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JinkoSolar (JKS) Lifts Fourth Quarter and 2019 Guidance

JinkoSolar Holding JKS recently raised its guidance for the fourth quarter and 2019. The raised guidance is subject to adjustments upon completion of the company's internal review process.

Furthermore, the company expects solar module shipments for 2020 to be in the 18-20 gigawatts (GW) range. As demand for its mono products remains incredibly strong in both domestic and overseas markets, solar module shipments are expected to increase approximately 35% year over year.

Revised Guidance

Per the revised guidance for the fourth quarter of 2019, the company's total solar module shipments are likely to be 4.5-4.6 GW (gigawatt), exceeding the previous guidance of 4.2-4.4 GW by approximately 6%. Gross margin is expected to be 18-20% compared with the previous guidance of 18.5-20.5%.

Further, total revenues for the fourth quarter are expected to be $1.35-$1.38 billion, exceeding the previous guidance of $1.17-$1.23 billion. The Zacks Consensus Estimate for the same is pegged at $1.21 billion, which lies below the company’s guided range.

JinkoSolar also raised its 2019 guidance. Its solar module shipments are now expected to be in the range of 14.3-14.4 GW, compared to the previous guidance range of 14-14.2 GW.

Driving Factors Behind the Guidance Raise

Over the last couple of quarters, JinkoSolar witnessed a significant increase in its shipments and thereby, its total revenues, backed by a rapidly increasing demand for solar products. The fourth quarter was also no exception, wherein the company experienced solid shipment numbers along with an enhancement in its production capacity.

Notably, during the fourth quarter, JinkoSolar delivered 950 MW of its ultra-high efficiency Cheetah 72 cells solar modules to Spain-based X-ELIO. Also, during the quarter, the company supplied 300 MW of its high-energy density Tiger panels for an ultra-high voltage demonstration plant in China.
From the viewpoint of capacity expansions, JinkoSolar made an announcement in November regarding the additional 5-GW expansion of its high-efficiency mono wafer production capacity in Lehsan, China.

The Phase I of the capacity expansion project already reached full capacity by Nov 8, 2019, and further progress is expected to have been achieved by the end of the year. Such a boost in production capacities along with a solid shipment count might have encouraged JinkoSolar to raise its guidance.

Price Movement

JinkoSolar’s stock has declined 0.4% in a year against the industry’s growth of 37.1%.

Zacks Rank & Key Picks

JinkoSolar currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the same space are SolarEdge Technologies, Inc. SEDG, SunPower Corporation SPWR and Enphase Energy, Inc. ENPH. While SolarEdge and Enphase sport a Zacks Rank #1 (Strong Buy), SunPower holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SolarEdge Technologies delivered average positive earnings surprise of 10.28% in the last four quarters. It currently has a solid long-term earnings growth rate of 25%.

Enphase Energy came up with average positive earnings surprise of 34.16% in the last four quarters. The Zacks Consensus Estimate for 2020 earnings has risen 30.9% to $1.27 in the past 90 days.

SunPower Corporation delivered average positive earnings surprise of 182.5% in the last four quarters. In the current year, the company's earnings estimates have seen one upward revision in the past 60 days.

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