Roth Capital Affirms JinkoSolar (JKS) at 'Neutral'; Says Downstream Business 'Finally' Being Monetized

October 11, 2016 2:51 PM EDT
Get Alerts JKS Hot Sheet
Price: $15.69 -1.51%

Rating Summary:
    11 Buy, 7 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 21 | Down: 18 | New: 19
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Roth Capital affirms JinkoSolar Holdings (NYSE: JKS) at Neutral with a price target of $18 after the company announced plans to sell its 55 percent Jiangxi JinkoSolar Engineering stake.

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.

For an analyst ratings summary and ratings history on JinkoSolar Holding Co., Ltd. click here. For more ratings news on JinkoSolar Holding Co., Ltd. click here.



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