Jinko Solar Plans $600 Million Expansion Fundraising in Germany

In a strategic move to raise capital, Jinko Solar Co., a Shanghai-based company, unveiled plans to generate over $600 million through a Global Depositary Receipt (GDR) sale on Germany's stock exchange. This initiative, announced on Monday, aims to fund expansion projects in China and the U.S. Jinko is set to offer up to 100 million GDRs, which represent a significant portion of its expanded share capital. This move follows the recognition of a stark valuation gap between its shares in the U.S. and those in Shanghai, revealing that Chinese investors attribute higher value to the company compared to American markets. The company's market value in Shanghai remains robust at approximately $12 billion with a P/E ratio of 19, contrasted by a much lower perception in the U.S. Since American investors have not fully recognized Jinko's worth, the firm is leveraging the GDR program as a fundraising mechanism, a program initiated by China to facilitate capital raising efforts abroad for companies listed on domestic exchanges. Strengthening its position further, the company appears to brace for some discount in pricing but anticipates that the GDRs will trade at a premium compared to its U.S. listings due to limited trading activity affecting international valuations. This GDR strategy also lessens the immediate impact on market dynamics, as trading on the German exchange tends to be infrequent. Overall, these developments showcase Jinko's adaptive strategies in a challenging sector, aiming to enhance its liquidity and facilitate future growth while capitalizing on the differences in market evaluations across different regions.