China as a
provider of reliable and efficient solar products and services.
This contract is expected to provide a boost to the company's
top-line results and will aid in solidifying its business
relationship with the principal players in the Chinese solar
The solar market in China looks promising. Particularly after
the success of wind energy usage, we anticipate solar generation to
catch up fast in the Chinese market, emerging as a prominent
renewable energy source.
We expect favorable margins for the company as cost of producing
solar PV's is expected to decline in the near term due to continued
investments in technological developments in the generation
process. JinkoSolar is increasingly striving to achieve a
comparative cost advantage over its rivals in the European
However, in the face of economic depression in Europe, the
company's glut in production could result in higher inventories and
cascading average selling prices, a phenomenon noticed
industry-wide. The company's overt reliance on the government for
solar PV deployment could add to costs.
On a more positive note, JinkoSolar has a diversified consumer
base in the US which is increasingly shifting its preference
towards renewables. The presence of a solid customer base will
ensure stable returns for the company. In the near term, the
prospects for renewable energy look favorable for the company's US
However, we believe this benefit could be partially offset by
the US government's recent take on canceling subsidies to
Chinese-based firms, which would hurt the company's operations and
Overall, JinkoSolar's long-term opportunity looks encouraging as
it is continuously strengthening its footprint not only in China
but also in the global market.
JinkoSolar holds a Zacks #3 Rank implying a short-term Hold
rating. The company's closest peer is US-based
MEMC Electronic Materials, Inc
Based in Shangrao, People's Republic of China, the company
together with its subsidiaries, engages in designing, developing,
producing, and marketing photovoltaic products in China, Europe and
(JKS): ETF Research Reports
(WFR): ETF Research Reports
To read this article on Zacks.com click here.