On October 20, JinkoSolar (688223. SH) announced that it plans to list on the Frankfurt Stock Exchange in Germany through the issuance of Global Depositary Receipts (GDRs). If approved, JinkoSolar will become the first company to list on the Germany capital market through the GDR, which is expected to promote bilateral cooperation in sustainable finance and carbon neutrality to a new height.

Recently, Sungrow (300274.SZ), another A-share inverter and energy storage leader, also announced its plan to go public in Germany through the issuance of GDR. The collective official announcement of the two leading companies of the Shanghai Stock Exchange and the Shenzhen Stock Exchange marks the acceleration of the implementation of a series of consensuses reached by the two sides on "increasing efforts to support more enterprises to issue GDRs and continuously improving the level of interconnection between the Chinese and German capital markets" in the third Sino-German high-level financial dialogue in October last year.

According to the announcement, JinkoSolar's GDR issuance price will not be less 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 equivalent in foreign currency, which will be mainly used for the 1GW high-efficiency module project in United States and the 14GW integrated production base construction project in Shanxi Phase II. JinkoSolar said that the GDR issuance will help the company consolidate its leading position in the N-type and improve profitability, flexibly respond to international trade barriers, and optimize its capital structure and enhance its ability to resist risks.

Globalization upgrading, differentiation breakthrough

PV is one of the "new three" business cards of China's exports, and JinkoSolar is one of the samples of PV companies going overseas. According to JinkoSolar's 2024 semi-annual report, the company's overseas sales accounted for 65% and overseas revenue accounted for more than 70%, ranking first among the top photovoltaic companies. In addition to the relatively high proportion of overseas sales, the company also has the industry's largest overseas integrated production capacity and thousands of overseas employees, and has also achieved international integration in various fields such as R&D, branding, and ESG.

The overseas listing is a reflection of JinkoSolar's upgrading of its global capabilities.

The implementation of this fundraising project will help further enhance JinkoSolar's local manufacturing capabilities in key global markets, enabling local manufacturing, local consumption and local supply. After the completion of the 1GW high-efficiency module fundraising project in United States, JinkoSolar's total module production capacity in the United States will reach 3GW. Amid the strong demand for clean energy installations spawned by the wave of artificial intelligence, companies will be able to consolidate stable shipments in high-priced markets, while at the same time more calmly navigating the uncertainty of trade policies, so as to achieve better profit levels.

The second phase of the 14GW integrated fundraising project in Shanxi was officially announced in May last year. The project will concentrate crystal pulling, slicing, cell, and module in the same base, which can effectively reduce the cost of manpower and logistics. At the same time, through the in-depth application of digital and intelligent technology, the production carbon footprint and supply chain can be efficiently traced, and the diversified needs of overseas customers in green manufacturing and supply chain compliance can be better met.

Germany, where it was listed, is the largest single PV market in Europe. In April 2024, JinkoSolar delivered more than 1.1 million new N-type modules to The Witznitz Solar Park, one of Germany's largest PV plants. The Frankfurt Stock Exchange is the second largest stock exchange in Europe. If the listing is successful, it will further enhance JinkoSolar's popularity in the Germany and European markets, and help the company's overseas business and financing channels to develop soundly.

Attract more international long-term investors

After about two years of in-depth adjustment, the valuation level of the photovoltaic industry has approached a historical low. Goldman Sachs has pointed out in a recent report that the current downward cycle of the PV industry is coming to an end, and it is likely to usher in a cyclical bottom in 2025, and demand sustainability will drive capacity utilization to recover in 2025 and beyond.

On October 14, the China Photovoltaic Industry Association organized an industry "anti-involution" symposium in Shanghai, and the participating entrepreneurs had in-depth exchanges and reached a consensus on "strengthening industry self-discipline, preventing vicious competition, strengthening the survival of the fittest in the market, and smoothing the exit channels of backward production capacity", which brought the dawn for the industry to return to the growth track as soon as possible.

In the long run, under the global consensus on the development of green energy and low-carbon economy, the penetration rate of photovoltaic power generation, as the cleanest, most economical and smartest form of energy, still has huge room for improvement. According to Bloomberg New Energy, the global installed PV capacity will reach 592GW in 2024, and the consensus view is that this number will exceed 1,000GW around 2030.

In the process of industry recovery, leading enterprises with advantages in technology, market and scale are often favored by international long-term capital. JinkoSolar and Sungrow, as leading enterprises in the photovoltaic module and inverter sector, are the first batch of companies to plan to go public in Germany after the acceleration and expansion of GDR issuance in 2022, and the first batch of enterprises to carry out overseas financing after the new GDR regulations in 2023. The announcement of overseas financing plans by the two companies in the same week that PV companies reached a consensus on the industry's "anti-involution" also seems to herald the beginning of a new cycle of high-quality development of the PV industry.

If successfully listed on the Frankfurt Stock Exchange, JinkoSolar will become the first PV company to be listed in China, the United States and Europe, further enhancing its international capital operation capabilities. According to market analysis, by introducing international long-term investors during the trough period of the industry, JinkoSolar will strengthen its capital reserves, optimize debt ratio and financing costs, and enhance its sustainable development and anti-risk capabilities, so that the long-term investment value of JinkoSolar will also be fully demonstrated as a leader in global market share.