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Jinko Solar Issues $47.6 Million In Short-Term Bonds

April 24, 2012

Needing money for working capital, Jinko Solar (JKS :NYSE) issued RMB300 Million ($47.6 million) in one-year, short-term bonds. The bonds have an annual interest rate of 6.3 percent, 4 percent lower than the current benchmark one-year lending rate of 6.56 percent.

Should equity investors be concerned? Probably. Jinko Solar has been burning some capital having opened four new offices over the last four months. While Southern France, Australia, Canada, and Singapore are definitely on the radar of most major solar companies, the need to open three offices so quickly appears a little suspicious despite the company almost doubling its shipments in solar products from 2010 to 2011.

But Q4 2011 wasn’t kind to Jinko Solar as total product shipments were down 11.9 percent from the previous quarter and revenues were down 32.7 percent sequentially.

Opening new offices is never a quick fix, especially in the solar industry where deals can often take years to close. And with the share price down 78.9 percent over the last year, Jinko Solar needs to win more large deals like the 14 megawatts (MW) in the United Kingdom they announced in November 2011.

Surprisingly, shares of Jinko Solar were down only 0.38 percent in afternoon trading.

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