Chinese solar photovoltaic (PV) power product manufacturer
Holding Co., Ltd.
) has announced the closing of its follow-on public offering of
approximately 4.4 million American depositary shares (ADS). This
includes approximately 0.6 million ADS, which the underwriters
purchased to cover over allotments. In the offering, each ADS
represents four ordinary shares at a par value of $0.00002 per
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JinkoSolar managed to accumulate net proceeds of approximately
$67.8 million from the issuance. The company intends to utilize
the net proceeds to fund for general corporate purposes,
including construction of solar ventures and expansion of
Initially, JinkoSolar announced that it will offer 3.5 million
ADS. On Sep 9, 2013, the company increased the number to 3.8
million ADS, at $16.25 per ADS.
As of Jun 30, 2013, JinkoSolar had approximately 22.2 million of
diluted ADS outstanding. With the current offering, the company's
outstanding ADS will increase to roughly 26.6 million.
Earlier, Chinese solar product manufacturers earned a major part
of their revenues from the U.S. market. However, the U.S.
government has implemented several clauses to control import
volumes from China, while encouraging domestic players to promote
their solar products in the U.S. market. These regulations have
made the solar market more competitive for Chinese solar product
manufacturers operating in North America. The U.S. solar markets
are thus becoming less lucrative for the Chinese solar module
manufacturers. Therefore, currently, the Chinese companies are
exploring new prospective markets while strengthening their
presence in China. The companies are investing substantially to
expand their footprint in different geographies while continuing
with their research and development (R&D) activities to
As of Jun 30, 2013, JinkoSolar had a cash balance of $74 million,
which is not sufficient to sustain its expansion as well as
Apart from issuing ADS, JinkoSolar borrows from the financial
institutions to meet its financial requirements. In Apr 2013, the
company entered into an agreement with China Development Bank for
a 15-year loan of approximately $58 million. The main objective
of taking loan is construction of a PV solar power plant for
expansion and strengthening of the company's Chinese operations.
We believe JinkoSolar's efforts in expanding its operations and
upgrading technologies will help to gain more contracts going
JinkoSolar currently has a Zacks Rank #2 (Buy). Other stocks in
the industry that are worth considering include
) with a Zacks Rank #1 (Strong Buy), and
JA Solar Holdings Co.,
), each with a Zacks Rank #2 (Buy).