What happened
Shares of solar energy stock JinkoSolar Holding Co (JKS 0.18%) jumped as much as 13.3% in trading on Wednesday after the company announced that one of its subsidiaries completed an IPO in Shanghai. Shares fell slightly later in the day but are still up 7.5% at 1:20 p.m. ET.
So what
Jinko Solar Co., or Jiangxi Jinko, completed an IPO on the Shanghai Stock Exchange that issued 2 billion shares at RMB 5.00, or $0.79, for a total of $1.58 billion. But after the first day of trading shares had jumped 111%, causing the increase in JinkoSolar Holding today.
Image source: Getty Images.
This is the latest solar company to spin off manufacturing assets, which have been difficult to make money on long-term. Manufacturing is competitive and requires billions of dollars in investment to build scale, which is why a company like JinkoSolar may want to focus on power plant development at a corporate level.
Now what
The market's reaction to Jiangxi Jinko is what's exciting investors today and could give JinkoSolar flexibility. The company could fully monetize its 58.62% stake in Jiangxi Jinko and return capital to shareholders, which may be appealing given JinkoSolar's current $2.1 billion market cap. No matter the decision, a successful IPO is welcome news for a struggling solar market today.
