As Solar Stocks Soar, CSIQ and JKS Are Leading the Way

by Burke Speaker | December 5, 2013 10:36 am

Solar stocks are seeing a boom of late, with Canadian Solar (CSIQ[1]) and JinkoSolar (JKS[2]) paving the way with a 40% growth for the industry.

canadian solar csiq solar stock As Solar Stocks Soar, CSIQ and JKS Are Leading the Way[3]CSIQ stock is up 803% year to date (and up nearly 100% just from the end of September). Similarly, JKS stock has rose 275% in the past six months.

First Solar (FSLR[4]) also rose 64% at the close of September to a Nov. 14 high, and up nearly 100% year to date.

The stocks are pushing the industry to new heights and investors are taking note (via Barchart).

The group has soared more than 40% since the start of the fourth quarter, better than double the advance of the next-best performing industry. The stocks saw broadly mixed financial results in the third quarter.

But China continues to be a critical growth driver, with Chinese government-funded solar projects increasing backlogs across the industry.

Headquartered in Ontario, Canada, with much of the production facilities in China, Canadian Solar has been moving forward at a rapid pace.

Just this week, the company announced that the National Bank of Canada intends to provide it with up to $35 million in short-term construction financing that will be used to finance the construction of an Ontario project.

Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar, said, “The addition of National Bank of Canada, a leading Canadian-based financial institution, comes at an important time for Canadian Solar. We continue to gain significant momentum in our business, punctuated with the recent sales of several utility-scale solar projects.

“Further bolstering our stable of blue chip financial and construction partners across the entire project lifecycle, this transaction gives us additional flexibility and will allow us to further accelerate the development of our already strong, actionable pipeline in Canada and worldwide.”

Solar stocks make their move

It’s not just CSIQ stock making a solar splash. While solar stocks in the past have performed relatively well — the recent increases are showing signs that investors are taking note of new technologies and investment in the industry.

JKS stock has been moving up as well. JinkoSolar Holding Co., Ltd. landed its first profit in Q2, ahead of everyone else (via Seeking Alpha[5]).

Thanks to the newest equipment among peers and debottlenecking-born efficiency, combined with high conversion modules, the company delivered over 18% in gross margins, already cueing a powerful third quarter. Surely enough, Jinko surpassed all expectations.

Jinko earned $0.72 per share[6], with revenue of $320M. Its net income was $16.9M, and revenue-generation per share was $13.9. The net income margin was 5.1%. Jinko’s operating profit margin was 12%. Gross margin was 22.3% on a gross profit of $71M.

FSLR stock has also been showing growth signs of late — up nearly 60% in the past three months due to First Solar making moves beyond what investors had expected.

The company is upgrading and diversifying its technology. As Seeking Alpha noted, last spring “the company purchased start up solar energy company TetraSun. Prior to the purchase of TetraSun the company had been limited to selling solar panels made of (CD-TE) thin film solar panels, but with the technology that it gained from the purchase it will be able to manufacture and market crystalline silicon solar cells by the middle of 2014.”

With more focus on renewable energy across the country, investors should consider giving solar stocks a second look.

Endnotes:
  1. CSIQ: http://studio-5.financialcontent.com/investplace/quote?Symbol=CSIQ
  2. JKS: http://studio-5.financialcontent.com/investplace/quote?Symbol=JKS
  3. [Image]: http://investorplace.com/wp-content/uploads/2013/12/canadian-solar-csiq-solar-stock.jpg
  4. FSLR: http://studio-5.financialcontent.com/investplace/quote?Symbol=FSLR
  5. via Seeking Alpha: http://seekingalpha.com/article/1868991-jinkosolar-a-rock-star-of-the-solar-industry-is-born
  6. Jinko earned $0.72 per share: http://seekingalpha.com/article/1846952-jinkosolar-holdings-ceo-discusses-q3-2013-results-earnings-call-transcript

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