JinkoSolar Holding Co., a Chinese solar-product maker, said it may be time for the company to buy back its “severely undervalued” American depositary shares, as well as study purchases of project developers to spur demand.
“We’ll choose a proper time period to buy back our American depositary shares,” Chief Executive Officer Chen Kangping said today in a phone interview. “The stock is severely undervalued, so it may be a good time to do so.”
The company, based in Shanghai, announced in May the board agreed to purchase as much as $30 million of its shares for the next 12 months. The stocks have fallen more than 47 percent this quarter. At the end of the second quarter, JinkoSolar had 575.8 million yuan ($90 million) of cash and cash equivalents.
“We’re looking into opportunities of acquiring solar-power plant developers and contractors of engineering, procurement and construction overseas” to boost demand for products, Chen said.
Falling prices for solar products because of overcapacity in China and weaker demand in Europe have forced some companies to close and others to cut operations. Three U.S. businesses including solar module maker Solyndra Inc., which received $535 million in federal loan guarantees, have failed in a month.
Solarworld AG (SWV), Germany’s largest solar module maker, said Sept. 3 it planned to close a factory to reduce costs.
“The consolidation means both opportunities and risks for JinkoSolar,” Chen said. While module prices are expected to decline by about 7.7 percent to $1.20 a watt in early November, European demand will pick up in the next three months, he said.
Earnings Jump
“JinkoSolar is currently focusing on expansion of its existing business of module sales,” he said.
The company reported second-quarter net income expanded 30 percent to 235.3 million yuan from a year earlier, partly spurred by falling raw material costs.
“We bought all the polysilicon from the spot market and enjoyed lower costs when spot prices tumbled,” Chen said.
The company aims to achieve 1.5 gigawatts of capacity each in solar wafers, cells and modules by the end of the year, up 36 percent from the second quarter, it said last month.