10 Worst Chinese Stocks to Buy Right Now According to Short Sellers

3) JinkoSolar Holding Co., Ltd. (NYSE:JKS)

Short % of Float (8/30/2024): 15.42%

Number of Hedge Fund Holders: 7

JinkoSolar Holding Co., Ltd. (NYSE:JKS) manufactures solar products. It produces silicon wafers, solar cells, and solar modules.

Short sellers believe that the company is exposed to risks related to oversupply and volatile pricing, which can weigh over its revenues moving forward. Also, JinkoSolar Holding Co., Ltd. (NYSE:JKS) delayed or suspended capacity expansion projects, and some manufacturers decided to cut or suspend production. Caixin Global recently reported that China’s National Energy Administration has been taking steps to slow the breakneck expansion of China’s solar industry, primarily by curbing low-end solar production. Also, Bloomberg mentioned that India is focused on self-sufficiency in solar manufacturing. As a result, the country is planning to restrict solar imports from China.

The company released its 2Q 2024 financial results, with gross profit reaching RMB2.68 billion (US$368.3 million), reflecting a fall of 2.1% sequentially and 44.0% YoY. Its gross margin was impacted as a result of the decline in the average selling price of solar modules.

However, Wall Street analysts and industry veterans believe that JinkoSolar Holding Co., Ltd. (NYSE:JKS)’s stock is well-placed to take off, given its expansion plans in the Middle East, mainly in Saudi Arabia. Also, the optimism stems from the fact that it continues to maintain a strong R&D and patent position in the TOPCon IP landscape. There are expectations that N-type TOPCon might dominate with 100% penetration next year. By the 2Q 2024 end, the company’s product secured more than 80% visibility of the 2024 order book and it achieved fresh records in cell efficiency.

Also, in 2H 2024, there can be some stability in its gross margins as average selling prices are expected to stabilize in 3Q 2024. This momentum should continue in 4Q 2024. The company’s globalization strategy continues to pay off, as it became the first solar company to reach accumulative module shipments of 260 GW, covering ~200 countries and regions.

As of 2Q 2024, JinkoSolar Holding Co., Ltd. (NYSE:JKS) was held by 7 hedge funds, with the total stakes amounting to $15.4 million.