September 12th, 2022 | 10:30 CEST
JinkoSolar, TubeSolar, Nel ASA - The innovations of the future
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Born and raised in Hannover, Lower Saxony follows social and economic developments around the globe. As a passionate entrepreneur and columnist he explains and compares the most diverse business models as well as markets for interested stock traders.
JinkoSolar - Growth and in the red
One of the global market leaders is JinkoSolar. The Company has over 15,000 employees in 7 manufacturing plants and 15 sales offices. Despite a tense market environment, the Chinese group achieved sales of around USD 2.72 billion in the months of April to June, an increase of 138% compared to the same quarter last year. In addition to the acceleration of the energy transition, the reasons for the increase in demand were the faster switch to alternative energies due to the Ukraine conflict. As a result, 10,532 MW of solar capacity, including 10,183 MW for solar modules and 349 MW for cells and wafers, was shipped in the second quarter, around 100% more than in the second quarter of 2021.
Despite the high growth revenue, the solar giant slipped into the red in the reporting period. The reasons were once again higher production costs due to a sharp increase in the price of the urgently needed raw material polysilicon. Added to this were electricity rationing measures imposed by the local government in Sichuan province, negatively impacting production plant capacity. As a result, the net loss was USD -90.3 million, compared with a profit of just under USD 10 million in the second quarter of 2021.
Management continues to see uncertainties in business performance for the current fiscal year concerning the power rationing measures in Sichuan province, as it is unclear how long these will last and when the plants will be able to resume full production. JinkoSolar CEO Xiande Li expects annual production capacity to reach 60 GW for wafers, 55 GW for cells and 65 GW for modules by the end of 2022 after the adjusted capacity expansion.
Analysts at US investment bank Goldman Sachs continue to see the Chinese solar cell and solar module producer as a "sell" candidate. Analyst Brian Lee expressed skepticism for the coming quarters. Problems with logistics, political uncertainties and rising production costs could have a negative impact on earnings. Nevertheless, the analyst raised the price target from USD 31 to USD 35. JinkoSolar's share price is currently significantly higher at USD 60.82.
TubeSolar AG - Highly innovative technology
Besides the established players in the PV market, TubeSolar AG, based in Augsburg with a stock market value of EUR 52.81 million, is still completely unknown to most investors. However, its innovative agri-photovoltaic technology could provide a significant upgrade in case of a possible entry into the mass market. Currently, the biggest problem with expanding solar energy is the scarcity of the required raw materials and the consumption of arable land. Due to the solar boom, more and more solar parks are being built on former farmland, disappearing from agricultural production and therefore unavailable for food supply.
The Company, formed in 2019 from a successful transformation of the former Osram/Ledvance, is breaking through this either-or principle with its patent-protected technology for manufacturing innovative photovoltaic thin-film tubes. These tubular modules hang up to 10m above agricultural land, are permeable to water and light, and reduce soil erosion. Thus, this enables the combination of energy generation through sunlight and preserving scarce land for cultivation.
In addition to Agrivoltaics, another focus area is developing the solar energy business in green roofs. The fluorescent-tube-shaped modules offer considerable advantages compared to conventional, flat silicon modules. Due to the cylindrical shape and the existing gaps, water and light radiation reach the underlying vegetation over a large area. At the same time, electricity is generated from the incoming sun.
In the course of the year, the transition to automated production will be completed, and the first production line will be started. Over the next few years, the goal is to expand to up to eight production lines with an annual production capacity of 250 MW. With the successful completion of a capital increase from authorized capital in mid-August, TubeSolar raised gross proceeds of EUR 4.68 million, which will be used to finance further growth and to invest in the development of highly automated production of modules. The placement price was EUR 5.20 per share.
At a reduced share price level of currently EUR 4.28, this gives investors the opportunity to invest at a price around 20% lower than the price of the capital increase. In addition to the innovative and promising technology, the Augsburg-based company has another asset in its portfolio. With a share of 15.6%, they have a strategic stake in the US company Ascent Solar Technologies Inc., which manufactures a special technology for PV thin-film foils. TubeSolar's share in the Company alone is USD 30.36 million.
The CFO of TubeSolar, Felix Mantke, will present the company on the occasion of the 4th IIF-International Investment Forum on 27.09.2022. The participation in the virtual event is free of charge.
Nel ASA - Analysts disappointed
In the transportation sector, specifically in light and heavy-duty vehicles, hydrogen is considered a key element in achieving climate goals. Hydrogen specialist Nel ASA, whose history dates back to 1927, is regarded as one of the leading companies in solutions for producing, storing and distributing hydrogen from renewable energy sources. The Norwegian company's solutions cover the entire value chain, from hydrogen production to hydrogen refueling stations, enabling the industry to transition to green hydrogen.
The second quarter figures disappointed both shareholders and analysts. Although second-quarter sales increased 12% from NOK 163.7 million to NOK 183 million, NOK 244 million was expected. The bottom line is a loss of NOK 0.18 per share, which is also about 25% below analysts' forecasts. Following the quarterly figures, US investment bank Bank of America resumed coverage with an "underperform" rating and a price target of NOK 11. Also skeptical is major Swiss bank Credit Suisse, which downgraded Nel ASA from "Neutral" to "Underperform" and lowered the price target from NOK 15 to NOK 10. The share's last price was NOK 14.41.
Despite policy support, both JinkoSolar and Nel ASA disappointed with their latest published quarterly figures and were punished by analysts. In contrast, TubeSolar's technology promises to be innovative. The stock could face a revaluation if it successfully enters the mass market.
Conflict of interest
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