Evaluation of Jinko Solar Holding Co., Ltd: What can we expect from the rapid growth and challenges

Abstract

This study aimed to evaluate the company of Jinko Solar and generate a purchase suggestion of its stock (NYSE: JKS). The company of Jinko Solar is currently at its growing stage and is benefiting from the high market demand, high incentives, and high sale price. However, it also faces many market challenges. This study conducted a quantitative measurement of SWOT analysis and relative valuation to understand how these elements contribute to the company’s growth and how it might reflect on the stock market. The SWOT analysis indicated that the strength of the company lies on its size, market share, leading edge technology, and a growing business strategy. The opportunity outruns the weaknesses and risks in the long run, as the company suffers mostly from the current condition of the global market, in terms of economic status and high cost of business. There is one systematical risk presented, which JKS is one of a pre-delisting firm by SEC. However, evidence suggested that it is willing to cope with the regulation. In the relative valuation, Jinko Solar is ranked in the middle against 5 of its competitors in terms of the profitability. The Price to sale ratio indicated a possible undervalued condition. Other parameters, such as return on equity and gross margin, aligned with the company’s growing model as there is a trade off between profit and acquiring market shares. The study concluded with a positive judgement of the growing value of Jinko Solar and the stock of JKS is likely in an undervalued position that is recommended to purchase.