Roth Capital Affirms JinkoSolar (JKS) at 'Neutral'; Says Downstream Business 'Finally' Being Monetized
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Analyst Philip Shen commented today,
After a long three years of exploring strategic alternatives for Jinko Power, JKS management finally developed a way to monetize its downstream business. We see the downstream sale as an incremental positive as the transaction could significantly improve the company's balance sheet and enable the company to reduce exposure to continued delays of FIT payments in China. Our analysis suggests the $250mn in cash to be received from the sale combined with the removal of an estimated ~$1bn of associated debt from JKS's balance sheet could reduce the company's net debt to total capital ratio to 44% from 71%. While we expect oversupply challenges in the module business to continue to weigh on JKS into 2017, we see the company's downstream spin-off putting the company in a position of greater financial strength.
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