Now they have the money and they recently took over some extra capacity from smaller competitors. The growth from the Extra capacity will be reflected in their guidance. The solar demand and supply will reach parity in 2014H2. Since China limited new capacity, the only way to grow is either by higher ASP or higher capacity. JKS is the ONLY Chinese company that well positioned to buy other's capacity and they did. Coupled with higher expected ASP, the guidance will be explosive! I would expect 20%+run up the day after earning! I will not be surprised to see 50+ after earning. I ran out of cash, otherwise I would buy more for sure.
0I would not state they are the "only" company poised to buy other distressed assets as other companies have bought assets like Shunfeng bough 1.6GW of cell/module capacity and suddenly was a big player in China. But they are poised to have a very strong 2014.
The optimism that many have on a rising ASP is likely to be tempered by Poly now at $21/kg in China adding upwards of $0.025 in costs as well as other supplies likely getting a significant increase in prices of 10-20%. Across the board the near $0.30 in material costs should be climbing around 20% this year. Some will be offset by consumption.
China ASP will not be increasing 20% so the $0.60 blended ASP may rise but will be offset by increased shipments to low cost China. This is a positive for some as it has lower Opex costs by some $0.04-$0.05 cents vs shipping to Europe and the US.
In General, I expect that margins for modules will remain relatively flat through 2014 in th3 15-20% range for JKS while others might be a little lower. It all depends on the blend of international vs national.
For example SOL will have a far higher ASP as they focus on over seas sales. This will push them towards $0.68-$0.70 for an ASP. However their costs due to lack of cells is around $0.60 +. If poly rises and other materials due their costs settle in above $0.60. Thus they make $0.06-$0.08 gross of around 11.5% to 14.5% for 2014 as the high ends of the module business.
I would not state a 15-20% pullback after a 1500% rise in the past year getting slammed. Once this dead news period is over and the real fundamentals come out for 2014, this stock should do quite well and will likely exceed all expectations of analysts and most people. The earnings of around $3 that some analysts have is likely to be far higher than that. If they come close to Q3 2013 earnings powers, then they should be able to push earnings well exceeding $5 a share even after dilutions.
This is all manipulation, think about what we do know. We know that JKS just picked up over a quarter of a billion dollars. JKS will be able to increase production by 2.5GW to 3GW per year. JKS will be buying the production capacity at around 15 to 20 cents on the dollar. JKS will make a billion dollars or more on the buy. This will increase JKS's margin by dropping the average cost of production. JKS is also increasing the power generated from 16% to 18.5% which will also increase margins. The big boys know that JKS is going up in the near future so they are running it down now. If things don't change sooner, I think that SPWR's earnings on Feb 12 will turn the solar stocks around. In other words there are only(as many as) four more shopping days until solar stocks move up.