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.
Watch out. If you are short, there may be a big money shorter who covers here. Then you know what happens. Or if a big money party decides to buy 100,000 shares or 200,000 shares this morning.
Even if they sold just 200 MW in Q1, the JKS stock should be in the 30s. Likely sold in the 400 to 500 MW range, and stock should be going to 40. They made $2.84 in 2013 including a horrible Q1 in 2013. So with a profit in Q1 2014, stock price should be in the 40s. Should be, but have to exhaust those trying to blast this down.
Utter disaster is priced in to the stock. JKS would have to sell only 200 MW in Q1 to justify this stock price. And they projected in the 400 MW range for Q1, meaning an average of about 700 MW for subsequent quarters.
BUT, and this big, I expect high project development for Q1.
Expect it. They're all doing it. And expect it to be in range, at least. As expected. China always has a slow Q1. But expect high project development to beat the deadline. And expect some projects built in Q4 to be sold in Q1.
Know that the 400 MW projection they made for 2014 is conservative. Who else can build for so cheap in China.
Also know that whatever capacity they have, they will find a buyer for. Their costs are so low, and solar is so well-accepted now, and smaller players falling out, that their panels will be scooped up somewhere.
The best thing that Deutsche said was that capacity is running at near full or full for many companies. Why? Becaue worldwide demand is high! 50 GW to be installed this year versus 30 something last year.
Beyond its own high limit on their range. JASO up huge in premarket.
They ALSO say that selling prices are higher in Q1 than Q4, just like TSL and YGE said. So, we can safely assume that prices for panels are up. Thank you.
Good luck. You may consider covering shorts right now, as some forces are still trying to keep the price down, but as the market realizes that unemployment is down, retail sales are up, World economy is growing faster and more steadily than in the past six years, Europe is growing and not in economic crisis (outside of Ukraine); America is growing faster than since 2008; Latin America is still growing at a fast clip; China is growing at 7% but that 7% is much much larger than the 8% they used to grow at because their economy is much, much larger than before and better organized; that Africa is freer from war than ever before and growing very quickly;
and for solar, installing far more GWs this year than ever before; climate change more pressure than ever before; solar cheaper far more than ever before; solar acceptance far greater; installation costs far less; storage far more affordable;
and there are far fewer solar companies in competition; Europe issues have been resolved; USA issue will likely cause prices for panels to go up and Chinese companies will still prosper because they will still be very cheap.
Think of the 13.33 GW installed, average for the next three quarters! This is unheard of! The 9 GW in the first quarter shattered the previous 1st quarter record.
Plus, the UN just reported that renewable clean energy must be tripled in order to minimize global climate change. Yes, they do not make laws, but they do influence policy greatly. Kerry was very supportive of the new findings.
The scientists of the IPCC, which won the Nobel Prize, are highly influential, and the western nations generally support them. There is a great deal of pressure for China to play their part in implementing clean energy in quick and massive fashion.
Great article at CleanTechnica
talks about the 49 GW projected to be installed this year, meaning that 13.33 GW will be installed each quarter on average from Q2 to Q4.
And more places are reaching grid parity. And China is shifting back to more ground-mounted installations. Projections for installations have gone up recently as a result.
Increased margins do not lie. Prices in China must have risen substantially. Demand for the year is going to be closer to 15 GW than 14, my guess, and the number of suppliers has decreased due to failure of the second-tier companies and third-tier and if there are such thing as fourth tier. All those who cannot compete with the low-cost, high-quality of the JKS, TSL, YGE's of the world. Basically the vast majority of solar panel makers cannot compete; hence the import duties and the second-tiers going out of business.
So, higher demand and fewer suppliers, no massive capacity expansion by the first-tiers; this means that prices will go up.
And so it has gone. Higher ASPs, reported by YGE and TSL. Who will be next? SPWR reports on the 24th. They will say their margins have gone up too. And what must we conclude about JKS? Of course their margins were up in Q1 too.
And what if JKS does not suffer the problems that TSL and YGE had with delayed shipments? What happens if some of the projects interconnected in Q4 were sold in Q1?
What if margins increase like YGE and TSL? What happens when there is a margin of 28% and sales of 480 MW and project sales of 100 MW? What happens then? What happens when investors want to buy 10 million shares in a single day in part because a total disaster is priced in at 25 dollars?
How many people will be willing to buy the stock below 30 dollars when the "surprise" numbers come out. Some of us will not be surprised.
That is interesting. Thank you for the informative post, snake! I saw the YGE news as positive this morning and then the TSL news too, as good news.
Give me higher ASP any day. Both YGE and TSL confirmed that ASPs are higher, and so high that their margins are being pumped in a substantial way.
A one-percentage point increase in margin for JKS means a whole lot of gravy on their already high margins.
Snake, as some may know, is very careful and meticulous about his calculations, so if he says that TSL shoud increase their gross from Q4, that's very good news. Means JKS likely has another dollar-plus quarter.
Important thing to remember for all is that Chinese installations go ballistic for the rest of the year. They take a couple weeks or more off for Chinese new year every Q1.
Make a case. I do want to hear the other side if its a logical argument, not just bashing.
JKS currently has a p/e of about 9, and when it announces earnings in a few weeks, that p/e will go down to the mid-single digits. Like 5, 6, or 7. Unless of course, the price goes up from here, for whatever reason. Maybe because the p/e is 9 with forward p/e of 5.