SHANGHAI – JinkoSolar (NYSE:JKS) Holding Co., Ltd. (NYSE: JKS), a leading global solar module manufacturer, announced today that its principal operating subsidiary, Jiangxi Jinko, is planning to issue up to 1,000,519,986 A shares as Global Depositary Receipts (GDRs) on the Frankfurt Stock Exchange in Germany. The move represents a strategic effort to expand the company's financial base, with each GDR equivalent to 10 A shares of Jiangxi Jinko.
The offering is contingent on market conditions and may be adjusted by the board of directors, with the GDRs accounting for no more than 10% of Jiangxi Jinko's total share capital prior to the offering. Currently, JinkoSolar owns approximately 58.59% of Jiangxi Jinko, which is expected to decrease to roughly 53.26% post-offering, assuming full issuance of the proposed GDRs.
The anticipated gross proceeds from the offering could reach RMB4.5 billion, which after offering expenses, are earmarked for several key projects. These include the construction and development of a 1 GW High-efficiency Module Project in the U.S. and a 14 GW Integrated Production Base Project in Shanxi for manufacturing various solar products. The funds will also potentially cover working capital needs and repayment of bank loans for Jiangxi Jinko.
The successful completion of the GDR offering hinges on approvals from Jiangxi Jinko's shareholders, the Shanghai and Frankfurt Stock Exchanges, the Federal Financial Supervisory Authority in Germany, and the China Securities Regulatory Commission. There is no guarantee from Jiangxi Jinko regarding the successful completion, timing, size, or pricing of the GDR offering.
JinkoSolar, with its extensive global presence, has over 10 production facilities and more than 20 overseas subsidiaries, catering to a diverse international customer base. The company's reach extends across various countries and regions, providing solar products and solutions to residential, commercial, and utility-scale customers.
This news is based on a press release statement and does not constitute an endorsement of JinkoSolar's claims or future performance. The completion and success of the GDR offering are subject to various regulatory approvals and market conditions.
In other recent news, JinkoSolar's Q2 earnings fell short of expectations, leading Roth/MKM to reduce its price target from $25.00 to $20.00, maintaining a Neutral rating. Jefferies also trimmed its price target on JinkoSolar following the company's H1 2024 results, which showed a 21% decrease in revenue and a 99% drop in net profit YoY. Despite this, JinkoSolar retained its position as the global leader in module shipments.
Goldman Sachs (NYSE:GS) reiterated its Sell rating on JinkoSolar, maintaining a steady price target of $18.00, after the company's Q2 2024 financial results showed a continuation of weakening gross margins. However, JinkoSolar reported significant growth in module shipments for Q2 2024, despite industry-wide challenges.
The company also completed the delivery of over 1,000 photovoltaic (PV) modules to Ohana Hope Village in Maui, demonstrating its commitment to sustainable energy solutions and community support. Furthermore, JinkoSolar announced a strategic partnership to produce 10 gigawatts of high-efficiency solar cells and modules in Saudi Arabia, aiming for a full-year 2024 module shipment forecast between 100 and 110 gigawatts. These recent developments highlight JinkoSolar's resilience amid industry challenges.
InvestingPro Insights
JinkoSolar's strategic move to issue Global Depositary Receipts (GDRs) on the Frankfurt Stock Exchange aligns with its current financial position and market valuation. According to InvestingPro data, JinkoSolar's market capitalization stands at $1.08 billion, reflecting its significant presence in the solar industry.
The company's financial metrics provide context for this capital-raising initiative. JinkoSolar's Price to Book ratio of 0.37 suggests that the stock may be undervalued relative to its book value. This low valuation could make the GDR offering an attractive proposition for potential investors looking for exposure to the solar sector.
Moreover, JinkoSolar's revenue for the last twelve months as of Q2 2024 was $15.38 billion, with a revenue growth of 7.95% over the same period. This growth, coupled with the company's plans to expand production capacity in the U.S. and China, underscores the need for additional capital to fund these ambitious projects.
InvestingPro Tips highlight that JinkoSolar is trading at a low earnings multiple, which could be appealing to value-oriented investors. Additionally, the company pays a significant dividend to shareholders, with a current dividend yield of 14.54%. This high yield could attract income-focused investors to the GDR offering.
It's worth noting that InvestingPro offers 11 additional tips for JinkoSolar, providing a more comprehensive analysis for investors interested in delving deeper into the company's prospects.
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