JinkoSolar Technology plans to list on the Hong Kong Stock Exchange to advance its globalization strategy and accelerate the integrated development of its market, supply chain, and research and development.
Due to insufficient demand and adjustments in the global supply chain, JinkoSolar’s revenue dropped by 9.39% year-on-year in the first three quarters of 2024, resulting in the company’s first net loss since 2016.
To optimize its capital structure and reduce its debt-to-asset ratio, JinkoSolar is employing measures such as asset transfers and issuing innovative financing tools, including public REITs for infrastructure.
Additionally, JinkoSolar plans to gradually transfer portions of equity in some of its subsidiaries to external shareholders as part of a market-driven debt-to-equity swap.
Securities analysts are optimistic about JinkoSolar’s performance, predicting a net profit of 2.7 billion yuan for 2025, with a target price capped at 14.95 yuan.
If the upcoming listing in Hong Kong is successful, it will significantly improve JinkoSolar’s cash flow and debt-to-asset ratio. On February 21, the company held its sixth board of directors’ meeting and the 19th supervisory board meeting, during which it approved several resolutions regarding the issuance of H shares and the listing on the Hong Kong Stock Exchange.
JinkoSolar stated that the purpose of issuing H shares is to further propel its globalization strategy, enhance its international capital operation platform, strengthen its brand image, and improve its capital capacity and overall competitiveness.
Following the China Securities Regulatory Commission’s announcement of five capital market cooperation measures to support qualified mainland industry leaders in listing in Hong Kong, the Hong Kong regulatory authorities have also further optimized the review process for A-share companies seeking to list in Hong Kong. The Hong Kong Stock Exchange has announced a fast-track approval process for A-share companies with an anticipated market value exceeding HK$10 billion. Against this backdrop, numerous A-share companies are actively pursuing financing in Hong Kong. In January of this year, Hengrui Medicine officially submitted its application for a Hong Kong listing, while CATL followed suit in February. The latest development is that JinkoSolar, a leading company in the photovoltaic silicon wafer sector, announced in late February its plan to issue H shares and apply for a listing on the main board of the Hong Kong Stock Exchange.
JinkoSolar is a globally leading provider of photovoltaic power generation solutions, offering a vertically integrated supply chain that includes silicon wafers, cells, modules, and photovoltaic power plants. Its products and services are available in over 100 countries and regions worldwide, with module shipments ranking among the top for several consecutive years. According to the company’s financial reports, JinkoSolar’s total revenue has been steadily increasing from 25.84 billion yuan in 2020 to 81.55 billion yuan in 2023. However, due to insufficient demand, adjustments in the global supply chain, and gradual capacity releases, the revenue growth trend has changed in 2024.
Data from Wind indicates that JinkoSolar achieved total revenue of 54.348 billion yuan in the first three quarters of 2024, marking a 9.39% decline year-on-year. The company also reported its first net loss since 2016, amounting to 858 million yuan. According to JinkoSolar’s latest financial forecast for 2024, it expects a loss of between 4.5 billion to 5.2 billion yuan. The company attributed this substantial loss to three key factors: a significant decline in the prices of its main products, an increasingly severe international trade environment, and the need for impairment testing and provision for long-term assets showing signs of impairment.
During an interview in December 2024, JinkoSolar’s Vice President and Secretary of the Board, Wu Tingdong, acknowledged that the photovoltaic industry faced serious mismatches between capacity and demand in 2024, impacting not only the main supply chain but also various segments, including ancillary materials. Consequently, product prices in the market have continued to decline, with module prices dropping to about one-third of the levels seen in the same period last year, which significantly affected the company’s stock price.
Regarding future growth expectations for the photovoltaic industry, Wu expressed caution, noting that after experiencing high annual growth rates of 40%-50% over the past few years, the growth rate is expected to decline significantly. Over the next 3-5 years, he projects growth of between 10% and 20%, with hopes that by the second half of next year (2025), supply and demand could achieve balance in certain sectors, gradually restoring the industry to a reasonable operational level.
As the second half of 2024 sees the photovoltaic industry taking self-regulatory actions and downstream demand gradually recovering, reports emerged on February 26 indicating that leading companies in the photovoltaic sector are raising module prices. For instance, Longi Green Energy increased its module price by 0.05 yuan per watt, while JinkoSolar and Trina Solar raised their prices by 0.03 yuan.
In response to these changes, an employee from Longi Green Energy’s investor relations department confirmed minor price increases but noted that whether these supply-demand changes would form a trend remains to be observed.
