Jinko Power(SH:601778) HTSC·2024-11-04 03:55Investment Rating - The report maintains an "Overweight" rating for Jinko Technology [1]. Core Views - Jinko Technology's Q3 2024 results met expectations, with a revenue of 1.967 billion RMB (up 12% YoY, up 72% QoQ) and a net profit of 132 million RMB (down 48% YoY, down 29% QoQ) [1][2]. - The company has exceeded its total power generation for the previous year in the first three quarters, benefiting from cash flow improvements due to renewable energy subsidies and project transfers [1][3]. - The report anticipates growth in investment income from 2024 to 2026 as the company implements its power station transfer plans [2]. Summary by Sections Financial Performance - In Q3 2024, Jinko Technology achieved a gross profit of 655 million RMB (up 11.2% YoY) and a gross margin of 33% [2]. - The company reported a significant increase in operating cash flow, turning positive at 590 million RMB for 9M24, with Q3 2024 cash flow up 103% YoY to 1.32 billion RMB [3]. - The company’s inventory decreased by 9% from June to September 2024, while the inventory-to-net asset ratio increased by 8.5 percentage points YoY to 28.6% [2]. Investment Outlook - Jinko Technology's current convertible bond balance is 2.296 billion RMB, with a buyback trigger price of 3.67 RMB, which is 18% higher than the current stock price [4]. - The company has approximately 4.786 billion RMB in cash as of the end of September, indicating sufficient reserves to handle potential bond buyback pressures [4]. Earnings Forecast - The report slightly lowers profit forecasts, projecting net profits of 569 million RMB, 786 million RMB, and 944 million RMB for 2024-2026, with YoY growth rates of 48%, 38%, and 20% respectively [5]. - The target price for Jinko Technology is adjusted to 3.96 RMB, based on a 25-year PE of 18x [5][8].