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JinkoSolar (JKS) Gets 188 MW Projects at Mexico Auction

Leading supplier of solar products, JinkoSolar Holding Co., Ltd. JKS has won three projects totaling 188 megawatts alternative current (MWac) in Mexico’s first long-term electricity auction since the country’s implementation of energy reforms.

Details of the Project

JinkoSolar will be responsible for developing and constructing the PV plants. Out of the three projects, two will be built in Yucatan, while the remaining one will be located in Jalisco. All the three facilities are expected to come online by mid 2018.

The company will sell electricity produced by the three plants to Mexico's Federal Electricity Commission ("CFE") under a 15-year power purchase agreement (PPA). Together, the plants will generate electricity in excess of 500 gigawatts/hour (GWh) each year. This translates to a reduction of 200,000 tons in CO2 emissions every year.

Going Forward

Alternative sources of energy, particularly solar, have increasingly been gaining popularity, mainly due to their environment-friendly nature. This enables JinkoSolar to clinch lucrative deals and this trend is likely to continue through 2016 and well beyond.

Last quarter, JinkoSolar witnessed a record high of margin shipment in revenue. Backed by a robust performance, the company estimates total solar market shipment in the range of 1.3–1.4 GW in the first quarter of 2016, while for the full year, the figure is expected to be 6–6.5 GW. Moreover, through 2016, the company expects to bring online solar power projects of a total capacity of 600–800 MW.

In the U.S., JinkoSolar had received several high-value contracts in 2015 that offer competitive Average Selling Prices (ASPs). Scheduled completion of these projects will enable the company to expand its market share and generate higher profits. Moreover, strong global demand of solar energy has gone a long way in bolstering ASPs.

The latest projects mark JinkoSolar’s foray into the Mexican market and are in sync with its strategy of expanding its international presence. Going forward, the company hopes to clinch similar projects in other emerging solar markets.

Zacks Rank & Key Picks

JinkoSolar currently sports a Zacks Rank #1 (Strong Buy). Other favorably placed stocks in the same space include ReneSola Ltd. SOL, SunPower Corporation SPWR and Vivint Solar, Inc. VSLR, all sporting the same Zacks Rank as JinkoSolar.

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RENESOLA LT-ADR (SOL): Free Stock Analysis Report
 
JINKOSOLAR HLDG (JKS): Free Stock Analysis Report
 
VIVINT SOLAR (VSLR): Free Stock Analysis Report
 
SUNPOWER CORP-A (SPWR): Free Stock Analysis Report
 
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