Yea, we were a bit disappointed with the reaction of the share price of Jinko Solar (JKS) to the excellent quarterly result, but perhaps Jonathan is on to something here:
JinkoSolar is having an amazing year. Stock price has remained range-bound. Management may be keeping the share price down until May convertibles are repurchased. Once the convertibles are out of the way, share price can soar.
How Do JinkoSolar Shares Stay So Low? - JinkoSolar Holding Co., Ltd. (NYSE:JKS) | Seeking Alpha
And his case for the valuation gap in today's share price:
On Tuesday, JinkoSolar announced Q4-2015 results that were out of this world.
Quarterly sales grew year over year by a staggering 104.4% to $937.7M.
Non-GAAP net income was $54M, and operating cash flows were a whopping $357M.
Book value rose to $667M, which means the stock is trading at a mere 1.12X book value.
With these great results in mind, we do need to remember that JinkoSolar is developing a downstream business (constructing and operating solar projects) in China which has reached total capacity of more than 1GW.
The downstream business isn't meant to stay on JKS's books. The company is pursuing a spin-off which in my view could yield $1.5B-$2B. So, 55% of that would go to JKS, since 45% of the downstream business is already owned by three private equity funds.
This "not-so-hidden" asset should immediately increase JKS book value by 2x-3x.