MAXN - JinkoSolar: Consolidation Could Benefit Solar Panel Maker As Margins Drop

2024-03-21 07:30:48 ET

Summary

• JinkoSolar's Q4 earnings report caused an initial 10% drop in stock price due to missed earnings and declining profit margins.
• Despite the drop in stock price, JinkoSolar is still leading in cost structure, capacity, and technology in the solar industry.
• The company is expecting increased demand for clean power generation due to the expansion of AI and electric vehicles, and is well-positioned to play a crucial role in the energy crisis and transformation.
• The stock remains the cheapest in the solar industry and is now returning value through dividends and share buybacks.

JinkoSolar's ( JKS ) latest earnings report was not received well and the stock dove initially 10%. The fourth quarter earnings missed and margins took a nose dive. However, according to management the company is still leading in cost structure, capacity and technology. The CEO, Li Xiande, mentioned in the earnings call :

In the mid to long term, the rapid expansion of AI and electrical vehicles may lead to a tight power slide in the world, and the demand for clean power generation is expected to further increase. So far, reduced solar cost has significantly increased the competitiveness of solar in energy sectors. In the future, solar as a new quality productive force is set to play an increasingly important role in face of energy crisis and energy transformation.

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