This under-the-radar solar stock can rally 41%, HSBC says
It’s time for investors to load up on JinkoSolar shares, according to HSBC. The firm on Wednesday initiated coverage of the solar producer with a buy rating and a $76 price target. That implies upside of more than 41%. Year to date, shares of JinkoSolar have gained nearly 18%. “JinkoSolar, the world’s largest solar module producer in 1H22 by shipments, is leading the industry race to switch to a more advanced technology,” analyst Daniel Yang wrote in a note. “We think this gives the company a big first-mover advantage.” The company, which is the most balanced integrated solar producer after moving into wafer and cell production, also has strong capacity and sales channels in overseas markets, Yang wrote. It has also seized the opportunity to move the industry forward by commercializing TOPCon, a next-generation solar cell. Jinko also has strong production capacity and sales channels in overseas markets. “In our view, Jinko is ahead of its peers in scalable production, efficiency and cost reduction of these N-type solar products,” said Yang. In the coming years, the entire industry is going to move to “N-type” products — which are more efficient than older “P-type” ones — and see rapid growth. Overall solar demand is rising, also boosting JinkoSolar. And, HSBC sees the price of polysilicon falling next year, supporting margin recovery for downstream producers. This should all drive solid earnings for JinkoSolar, according to HSBC. The group sees robust earnings of CAGR of 58% for 2021 through 2024, a big jump from 21% from 2018 to 2021. “This will be driven by Jinko’s strong shipment growth and margin recovery, led by rising global demand, falling polysilicon prices, a higher pricing premium for new N-type products, and cost reductions,” said Yang. —CNBC’s Michael Bloom contributed to this report. This post has been syndicated from a third-party source. View the original article here.