Shares of JinkoSolar (JKS -4.12%) fell hard on Thursday along with the rest of the solar sector, with Jinko down as much as 6.2% before recovering to a 4.3% decline on the day.
The entire solar sector took a hit today, perhaps due to marketwide uncertainty over interest rates and inflation, which tends to heavily affect solar stocks. However, the bulk of the declines were likely due to comments by President Trump, who threatened to stop any solar project approvals in the U.S. going forward.
In a post on his social media platform Truth Social, President Trump posted on Wednesday:
Any State that has built and relied on WINDMILLS and SOLAR for power are seeing RECORD BREAKING INCREASES IN ELECTRICITY AND ENERGY COSTS. THE SCAM OF THE CENTURY! We will not approve wind or farmer destroying Solar. The days of stupidity are over in the USA!!! MAGA
Although the post was made yesterday, it appears major news publications picked up on the potential consequences today. Additionally, JinkoSolar rival Canadian Solar (CSIQ -18.55%) posted worse-than-expected earnings today, highlighting a potential slowdown in Chinese solar deployments in the second half relative to the surge seen in the first half. Jinko is listed on the New York Stock Exchange but is a Chinese company with a base of operations in China and a significant amount of its sales going to Chinese projects.
However, Jinko also sells into the U.S., with 5% of its first-quarter module sales going into the U.S., and a 2GW module manufacturing facility up and running in the U.S. as well.
Image source: Getty Images.
If there were a ban on new solar projects, there are certainly risks to Jinko's U.S. sales and perhaps a risk of stranded capacity for its manufacturing operations in the U.S. too -- though modules from that facility could potentially be sold to other countries in the Western Hemisphere.
Given its relatively low U.S. exposure today, Jinko's stock may appear tempting on this downturn, especially with its sky-high 5.5% dividend yield. However, investors should be aware it can be a very cyclical and low-margin business, with its first-quarter revenue down some 40% relative to the prior year, and its profits swinging to losses. So despite the seemingly cheap valuation, Jinko makes for a risky play at this point.
免责声明:投资有风险,本文并非投资建议,以上内容不应被视为任何金融产品的购买或出售要约、建议或邀请,作者或其他用户的任何相关讨论、评论或帖子也不应被视为此类内容。本文仅供一般参考,不考虑您的个人投资目标、财务状况或需求。TTM对信息的准确性和完整性不承担任何责任或保证,投资者应自行研究并在投资前寻求专业建议。