JinkoSolar Holding Co., Ltd.

JinkoSolar Holding Co., Ltd. (NYSE: JKS) is one of the world's largest and most innovative solar module producers. As of March 31, 2022, JinkoSolar had developed a vertically integrated solar product value chain with an annual capacity of 40.0 GW for mono wafers, 40.0 GW for solar cells, and 50.0 GW for solar modules.

Key Highlights

• The company reported YoY growth of 85.94% in revenue to RMB 14.76 billion in Q1FY22 (ended March 31, 2022) compared to RMB 7.94 billion in Q1FY21.
• In Q1FY22, JKS net income reduced to RMB 28.94 million from RMB 221.09 million in Q1FY21.  
• As of March 31, 2022, the company had cash and cash equivalents of RMB 15.40 billion and total outstanding debt of RMB 46.43 million.
• JKS’ net margin for Q1FY22 was 2.0%, significantly lower than the industry median of 17.9%.
• JKS has a high leverage, Debt/Equity ratio of 3.39x at the end of Q1FY22 vs. Industry Median of 0.26x.
• JKS’s Q1FY22 cash cycle of 91 days is relatively lower than the industry median of 118 days.
• On May 13, 2022, Memodo GmbH and JKS announced the signing of their first European Energy Storage Solution (ESS) agreement. The Memodo exclusivity agreement for JinkoSolar's ESS product portfolio includes an all-in-one system, a stackable low-voltage and high-voltage storage system, and a single or three-phase hybrid inverter that will cover the D-A-CH region (Germany, Austria, and Switzerland) for 2022 and 2023, respectively.
• Stock is currently trading above its crucial short-term (50-day) and long-term (200-day) SMA support level, a bullish indicator.
• Stock is currently leaning towards the mid-point of the 52-week range of USD 28.45 to USD 66.37.

Conclusion: Considering the company’s strong topline, reduction in profitability,  technical indicators, and associated risks. We recommend a "Watch" rating on the stock at the closing price of USD 52.58, up 4.64%, as of May 17, 2022.

Technical Price Chart (as of May 17, 2022). Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary:

*Closing price as of May 17, 2022.

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above. 

Note 3: The report publishing date is as per the Pacific Time Zone.

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