Convertible bond investment project construction extended by one year According to Wind, JinkoSolar’s debt-to-asset ratio has been steadily increasing, rising from 58.3% at the end of 2022 to 64.3% at the end of 2023. By the end of September 2024, this ratio further climbed to 72.2%. Among the top ten companies in the photovoltaic sector by market capitalization, JinkoSolar has the highest debt-to-asset ratio, followed closely by JinkoSolar Energy, which reported a debt-to-asset ratio of 71.9% as of September 2024. In contrast, leading companies in the sector, such as Sungrow Power and Longi Green Energy, reported debt-to-asset ratios of 65.8% and 59.2%, respectively.
Data shows that JinkoSolar’s interest-bearing debt has been growing rapidly, with short-term loans increasing from 979 million yuan at the end of 2023 to 10 billion yuan at the end of September 2024. During the same period, long-term loans rose from 1.48 billion yuan to 13.64 billion yuan. The high levels of interest-bearing debt have increased JinkoSolar’s financial costs, with interest expenses amounting to 440 million yuan in 2022 and 510 million yuan in 2023, which surged to 730 million yuan by the end of the third quarter of 2024. In light of this situation, credit rating agency Dongfang Jincheng noted in JinkoSolar’s 2024 annual tracking rating report that due to capacity expansion and business growth, the company’s total debt has significantly increased and remains substantial, indicating that future debt levels will likely continue to rise due to ongoing and planned investments.
In 2023, JinkoSolar issued convertible bonds to raise 9 billion yuan for capacity expansion. However, amid fierce market competition and significant adjustments, the originally planned investment projects had to be postponed. The announcement revealed that the “Baotou Jinko (Phase III) 20GW crystal pulling and slicing project,” funded by the convertible bonds, has had its construction period extended by one year, moving the expected production start date from June 2024 to June 2025.
Moreover, JinkoSolar’s asset scale has been consistently growing, increasing from 106.589 billion yuan at the beginning of 2024 to 116.288 billion yuan by the end of September 2024. In contrast, the company’s shareholders’ equity has seen a decline for the first time in recent years, falling from 38.004 billion yuan at the beginning of the year to 32.385 billion yuan by the end of September, reflecting a drop of 7%. If the upcoming listing in Hong Kong is successfully executed, it will not only enhance JinkoSolar’s liquidity but also help reduce its excessively high debt-to-asset ratio.
To optimize its capital structure and lower its debt ratio, JinkoSolar has also been gradually transferring shares of some subsidiaries to external shareholders. In 2022, the company transferred part of its equity in Jinko (Yangzhou) Solar Technology Co., Ltd. to external investors, including Oriental Asset and Agricultural Bank’s Agricultural Bank Financial Assets, as part of a market-driven debt-to-equity swap. In July 2024, JinkoSolar repurchased the equity held by Oriental Asset in Jinko Yangzhou. According to company records, JinkoSolar’s Vice President Yang Aiqing is currently the chairman of Jinko Yangzhou. The announcement indicated that Jinko Yangzhou’s debt-to-asset ratio decreased initially after the transfer but subsequently climbed again. As of June 30, 2021, Jinko Yangzhou’s debt-to-asset ratio stood at 51%. By March 31, 2024, despite Jinko Yangzhou’s total assets expanding nearly sixfold, its debt-to-asset ratio rose to 76.7%, with total debt increasing from 2.9 billion yuan at the beginning of the year to 27.9 billion yuan.
To further reduce its debt ratio and improve its debt structure, JinkoSolar has implemented various strategies, including asset transfers and the issuance of innovative financing tools. For instance, the company initiated the application and issuance of public REITs in 2023, using some of its photovoltaic power generation projects as underlying infrastructure assets to enhance asset turnover and lower leverage. According to JinkoSolar’s 2023 annual report, its REITs have been submitted to the National Development and Reform Commission and are currently in the feedback stage. The latest update from JinkoSolar on February 18 indicated that the REITs project is still under review by the National Development and Reform Commission.
As the photovoltaic industry’s conditions gradually improve, JinkoSolar’s stock price and performance expectations have garnered positive attention from several securities analysts. For example, analysts from Huatai Securities, including Shen Jianguo, Bian Wenjiao, and Zhou Dunwei, stated in their research report at the end of January this year that the effects of industry self-regulation are becoming evident, with prices for silicon feedstock, silicon wafers, and solar cells all rising since the beginning of the year. As a leading integrated module company, JinkoSolar possesses strong cost control capabilities and is expected to benefit significantly from the industry’s profit recovery. They forecast JinkoSolar’s net profit attributable to its parent company for 2025 to be 2.7 billion yuan, with a target price of 14.6 yuan. Analyst Xu Boqiao from Haitong Securities also believes that JinkoSolar’s brand and channel advantages in overseas markets will help the company steadily increase its market share and profit levels abroad. He predicts that the company will return to profitability in 2025, with a projected net profit of 2.911 billion yuan and an upper target price of 14.95 yuan.
