Credit Suisse Says Jinko Solar Has 46% Upside

In a report published Wednesday, Credit Suisse analyst Patrick Jobin reiterated an Outperform rating and price target of $45 on JinkoSolar Holding Co., Ltd. (NYSE: JKS). The analyst believes that the company is on strong footing in terms of its downstream business and capacity in Malaysia. Following a meeting with JinkoSolar's management team, the analyst was "incrementally more constructive" regarding improvements in the company's margin outlook, as well as the "solid footing" of the downstream solar project development business. The analyst expects the company to post above peer improvement in margin, driven by the capacity ramp in Malaysia.Module pricing also stabilized in April. "US pricing has declined to 63-65c/W for new contracts slated for late 2015 delivery as non-tariff exposed capacity comes online, forcing the "Big Squeeze" where companies with China-based capacity have to accept subpar <10 percent margins while JKS can obtain 25-30 percent margins," according to the Credit Suisse report.The company's Malaysian factory has already begun ramping and is on track to achieve full production in July. JinkoSolar has a healthy order book for US shipments as well, at 65-67c/W. "Other manufacturers can't ship to the US at these margins unless 2012 trade tariffs are lowered," Jobin stated.