You borrow money, build a plant, sell the electricity. The electricity pays more than the interest. A lot more. Look at their electricity sales. That's why there is debt, in part. Now they are putting together a structure where people can invest in the solar plants and get a stream of returns, and JKS takes the rest of the money on the electricity.
JKS interconnected about 100 MW in Q4 and about 50 MW in Q3. I think they retained more of the projects in Q4. They doubled their projects interconnected but their earnings did not increase as much as one might expect. They may be retaining more projects or they may not have had time to sell the projects in Q4, meaning they may have sold some of the Q4 interconnected in Q1. My guess. And of course, they interconnected more in Q1. According to their estimates, they will interconnect at least 100 MW on average per quarter in 2014.
The global solar power industry has enjoyed a strong start to 2014 in terms of corporate funding, attracting US$7 billion in the first quarter alone, according to a new report by clean energy consultancy firm Mercom Capital.
The US$7 billion figure, including venture capital (VC), private equity (PE), debt financing and other equity financings raised by private companies, showed a growth of US$2 billion from the previous quarter.
See Mercom report at pv-tech.org
Finally, project acquisitions also enjoyed a record quarter, Mercom claims. Over 1.7GW of solar projects changed hands in the quarter, across 42 transaction with a financial value of US$1.5 billion in total. This included as its largest single deal the purchase of 400MW of plants in China by United Photovoltaics Group
It takes one day to cover if they all cover on that one day. And if they did all cover on one day, this JKS stock would go up at least ten dollars. Best bet for shorts is trying to cover over the course of a week or two. But who covers first? Everyone wants to cover early in the case of a stock on the uprise. If I were short, I would try to cover before a big money entity tries to cover a hundred thousand shares or something.
the same people who screwed the longs will try to screw the shorts. that is the only thing you can count on. One of these big money traders may initiate a short squeeze tomorrow if conditions are right.
Crazy, completely unrealistic: they sell only half of the panels and half the projects interconnected as they did in Q4. Same amount of electricity sales (impossible, as they will have more). And they earn only 60 cents per share. Add that to the previous three quarters, and JKS has made $4.00 over the last four quarters. And with a stock price of 28 dollars (it is 25 right now), they will have a p/e of 7. Investors believe they deserve a p/e of 10 and the stock goes to 40.00 dollars.
fundamentals always come back as the force behind the stock price. Let's say they make only 60 cents in Q1. That is less than half of Q4. That gives them a $4.00 ttm earnings record. Where does the stock price go?
All of their panels will sell out this year. If you are selling your oil for 80 dollars a barrel and others sell it for 95 dollars, will you sell out of your oil? Even if people don't drive as much in January and February? Your customers will buy and ask when you will get more of that 80 dollar oil.
When earnings come out, we will all find out how many tens or possibly over 100 MW of projects they sold in Q1. They completed well over 200 MW of projects before 2014. And then more in Q1. Look at all the deals they signed in 2012 and 2013; all those projects means one thing: that 400 MW estimate of project interconnections in 2014 is conservative.
How do I know that they sold some projects, as they rarely put out any press releases -- actually never put out press releases regarding these sales? Well, they completed quite a few projects in Q4. All of China was in a rush to complete projects before end of year. Also probably many projects completed before Chinese New Year.
When do they have time to sell the projects? After connection, in Q1.
That is my prediction. See my previous post for the back of envelope numbers.
Give that a p/e of 10 and you have a $44 stock price.
Drawing from my previous post, why do I think they will make 1.00 dollar in earnings in Q1? Well, lower shipments but higher margins. Sell some projects, and the estimate is pretty conservative.
IN q1 of 2013, JKS lost 56 cents. In 2013, they earned 2.84, all non-GAAP, as others all report non-GAAP. So, if they make 1.00, that will be a $1.56 difference from their 2013 earnings. So the trailing twelve months earnings will be $4.40.
JKS deserves a 15 p/e. In a couple weeks, it will deserve over 45 dollars in stock price. Now when or how that happens, or if that happens, I do not know. But the ttm earnings will likely be in the 3.50 range in a couple weeks, when earnings come out. And some major firms will say that yes, the stock should worth far, far more than 25.70.
If they pre-announce, we will learn this sooner. But what does 3.00 dollar earnings mean?
It means the stock is worth at least 40 dollars.
YGE, TSL, and JASO all reporting excellent gains in margins. ASPs are up. That's the common factor. ASPs that will drive JKS margin up close to 30. ASPs that will increase TSL profit despite drop in shipments.
YGE up 5%; yes, the real issue is and has been margins. The shift of focus was put on YGE's temporary dent in shipments to drive the stocks down. Margins, margins, margins. Been the issue for ten years now in solar, and JKS has the highest margins.
The lower shipments are already priced in; looking at higher margins instead. More important are the higher margins. The panels WILL be sold. ALL of the top tier panels will be sold, just a matter of what price.