(CapitalWatch, Sept. 30, New York) Shares in JinkoSolar Holding Co. Ltd. (NYSE: JKS) surged 9% Thursday on news that the company's operating subsidiary has received the green light for an IPO on Shanghai's STAR Market.
According to the announcement, the Shanghai Stock Exchange's Sci-Tech innovation board has decided that Jinko Solar Co. Ltd. has "met the offering, listing and disclosure requirements." Now, JinkoSolar will proceed with the registration process with the China Securities Regulatory Commission.
The IPO follows a similar STAR listing of the operating subsidiary of U.S.-listed Daqo New Energy Corp. (NYSE: DQ). Xinjiang Daqo New Energy (SSE:688303) became publicly traded in July and has enjoyed a strong trading run, now at the level of 69.86 yuan per share and a market capitalization of $20.2 billion.
And it's now wonder JinkoSolar is following its solar rival to a homecoming listing. While Xinjiang Daqo is down from its late-August highs of near 90 yuan per share, Chinese investors value the stock significantly higher than Wall Street. Daqo's and its operating subsidiary's assets are nearly identical, as Bloomberg showed, yet the U.S.-listed firm commands a market value of about $4.2 billion, nearly a fifth of its domestic stock.
Analysts have been critical on JinkoSolar's stock. Most recently, Roth Capital has downgraded JinkoSolar's price target to $51 from $58 per share, with a "neutral" rating. Zacks Investment Research upgraded JKS to "hold" from a "sell" in late August, while Goldman Sachs gave a "sell" with a $27 price target in July. MarketBeat shows a consensus price target of $37.75 per share with a "hold" rating.
JinkoSolar sells solar products and services across China, the United States, Europe, Latin America, and other regions. While major indices were mostly in the red on Thursday, Jinko's homecoming listing has lifted its stock to $45.81 per share, at a recovery from earlier losses this week but still below its level a month ago.