Wall Street’s Response to Jinko Solar: MEH – May 16, 2010
China-based Jinko Solar withdrew its IPO plans earlier this year due to “poor market conditions.” Jinko manufactures silicon solar wafers, cells, and modules and had hoped to raise $100 million.
Late last week, the firm managed to go public on the NYSE, raising approximately $64million in its maiden offering. Here’s a link to the prospectus. The company’s 5.84 million American depository shares sold for $11 per share — at the low end of the$11-$13 range. Jinko had raised more than $30 million in venture funding from CIVC, Shenzhen Capital, Pitango Venture Capital, et al. in2008.
Obviously, investors are a bit jittery about the solar industry in an environment where slim margins exist for commodity-level wafers and modules — and where soon-to-be curtailed German subsidies might impact demand while the world waits for the U.S. and other markets to take off.
Jinko had sales of $80.4 million in the first quarter, a 20 percent drop from the fourth quarter of last year. Margins grew to 24 percent, from 16 percent in the fourth quarter. Jinkomanaged to make $12.5 million in profit in 2009.
The vertically integrated firm has solar cell and module manufacturing capacities of about 200 megawatts with intentions to grow that capacity to 500megawatts by year-end. This makes Jinko the smaller of the vertically-integrated China-based solar firms like Yingli or Suntech. Jinko has more than 400 customers and a deep relationship with troubled feedstock aspirant Hoku. The prospectus is full of risk statements regardingHoku’s performance.
If a relatively profitable solar firm has such tepid results — what are the prospects for an IPO aspirant like Solyndra?