Image source: Trina Solar.
What: Shares of solar manufacturer JinkoSolar Holding Co., Ltd. (JKS) fell 13% in March after reporting earnings that failed to inspire investors.
So what: Total module shipments jumped over 50% in the quarter to 1.7 GW and revenue rose 50% to $937.7 million. Gross margin fell from 22.8% a year ago to 19.5% in the quarter, although earnings per ADS rose 43% to $53.9 million, or $1.68 per share.
On the balance sheet, where many Chinese companies have run into problems, long-term debt was $1.59 billion, with $760.3 million associated with power projects. JinkoSolar's transition to building more projects has been more successful than most solar manufacturers', and investors should see that as a strength for the company.
Now what: Shares of Chinese solar manufacturers can be up and down, depending on the market's mood -- and in March the market didn't see a reason to buy. That could partly be due to lagging oil prices, which had started to rise sharply in February. It could also be a less bullish sentiment for solar stocks, which has affected most large module suppliers. But long-term, JinkoSolar is making the right moves to be competitive, so I wouldn't bail out on shares after a bad March because; this volatility is just part of investing in the solar industry.
