China’s JinkoSolar promises growth, markets wary

* Shares flat from IPO price on first day

* Management sees capacity near 500 MW by year end

* Lackluster debut underscores uncertainty in the sector

By Dana Ford

LOS ANGELES, May 14 (BestGrowthStock) – JinkoSolar Holding Co Ltd
(JKS.N: ) aims to more than double production capacity this year,
and become a top solar player within five years, but investors’
reaction to the company’s debut on Friday was lukewarm.

The Chinese company, which makes solar cells and modules
and silicon wafers, raised $64.2 million on Thursday by selling
5.84 million American depositary shares (ADS) for $11 each, the
low end of its planned price range. [ID:nN13234356]

The stock rose 1 cent to close at $11.01 on its first day
of trade on the New York Stock Exchange; a day when the broader
U.S. market fell.

Such a flat debut highlights the challenges that the solar
sector faces now as subsidy cuts in Germany, the world’s No. 1
solar market, are scheduled to be implemented in July.

Those cuts have pulled demand and sales for the renewable
power source forward, but stocks have generally not followed as
analysts and investors wait for better visibility.

In a telephone interview with Reuters, members of
JinkoSolar’s senior management team brushed off negative views
on the sector, but gave few forward-looking details. They
declined to comment on the company’s market reception.

“This year is very strong. We see new emerging markets
coming that we think are very active — like the United States,
like China in the future, but mainly in Europe — France, Czech
Republic and also Belgium for example,” said Arturo Herrero,
JinkoSolar’s chief strategy officer, who previously worked for
Trina Solar Ltd (TSL.N: ).

“We are diversifying our risk worldwide,” he added.

The company, which started operations in 2006, has
customers in China, Hong Kong, Germany, the United States,
India, France and Spain, among other countries.

JinkoSolar posted sales of $80.4 million (548.9 million
yuan) in the first quarter, a 20 percent decrease from the
fourth quarter of last year. Margins grew to 23.7 percent, from
16.2 percent in the fourth quarter.

JinkoSolar is one of a handful of vertically integrated,
China-based solar companies working to ramp up their
production. Others include: Trina, LDK Solar Co (LDK.N: ), Yingli
Green Energy Holding Co Ltd (YGE.N: ) and Suntech Power Holdings
Co Ltd (STP.N: ).

The company’s chief financial officer, Longgen Zhang, said
JinkoSolar plans to use proceeds from its offering to fund
expansion. The company expects to increase its annual capacity
to nearly 500 megawatts by the end of this year.

At the end of March, it had solar cell and module
production capacities of 200 MW.

“We think we can move Jinko to the next step, even within
three-to-five years, (to become) one of the top players,” Zhang

Investing Basics

($1=6.83 yuan)
(Reporting by Dana Ford, editing by Leslie Gevirtz)

China’s JinkoSolar promises growth, markets wary