Jinko Energy Launches IPO in Germany to Attract Foreign Investment

On October 20th, Jinko Energy, the world's largest integrated photovoltaic enterprise, announced its intention to list on the Frankfurt Stock Exchange in Germany through the issuance of Global Depositary Receipts (GDRs). If approved, Jinko Energy will become the first STAR Market company to enter the German capital market via GDRs, potentially propelling Sino-European cooperation in sustainable finance and carbon neutrality to new heights.

Recently, another leading A-share company, Sungrow Power Supply, which specializes in inverters and energy storage, also declared its plan to list in Germany through GDR issuance. The collective announcements by the two leading companies on the Shanghai and Shenzhen stock exchanges signify that the consensus reached during the third China-Germany High-Level Financial Dialogue in October last year, regarding "increasing efforts to support more companies in issuing GDRs and continuously improving the interconnectivity level of Chinese and German capital markets," is being rapidly implemented.

The announcement indicates that the price of Jinko Energy's GDR issuance will not be lower than 90% of the average closing price of A-shares in the 20 trading days before the pricing benchmark date, with the total funds raised not exceeding 4.5 billion RMB or its equivalent in foreign currency. The funds will primarily be used for the 1GW high-efficiency module project in the United States and the second phase of the 14GW integrated production base construction project in Shanxi. Jinko Energy stated that this GDR issuance will help the company consolidate its leading position in N-type technology and enhance profitability, flexibly address international trade barriers, and optimize capital structure to strengthen risk resistance.

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Globalization upgrade, differentiated breakthrough

Photovoltaics are one of China's "new three" export cards, and Jinko Energy is one of the samples of photovoltaic companies going global. Jinko Energy's semi-annual report for 2024 shows that the company's overseas sales account for 65%, and overseas revenue accounts for more than 70%, ranking at the forefront among leading photovoltaic enterprises. In addition to the high proportion of overseas sales, the company also has the industry's largest overseas integrated production capacity and thousands of overseas employees, achieving international alignment in various fields such as R&D, branding, and ESG.

This pursuit of overseas listing reflects the upgrade of Jinko Energy's global capabilities.

The implementation of this fundraising project will help to further enhance Jinko Energy's localized manufacturing capabilities in key global markets, achieving local manufacturing, local consumption, and local supply. After the completion of the 1GW high-efficiency module fundraising project in the United States, Jinko Energy's total module production capacity in the U.S. will reach 3GW. In the context of strong clean energy installation demand driven by the artificial intelligence wave, the company will be able to consolidate stable shipments in high-priced markets and more calmly deal with the uncertainty of trade policies, thereby achieving better profit levels.

The 14GW integrated fundraising project in Shanxi's second phase was officially announced in May last year. The project concentrates crystal pulling, slicing, battery, and module production in the same base, which can effectively reduce labor and logistics costs. At the same time, through the in-depth application of digital and intelligent technologies, it can achieve efficient traceability of production carbon footprints and supply chains, better meeting the diversified needs of overseas customers in green manufacturing and supply chain compliance.

Germany, the listing location of this IPO, is the largest single photovoltaic market in Europe. In April 2024, Jinko Energy delivered over 1.1 million new N-type modules to one of Germany's largest photovoltaic power stations - The Witznitz Solar Park. The Frankfurt Stock Exchange is the second-largest stock exchange in Europe. If the listing goes smoothly, it will further enhance Jinko Energy's visibility in the German and European markets, aiding the company's overseas business and financing channels in their positive development.

Attracting more international long-term investors.After approximately two years of deep adjustments, the valuation levels of the photovoltaic (PV) industry have approached historical lows. Goldman Sachs noted in a recent report that the current downturn in the PV industry is nearing its end and may reach a cyclical bottom by 2025, with sustainable demand driving a recovery in capacity utilization from 2025 onwards.

On October 14th, the China Photovoltaic Industry Association organized an industry "anti-internal competition" symposium in Shanghai. Participating entrepreneurs engaged in in-depth discussions and reached a consensus on "strengthening industry self-discipline, preventing cutthroat competition, reinforcing market selection, and smoothing the exit channels for outdated capacities." This has brought a glimmer of hope for the industry to clear out and return to a growth trajectory sooner.

In the long term, under the global consensus on developing green energy and a low-carbon economy, photovoltaic power generation, as the cleanest, most economical, and smartest form of energy, still has significant room for penetration. BloombergNEF predicts that global new photovoltaic installations will reach 592GW in 2024, and the general view is that this figure will exceed 1000GW around 2030.

In the process of industry recovery, leading companies with technological, market, and scale advantages are often favored by international long-term capital. Jinko Energy and Sungrow Power, as leading companies in the photovoltaic module and inverter segments, are among the first batch of companies planning to go public in Germany after the acceleration and expansion of GDR issuance in 2022. They are also among the first batch of companies to carry out overseas financing after the new GDR rules in 2023. The two companies announced their overseas financing plans in the same week that the photovoltaic industry reached a consensus on "anti-internal competition," seemingly heralding the start of a new cycle of high-quality development in the photovoltaic industry.

If Jinko Energy can successfully list on the Frankfurt Stock Exchange, it will become the first photovoltaic company listed in China, the United States, and Europe. The company's international capital operation capabilities will be further enhanced. Market analysis suggests that by introducing international long-term investors during the industry's low point, Jinko Energy will strengthen its capital reserves, optimize its debt ratio and financing costs, and enhance its sustainable development and risk resistance capabilities. As a global market share leader, its long-term investment value will also be fully demonstrated.