On October 20th, Jinko Solar (688223. SH), a leading global provider of photovoltaic energy solutions, announced plans to list on the Frankfurt Stock Exchange in Germany by issuing Global Depositary Receipts (GDRs). If approved, JinkoSolar will become the first Chinese new energy photovoltaic company to be listed on the A-share market, the United States, and Germany, and also the first Sci Tech Innovation Board company to be listed on the German capital market through GDR.
JinkoSolar stated that this issuance is aimed at leading the advanced production capacity of N-type components, consolidating the leading position of N-type, while implementing the global development strategy and accelerating the layout of overseas production capacity construction. According to InfoLink's prediction, the market share of N-type TOPCon battery technology will reach 65% by 2024, while the market share of P-type battery technology will decrease to around 23%.
The total fundraising amount shall not exceed 4.5 billion yuan, with 72% used to consolidate the leading position of N-type products
Jingke Energy detailed the specific situation of this GDR issuance in the announcement released on the evening of October 20th.
According to the proposal approved by the company's board of directors, JinkoSolar plans to use the newly issued A-shares as the underlying securities, issue GDRs, and list them on the Frankfurt Stock Exchange. This issuance is expected to complete the registration of the newly added A-shares as the underlying securities by April 2025. It is reported that the newly issued GDR represents no more than 10% of the total share capital of the company before the issuance, and if calculated based on the total share capital of the company as of September 30, it will not exceed approximately 1.001 billion shares.
In fact, in early October, JinkoSolar first revealed its intention to list on the Frankfurt Stock Exchange in Germany through GDR in an announcement. The company stated that this move aims to broaden financing channels, enhance internationalization level, and provide financial support for the company's future strategic development.
In recent years, policies such as parity in the photovoltaic industry have put forward higher requirements for continuous cost reduction and efficiency improvement. Currently, the next generation of battery and module technologies mainly focus on technologies represented by N-type TOPCon and HJT. With the advancement of technology, the cost of N-type TOPCon battery modules has reached the same level as PERC battery modules, and N-type battery modules have higher electrical performance and lower attenuation rate, with obvious comparative advantages.
In this context, JinkoSolar has recently released multiple related announcements, further clarifying the details and objectives of this GDR issuance.
According to the announcement, the issuance price of JinkoSolar's GDR this time will not be lower than 90% of the average closing price of A-shares in the 20 trading days before the pricing benchmark date, and the total amount of funds raised will not exceed RMB 4.5 billion or its equivalent in foreign currency. This funding will mainly be used for the 1GW high-efficiency component project in the United States and the construction of the Shanxi Phase II 14GW integrated production base project, accounting for approximately 72% of the total raised funds. JinkoSolar stated that these two projects will help the company consolidate its leading position in N-type products, enhance profitability, and flexibly respond to international trade barriers. The remaining raised funds will be used to supplement its working capital or repay bank loans.
As a leader in the global photovoltaic industry, JinkoSolar's globalization strategy has always been highly regarded. At present, JinkoSolar has the largest overseas integrated production capacity in the industry. According to the 2024 semi annual report, JinkoSolar's module shipments amounted to 43.8GW, consistently ranking first in the world. The module products accounted for 65% of overseas market sales and over 70% of overseas revenue, leading the way among top photovoltaic companies. The relevant person in charge of Jingke Energy stated that the company has achieved a high premium market leading share overseas through its global market capabilities. In the future, it will ensure a leading share and price level through more global localized manufacturing and investment layouts.
However, the photovoltaic industry is a heavy asset and capital intensive industry, characterized by fast technological iteration and strong market demand, which requires companies in the industry to maintain high-intensity capital investment. Against the backdrop of the rapid development of the photovoltaic industry as a whole, if JinkoSolar's business scale continues to maintain such a rapid growth trend, it is urgent to enhance its financial strength and alleviate financial pressure through this issuance.
