Key insights
- Daiwa upgraded JinkoSolar (JKS) to Buy, setting a $28.50 price target based on potential patent revenue from Tesla's planned US solar panel production. The analyst estimates significant annual net profit for JKS-A, a JinkoSolar subsidiary, from 2030-2035. While positive for JKS, the broader US equity market impact is limited, primarily affecting the solar energy sector. Downside risk exists if Tesla's production falls short of expectations.
Investing.com - Daiwa Securities upgraded JinkoSolar Holding Co. (NYSE:JKS) to Buy from Sell on Monday with a price target of $28.50, citing expected patent revenue from Tesla’s planned solar panel capacity in the United States. The stock currently trades at $23.91, giving the company a market capitalization of $1.24 billion.
The upgrade reflects anticipated patent fees that Tesla may pay to JinkoSolar’s 55.6%-owned subsidiary JKS-A for 100 gigawatts of TOPCon photovoltaic capacity planned in the U.S. over the next three years. JKS-A holds multiple patents in TOPCon cell technology and trades on the Shanghai Stock Exchange.
Daiwa estimates a patent fee of CNY0.06 per watt for 2027-2030, based on U.S. photovoltaic module prices being three times higher than in China. The firm forecasts JKS-A will generate an average net profit of CNY3 billion annually from 2030-2035 from Tesla’s capacity, assuming full production ramp-up.
The research firm values JinkoSolar’s patent business at $0.7 billion in 2026, applying a 2x price-to-earnings ratio for 2030 and a 5% weighted average cost of capital. Daiwa applies a 0.35x price-to-book ratio to the company’s non-patent business, referencing valuations of major Chinese photovoltaic companies listed in the U.S. The company currently trades at a 0.5 price-to-book multiple. An InvestingPro tip notes JKS is trading at a low Price/Book multiple, one of 8 additional tips available to subscribers, along with comprehensive Pro Research Reports covering 1,400+ US equities.
Daiwa’s sum-of-the-parts methodology supports the $28.50 price target. The firm notes downside risk if Tesla produces less than 100 gigawatts of photovoltaic panels by 2030.
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