Chinese companies are at the center of the green revolution because the technology needed for the transition toward a sustainable energy-based world is mostly produced in China. Many Chinese companies have emerged in this space over the past few years with much promise and have attracted significant investor attention. But some of these companies have so far failed to achieve the performance level investors expected of them…
These companies are lagging in terms of revenues and EPS. Some are also burning through cash at a staggering rate. Moreover, their efforts to raise further capital are leading to a dilution of shareholder value. These factors are causing investor disappointment. This is evidenced by the price decline of some of the Chinese clean energy stocks over the past month.
JinkoSolar Holding Company (JKS – Get Rating), Niu Technologies (NIU – Get Rating), CBAK Energy Technology, Inc. (CBAT – Get Rating) are three companies that are running with almost no profits even after years of operation. These companies are working on turning things around but that may not happen anytime soon. Despite the existing euphoria around clean energy, we think investors should stay away from these stocks in the near term.
JinkoSolar Holding Company (JKS – Get Rating)
JKS is involved in the production and marketing of photovoltaic cells and related products. The company has operations in China and internationally. JKS’s stock has lost 27.7% since hitting its high in October.
Recently, the company announced that it will be offering $100 million in American depositary shares. The move is likely to considerably dilute the ownership interest of existing shareholders and the announcement led to a sell-off of the stock.
For the third quarter, the company’s gross margin was 17%, which was a decline from 18.5% for the same period last year. The company’s cash and short-term restricted cash declined 2.7% sequentially.
The company’s EPS is expected to decrease 71.4% for the quarter ended December 31, 2020 and 4% in 2020.
JKS’s poor prospects are also apparent in its POWR Ratings which assigned it a “Neutral” rating. It also has a “D” for Trade Grade and Peer Grade. It is ranked #9 of 19 stocks in the Solar industry.
Niu Technologies (NIU – Get Rating)
NIU is involved in the development, manufacture, and marketing of lithium-ion battery powered e-scooters, which it markets.
NIU’s stock has declined 14.5% since hitting its high of $35.9 on November 19. NIU’s stock price fell after…
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