Financial Analysis: Jinko Solar (JKS) versus Hanwha Q Cells (HQCL)

Jinko Solar (NYSE: JKS) and Hanwha Q Cells (NASDAQ:HQCL) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.

Earnings & Valuation

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This table compares Jinko Solar and Hanwha Q Cells’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Jinko Solar $4.07 billion 0.17 $263.10 million $0.64 28.84
Hanwha Q Cells $2.43 billion 0.27 $127.50 million $0.18 43.50

Jinko Solar has higher revenue and earnings than Hanwha Q Cells. Jinko Solar is trading at a lower price-to-earnings ratio than Hanwha Q Cells, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Jinko Solar and Hanwha Q Cells’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Jinko Solar 0.53% 2.15% 0.50%
Hanwha Q Cells 0.75% 3.43% 0.69%

Institutional and Insider Ownership

15.4% of Jinko Solar shares are held by institutional investors. Comparatively, 0.6% of Hanwha Q Cells shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Jinko Solar has a beta of 1.76, suggesting that its share price is 76% more volatile than the S&P 500. Comparatively, Hanwha Q Cells has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Jinko Solar and Hanwha Q Cells, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Jinko Solar 6 2 0 0 1.25
Hanwha Q Cells 1 1 0 0 1.50

Jinko Solar presently has a consensus price target of $17.50, suggesting a potential downside of 5.20%. Hanwha Q Cells has a consensus price target of $8.00, suggesting a potential upside of 2.17%. Given Hanwha Q Cells’ stronger consensus rating and higher possible upside, analysts plainly believe Hanwha Q Cells is more favorable than Jinko Solar.

Summary

Hanwha Q Cells beats Jinko Solar on 7 of the 12 factors compared between the two stocks.

About Jinko Solar

JinkoSolar Holding Co., Ltd., together with its subsidiaries, engages in the design, development, production, and marketing of photovoltaic products in the People's Republic of China and internationally. It offers solar modules, solar cells, silicon ingots, silicon wafers, and recovered silicon materials. The company sells its products to distributors, project developers, and system integrators under the JinkoSolar brand, as well as on an original equipment manufacturer basis. JinkoSolar Holding Co., Ltd. was founded in 2006 and is based in Shangrao, the People's Republic of China.

About Hanwha Q Cells

Hanwha Q CELLS Co., Ltd., formerly Hanwha SolarOne Co., Ltd., is a global solar energy company engaged in the manufacturing of solar modules, and the development and management of downstream solar farms. It manufactures a range of photo voltaic (PV) cells and PV modules at its manufacturing facilities in China and Malaysia using manufacturing process technologies, including those developed at its research and development facilities in Germany. It also engages in PV downstream businesses, which include developing solar power projects and providing engineering, procurement and construction services, and operation and management services. It develops and builds solar power projects incorporating its PV modules to sells them to third-party purchasers upon completion. Its principal products include PV modules, PV cells, silicon ingots and silicon wafers. It sells a range of PV modules, ranging from 250 watts to 340 watts in power output specification.

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