Jinko Solar Holding (JKS)

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bookmark this site for China solar. Usually hit pieces. but today's positive.


http://blogs.barrons.com/asiastocks/search/solar/?s=solar


China Solar: Limited Impact From US Ruling, Analysts Say
By Shuli Ren

The U.S. Department of Commerce raised its anti-dumping tariffs and countervailing duties on Chinese solar companies. Trina Solar (TSL), for instance, is now asked to pay 26.71% anti-dumping tariffs and 49.79% countervailing duties versus 26.33% and 15.59% under the preliminary rulings earlier this year. Renesola (SOL) is now asked to pay 78.42% and 27.64% respectively.

But analysts from J.P. Morgan to RBC Capital Markets say the impact of the ruling is limited.

Here is J.P. Morgan’s Boris Kan:

The 2014 final determinations on AD & CVD for Chinese module producers only apply to modules, laminates and/or panels assembled in China using silicon PV cells produced outside China, and do not apply to modules, laminates and/or panels using PV cells produced in China (which will be covered by the 2012 final determinations on AD & CVD). As many major China solar module producers are already producing their own cells internally in China instead of relying on overseas imports, the 2012 AD & CVD rates will be applicable instead. As internal cell production costs are cheaper than overseas imports, we believe major China module producers can still make high single-digit / low double-digit gross margins for module sales to the US based on the current 2012 rates.

On a standalone basis, we believe the DOC’s ruling overnight will have limited direct impact on major listed Chinese module producers as most of their modules sold to the US are already using cells produced internally in China.

And Mahesh Sanganeria from RBC Capital Markets:

We believe the new ruling will have limited impact as Chinese solar companies have adjusted strategy since the preliminary decision.

Chinese solar companies adopted strategies to minimize the impact from the ruling. Three common strategies adopted are: 1) make modules 100% within China and pay tariffs under 2012 AD/ CVD investigation; 2) reduce reliance on the US market by shifting shipments.

Post the 2014 investigation preliminary ruling around mid-year, we believe most Chinese module companies elected to make solar panels fully in China and pay the AD/CVD rate under 2012 investigation. We estimate that gross margin for US shipment is currently in the high-single digit to low-double digit percentage range. We don’t expect any margin deterioration for US shipment following the 2014 investigation final ruling.

Having said that, both brokers said that the 2012 ruling would be under review next February and the Department of Commerce is biased towards increasing the 2012 rates.

December is a bad month for Chinese solar companies, with U.S. anti-dumping rulings and weak oil prices hovering the headlines. ReneSola fell 31.1%, Yingli Green Energy (YGE) dropped 31.1%, JinkoSolar (JKS) retreated 22.1%, Trina Solar fell 16.9%, and Canadian Solar (CSIQ) was down 11%.