JinkoSolar Holding Co., Ltd.
JKS
recently announced that its board of directors has approved a share buyback worth $200 million of its ordinary shares represented in American Depositary Shares (“ADS”). Buoyed by strong financial strength, the company aims to boost shareholders’ worth through such a repurchase.
Can JinkoSolar Retain Share Buyback?
A share buyback is backed by a company’s ability to generate strong revenues and cash flow. JinkoSolar witnessed a solid 85.9% year-over-year improvement in first-quarter 2022 revenues. Meanwhile, its cash and cash equivalents came in at $155.8 million at the end of March 2022, reflecting a stark improvement from year-ago figure of $1.1 million.
Additionally, JKS’ financial stability can be gauged from its business strength. Hence, it is imperative to mention that JinkoSolar delivered 100 gigawatts (GW) of solar modules globally in March 2022, thus becoming the first company in history to achieve this milestone.
Also, in the last reported quarter, JinkoSolar delivered more than 500,000 ultra-efficiency Modules to one of the biggest Bifacial Projects in Europe, thus reflecting its strong position in the module market, which also fuels its strong cash flow generation capacity.
JinkoSolar expects to witness total shipments in the band of 8.5-9.5 GW in the second quarter of 2022, while for the full year, JinkoSolar anticipates total shipments (including solar modules, cells and wafers) in the range of 35 GW-40 GW. This, in turn, is likely to bolster its revenue generation prospects and ability to generate excess cash flow to boost shareholder return.
Peer Moves
The share buyback is a common strategy undertaken by companies to show their financial strength. To this end, another company that has engaged in the share repurchase activity lately to deploy its excess cash is
ReneSola
SOL
. In December 2021, ReneSola announced that its board of directors authorized the repurchase of up to $50 million of the company’s outstanding ADS. The company had approximately 70 million ADS outstanding at that point.
The Zacks Consensus Estimate for ReneSola’s 2022 earnings has been revised upward by 18.2% in the past 60 days. The Zacks Consensus Estimate for SOL’s 2023 sales suggests an improvement of 25.8% from the prior-year estimated figure.
Price Movement
In the past year, shares of JinkoSolar have risen 9% against the
industry
’s fall of 30.1%.
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Zacks Rank
JinkoSolar currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same industry are
Enphase Energy
ENPH
and
Canadian Solar
CSIQ
, each carrying a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
In the first quarter of 2022, Enphase’s revenues soared 46.2% on a year-over-year basis. For the second quarter of 2022, ENPH expects revenues in the range of $490-$520 million.
The long-term earnings growth rate of Enphase Energy is pegged at 41.3%. The Zacks Consensus Estimate for Enphase Energy’s 2022 earnings suggests a growth rate of 45.6% from the prior-year reported figure.
Canadian Solar shipped around 3.6 GW of modules to more than 70 countries in the first quarter. For the second quarter of 2022, it expects total module shipments between 4.9 GW and 5.1 GW.
The Zacks Consensus Estimate for Canadian Solar’s 2022 earnings suggests a growth rate of 41.2% from the prior-year reported figure. The Zacks Consensus Estimate for CSIQ’s 2023 earnings indicates an upward revision of 4.3% in the past 60 days.
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