NKLA - Four Shining Solar Stars
According to Solar Industry Magazine, solar accounted for 37% all new electric generating capacity added in the U.S. in the first half of the year, led by Texas and Florida. Wood Mackenzie forecasts 37% annual growth this year. This is a 6% decrease from pre-pandemic forecasts. From 2021-2025, the U.S. solar market is expected to see a 42% increase in installations compared to the prior five years.
The demand is expected to accelerate as the global economy recovers. These four shinning stars are well positioned to benefit from that momentum.
JinkoSolar delivered a solid quarter
On September 23, JinkoSolar Holding Co Ltd (NYSE:JKS) has reported solid second quarter results from April to June. Shanghai-based solar manufacturer delivered a profit of $47 million as it shipped 4.46 GW of modules covering 91 countries and resulting in a turnover of $1.2 billion. It expects to move 20 GW of panels this year as supply and demand have restabilized to keep sales going until the fourth quarter. Gross margin expanded from 16.5% in the same quarter last year to 17.9%. The year-over-year increase was a direct result from increase in self-produced production volume and an integrated high-efficiency-products capacity and optimisation of cost structure.
At the beginning of this unprecedented year, the pandemic caused a shortage of supply in the Chinese market, increasing supply chain prices. Fortunately, prices have stabilized and JinkoSolar expected for strong market demand to continue until the end of the year.
SPI Energy is entering the EV playfield
SPI Energy CO Ltd (NASDAQ:SPI) soared 54% in premarket trading, but that is nothing compared to the prior session’s 1,200% rocket ride. The company that offers photovoltaic solutions for business, residential, government and utility customers, said it was starting an electric-vehicle subsidiary that will compete with Nikola (NASDAQ: NKLA) and Tesla (NASDAQ: TSLA).
Sunworks also had a crazy ride
Meanwhile, shares of Sunworks Inc. (NASDAQ:SUNW) which is in the same photovoltaic model, skyrocketed 353% during Thursday’s premarket hours. They already climbed 50.4% on Wednesday, but ended up rallying more than 500 percent on Thursday, setting a new yearly high. Although it has nothing to do with electric vehicles, SPI Energy was an energy company very similar to Sunworks, so this is what could have excited investors and short-term traders.
Daqo – impressive earnings growth
Daqo New Energy Corp (NYSE: DQ) has an average Strong Buy rating from Wall Street with good reason. Over the past 12 months, the stock has risen 164%. Also pleasing for shareholders is that the stock is up over 70% over the last three months. If we look at ROE to assess how efficiently a company’s management is utilizing the company’s capital, given that Daqo New Energy doesn’t pay any dividend, it is to be assumed that the company has been reinvesting all of its profits to grow its business. But despite the low rate of return, this enabled the company to post impressive earnings growth. With that said, the latest industry analyst forecasts reveal that the company’s earnings are expected to accelerate.
As for the savvy investors who held on to Daqo shares for the last five years, they ended up gaining 642% which certainly justified their investment.
Outlook
Overall, the combined shipment volumes of the top five solar module manufacturers are expected to account for 65% to 70% of the industry for the year as major players have been consolidating. Experts project that the whole Solar Energy Storage market is to grow at a CAGR of 43.92% between 2020 and 2023. Pandemic or no pandemic, the future of solar is bright.
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