The Bull Case for Solar in India
August 20, 201550 Solar Cities in India on ground or paper
August 24, 2015Trina, Jinko, JA and Canadian Solars’ Q2 2015 Performance
The global solar markets are soaring high with rising demand led by China, US and India in the second quarter of 2015. Pursuant to the high demand, the industry has become more dynamic with expansion in capacity, upward guidance revision and new facilities coming up in all parts of the globe. The Chinese stock market is witnessing some weakness currently, which has raised concerns amongst the investor class. Many of the Chinese solar stocks are listed in the USA have also witnessed heavy short selling, subsequent to the rising concerns about the stability of the Chinese markets. However in this article I will take you through the Q2’15 performance of some of my favorite Chinese solar stocks, showing that their performance was nothing short of expectations and the investors can be confident about these stocks.
| Revenue ($ million) | Shipments (MW) | Gross Margin (%) | Net Income ($ million) | |
| Trina Solar (TSL) | 722.9 | 1231 | 20 | 43.1 |
| Jinko Solar (JKS) | 516.2 | 913.4 | 20.7 | 12.3 |
| Canadian Solar (CSIQ) | 636.7 | 850 | 15.2 | 17.9 |
| JA Solar (JASO) | 436.8 | 790.8 | 16.4 | 21.9 |
Data from Respective Company’s IR
Given above is the Q2 2015 performance of some of the Chinese solar companies, showing healthy gross margins and net income. Not only that there has been an upward revision in their shipment guidance as well. Jinko Solar increased its module shipment guidance to 4-4.5 GW for 2015, up from previous guidance of 3.3GW to 3.8GW. Canadian Solar’s full-year guidance stands at 4-4.3GW, while for JA Solar it is 3.6-4 GW. Trina Solar will further consolidate its No.1 ranking in 2014, with full year shipment guidance at 4.9-5.1 GW. By the end of 2015, Trina expects to have solar cell capacity of ~3.5 GW and module capacity of ~4.8 GW. Trina Solar and JA Solar also have big expansion plans in India, which expects to achieve a target of 100 GW of solar installation by 2022.
Though the stocks have been battered following the general downfall in the energy stocks and the Chinese market slowdown, I think the investors should use this opportunity to build bigger positions in these stocks. Trina Solar’s stock performance has been the best amongst the lot since 2015. Given the large capacities, good performance, leading position as solar suppliers and good project pipeline and geographic diversification, I think these stocks deserves to be in one’s portfolio.