Jinko Solar (NYSE:JKS) may not be the first name you think of when turning to the solar industry for a potential investment, but the Shanghai based company is the global leader in solar panel manufacturing. Jinko provides solar panels to nearly every country in the world, but has a massive user base in its domestic market of China. The company also works closely with clients in India, the United Kingdom, Japan, South Africa, the United Arab Emirates, and Australia. Learn more
Jinko’s stock price surged through 2020, and the company exhibited excellent growth despite the ongoing COVID-19 pandemic. With only a $1.44 billion market cap, Jinko’s stock is at a miniscule price to sales ratio of 0.04, and is currently trading at a depressed price level. The 52-week price ranges from $13.67 to an inflated price of $90.20, so the current price of around $30.00 per share shows the downside and volatility of the renewable energy industry.
The Bearish Case: Solar can be a volatile industry as shown with Jinko’s fluctuating stock price over the past year. Despite its revenue growth and lower margins, Jinko is still less popular amongst investors and a large part of that may have to do with it being operated out of China. There is a strong bias, especially from American investors, who are fearful of the looser regulations and dishonest sales reports that Chinese companies have been known to do. Is that reasonable? That’s certainly up to the personal risk tolerance for a given equity. With a company of this size, there is always the potential of being acquired or bullied out of a given market, especially with European energy conglomerates making a strong push towards renewables.