JKS owns 55% of Jinko Power and Jinko Power spins off the IPOs. As it works out, if the IPO is 800MW and sells for $2.5 per watt, then it will cost JKS about 1 billion to build and sell for 2 billion. The partners will pay about $720 million and get back $900 million, making $180 million. JKS will spend 1 billion and get back $1,820 million making $820 million. If the IPO sells for $3 per watt then the partners make $360 million and JKS makes $1,040 million. As JKS builds plants and the plants go on the grid the plant goes into Jinko Power and the partners give JKS $2 per watt for 45% of the watts. At the rate JKS is going Jinko Power may spin off two IPOs in 2015. The easy way to look at it is if the IPO sells for $2.50 per watt then JKS makes about $1 per watt or if the IPO sells for $3 per watt then JKS makes about $1.25 per watt. On the panels that JKS sold in Q2 JKS made an average of about 15 cents per watt.
Sentiment: Strong Buy
Sometimes that's the case but in this case JKS gets a big chunk of cash and still owns 45% of the the spun off company - Jinko Power.
JKS should be valued at least the same level as SUNE, which has a market value of 6 billions, when its YieldCo go IPO. Note JKS is profitable vs. SUNE still bleeding.
SHANGHAI, Aug. 22, 2014 /PRNewswire-FirstCall/ -- JinkoSolar Holding Co., Ltd. ("JinkoSolar" or the "Company") (JKS), a global leader in the solar PV industry, today announced that JinkoSolar Power Co., Ltd.("Jinko Power"), a subsidiary of the Company has signed project investment agreements with the local government of Hengfeng county in Jiangxi Province to develop totally 100 MW PV projects. Jinko Power will own the projects and will manage the project investment and EPC as well as operations and maintenance.
According to the terms of the agreement, Jinko Power will invest approximately RMB 800 million for the projects, and the project will receive subsidies of RMB1.2 per kWh. Construction has begun in the third quarter and is expected to complete in the fourth quarter of this year. After the completion, those projects will generate around 110 million kWh electricity annually, generating approximately RMB132 million revenue per year.
"Our power plant development has traditionally been in northwestern China but is now gradually moving towards China's southern and eastern coasts resulting in a more balanced geographic mix," commented Mr. Xiande Li, Chairman of JinkoSolar. "By diversifying the geographic mix of our downstream business, we are working to maintain our leading position in the industry. Each year, the development of projects in western China is impacted by the region's severe cold winter. Weather in China's East and South however, is much more moderate by comparison. By continuously enhancing our cooperation with local governments, as well as our excellent development capabilities, JinkoSolar has built an extensive project pipeline. Our strong financial position and technological know-how will allow us to construct projects all year round. With these agreements, we will provide clean energy, create local job opportunities, improve the environment, and contribute to local economic development."
Sentiment: Strong Buy
JKS is impacted by the leading sheep CSIQ which need a little bit rest today after running for days. JKS will be getting close to CSIQ, and will be leading Solars next Q.
be patient... wait till Sino-US deal come out... and, certainly the new policy (from China) which is designed to benefit the entire sector... again, China really needs solar energy... or, more and more people would want to move to other places to live.. it is just too murky... the nation is determined to change it... they need blue skies... period.