After the completion of the 1GW high-efficiency component fundraising project in the United States, JinkoSolar's total component production capacity in the United States will reach 3GW. This will enable the company to consolidate stable shipments in the high priced market amidst the strong demand for clean energy installations generated by the wave of artificial intelligence, while more confidently dealing with trade policy uncertainties. As for the Shanxi Phase II 14GW integrated fundraising project, it is an important layout of Jinko Solar in China. The project will concentrate the pulling of crystals, slicing, batteries, and components in the same base, effectively reducing labor, logistics, and other costs.
After this GDR issuance, it will not only help JinkoSolar consolidate and expand its market share, but also further optimize the company's capital structure and enhance its risk resistance capabilities. The relevant person in charge of Jingke Energy stated that by introducing international long-term investors during the industry downturn, the company will strengthen its capital reserves, optimize its debt ratio and financing costs, and enhance its sustainable development capabilities.
Photovoltaic industry hits bottom and rebounds, expected to lead the transformation of the global power industry
Choosing Germany as the listing location is undoubtedly an important supplement to JinkoSolar's globalization strategy.
As the largest single photovoltaic market in Europe, Germany's demand for photovoltaic products continues to grow. The German government has set a target of installing 215GW of photovoltaic systems by 2030, which requires an annual increase of 22GW of photovoltaic systems. To achieve the goal, the lower house of the German parliament has passed a legislative amendment allowing apartment owners and tenants to install solar power systems on their balconies, which cannot be prevented by landlords or homeowner associations without justifiable reasons. At the same time, the German Sales Tax Law stipulates that from January 1, 2023, value-added tax and income tax on the purchase and installation of household photovoltaic systems below 30kW will be exempted.
Taking advantage of this opportunity, JinkoSolar has successfully delivered over 1.1 million new N-type modules to One of the largest photovoltaic power plants in Germany, The Witznitz Solar Park. As the second largest stock exchange in Europe, the Frankfurt Stock Exchange will provide JinkoSolar with a broader international financing platform, helping the healthy development of the company's overseas business and financing channels.
It is worth mentioning that JinkoSolar and another A-share inverter and energy storage leader, Sunac Power (300274. SZ), almost simultaneously announced plans to go public in Germany by issuing GDRs. The collective official announcement of the two leading enterprises, the Shanghai Stock Exchange and the Shenzhen Stock Exchange, marks the acceleration of the implementation of the consensus reached in the high-level financial dialogue between China and Germany in October last year on improving the connectivity of the Chinese and German capital markets.
Against the backdrop of the current valuation level of the photovoltaic industry approaching historical lows, Jinko Solar and Sunac Power have chosen to issue GDRs at this time, which is a positive outlook for the future development prospects of the industry. Recently, Goldman Sachs analysis pointed out that the current downward cycle of the photovoltaic industry is gradually coming to an end and is expected to reach a cyclical bottom in 2025. The sustainability of demand will drive the recovery of capacity utilization in 2025 and beyond.
On October 14th, the China Photovoltaic Industry Association organized an industry "anti involution" symposium in Shanghai. The attending entrepreneurs had in-depth exchanges and reached consensus on "strengthening industry self-discipline, preventing vicious competition, enhancing market survival of the fittest, and smoothing the exit channels of backward production capacity", which also brought a glimmer of hope for the industry to clear up and return to the growth track as soon as possible.
In addition, with the strengthening of global consensus on green energy and low-carbon economy, it has driven the expansion of demand for photovoltaic installed capacity. As a leading enterprise in the photovoltaic industry, JinkoSolar's long-term investment value will also be demonstrated.
According to Bloomberg New Energy's forecast, the global new installed photovoltaic capacity will reach 592GW by 2024, while the general view is that this number will exceed 1000GW around 2030. The International Renewable Energy Agency (IRENA) predicts that the installed capacity of solar photovoltaic power generation will reach 8519GW by 2050, and solar photovoltaic power generation will account for 25% of the global total electricity demand, more than 10 times the total amount of solar photovoltaic power generation in 2017. Solar photovoltaic will lead the transformation of the global power industry.