Shares of solar panel manufacturer JinkoSolar Holding (NYSE:JKS) jumped as much as 14.5% on Monday as investor fears about import restrictions appear to be easing. The solar stock closed trading up 10.3% for the day.
Late on Friday, The Washington Post published an article that highlighted how companies like JinkoSolar had seen millions of dollars worth of solar panels being detained by Customs and Border Protection agents. The company has reportedly seen about 100 MW of product that it had made in China detained, according to Philip Shen at Roth Capital Partners, which would be worth around $25 million.
If the product is barred from entry into the U.S., the hit wouldn’t be too big a deal for JinkoSolar given the $1.21 billion in revenue it generated in the first quarter of 2021. And the company has a manufacturing plant in Florida, so this should be one of the beneficiaries of U.S. import restrictions.
What we might be seeing is the market reverse its thinking on solar import restrictions. Instead of a headwind, like it might seem to be for JinkoSolar, it could be a tailwind because of the company’s U.S. presence. And now that it knows import restrictions are for real, it will be able to avoid making the same mistake in the future.
You can see that JinkoSolar’s stock is really just recovering from what it lost in mid-August, so over the last month the stock is still down. That may be the real story as JinkoSolar deals with a highly competitive solar manufacturing market. That includes rising costs for polysilicon raw materials that could hurt margins for the foreseeable future.
I would attribute most of the last month’s moves as volatility in the solar industry as investors try to sort out how big of a deal import restrictions and rising polysilicon prices are for manufacturers. And in solar, volatility is the one thing we can count on being high in the long term.
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