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JinkoSolar's (JKS) Arm Inks 2GW Deal With Aldo Solar in Brazil

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JinkoSolar Holding Co. Ltd.’s JKS subsidiary,Jinko Solar Co. Ltd,recently signed a distribution generation (DG) agreement with Aldo Solar, the largest distributor in Brazil’s solar photovoltaic (PV) market. The agreement not only strengthens JinkoSolar’s partnership with Aldo Solar but also enables it to capitalize on the growing solar market of Brazil.

Details of the Agreement

Per the agreement, JinkoSolar will provide nearly 4 million photovoltaic modules in 2022, which is equivalent to 2 gigawatt (GW) of installed power. The deal provides a platform for JinkoSolar to further commercialize its Tiger Pro family of panels in the Brazil market.

Benefits of the Agreement

Apart from its well-established market in China, JinkoSolar has been consistently gaining from its deployment of solar modules spread across more than 10 countries. The aforementioned DG agreement, which is one of the largest ever signed by Jinko Solar Co. Ltd outside China, solidifies its presence in Brazil.

Moreover, the market share of 31% of Aldo Solar in the Brazilian solar market will aid JinkoSolar in capitalizing on the rapidly growing solar market of the country. It is worth mentioning here that JinkoSolar anticipates doubling its business volume primarily in the distributed generation operation in 2022. The latest agreement will surely take JinkoSolar a step closer to achieving this target. This, in turn,is likely to boost its overall top-line performance in the days ahead.

Additionally, Brazil solar market prospects are expected to expand manifold. Increased penetration of the solar market in the region coupled with favorable conditions for the same provides ample growth opportunities for solar companies like Jinko Solar. According to a Mordor Intelligence report, the Brazilian Solar market is expected to witness a CAGR of 5.5% during the 2021-2025 period.

JinkoSolar, being one of the largest manufacturers of solar modules, stands to gain a lot from the opportunities present in Brazil.

Peer Moves

Considering the robust growth prospects in the Brazilian solar market, other solar companies have also undertaken initiatives to tap the same.

For instance,in September 2021,Enphase Energy ENPH launched its IQ 7+ microinverters in the solar market of Brazil. Per the company’s expectations, shipping of these microinverters is likely to have commenced in October 2021.

Interestingly, Enphase Energy’s Zacks Consensus Estimate for 2021 earnings has been revised upward by 16.5% to $2.26 per share in the past 60 days. The long-term earnings growth rate for ENPH’s earnings is pegged at 38.50%. Impressively, shares of Enphase Energy have appreciated 64.7% in the last one year.

Canadian Solar CSIQ has raised a $100 million financing facility with Brazilian banks to support its development and construction of solar projects in Brazil. Canadian Solar has already developed and contracted in federal, regional and private PPA auctions worth nearly 3 GWp of solar projects in Brazil.

Canadian Solar’s long-term earnings growth rate is pegged at 12%. The company’s shares have lost 17.6% in the past one year.

In 2019, SolarEdge Technologies SEDG announced its expansion in the Brazil PV market with the introduction of three phase inverters with synergy technology up to 100kW (kilowatt-peak) that fit the 127/220, 220/380 and 277/480 grid types.

SolarEdge’s long-term earnings growth rate is pegged at 17.70%. The stock has gained 8% in the past year.

Price Movement

In a year’s time, shares of JinkoSolar have lost 28.9% compared with the industry’s decline of 13.5%.

Zacks Investment Research
Zacks Investment Research

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Zacks Rank

JinkoSolar currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

JinkoSolar Holding Company Limited (JKS) : Free Stock Analysis Report

Canadian Solar Inc. (CSIQ) : Free Stock Analysis Report

Enphase Energy, Inc. (ENPH) : Free Stock Analysis Report

SolarEdge Technologies, Inc. (SEDG) : Free Stock Analysis Report

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