Comparing DAQO New Energy Corp. (NYSE:DQ) and JinkoSolar Holding Company Limited (JKS)

DAQO New Energy Corp. (NYSE: DQ) and JinkoSolar Holding Company Limited (NYSE:JKS) are both small-cap basic materials companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, risk, dividends and profitability.

Insider and Institutional Ownership

31.7% of DAQO New Energy Corp. shares are held by institutional investors. Comparatively, 23.7% of JinkoSolar Holding Company Limited shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares DAQO New Energy Corp. and JinkoSolar Holding Company Limited’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DAQO New Energy Corp. $260.21 million 1.02 $116.94 million $4.72 5.37
JinkoSolar Holding Company Limited $3.26 billion 0.26 $272.54 million $7.12 3.70

JinkoSolar Holding Company Limited has higher revenue and earnings than DAQO New Energy Corp.. JinkoSolar Holding Company Limited is trading at a lower price-to-earnings ratio than DAQO New Energy Corp., indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

DAQO New Energy Corp. has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500. Comparatively, JinkoSolar Holding Company Limited has a beta of 2.04, indicating that its stock price is 104% more volatile than the S&P 500.

Profitability

This table compares DAQO New Energy Corp. and JinkoSolar Holding Company Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DAQO New Energy Corp. 19.35% 18.90% 8.18%
JinkoSolar Holding Company Limited 6.92% 12.53% 2.46%

Analyst Ratings

This is a breakdown of current ratings for DAQO New Energy Corp. and JinkoSolar Holding Company Limited, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DAQO New Energy Corp. 0 0 2 0 3.00
JinkoSolar Holding Company Limited 2 1 3 0 2.17

DAQO New Energy Corp. presently has a consensus price target of $37.50, indicating a potential upside of 48.05%. JinkoSolar Holding Company Limited has a consensus price target of $21.00, indicating a potential downside of 20.24%. Given DAQO New Energy Corp.’s stronger consensus rating and higher probable upside, equities research analysts clearly believe DAQO New Energy Corp. is more favorable than JinkoSolar Holding Company Limited.

Summary

DAQO New Energy Corp. beats JinkoSolar Holding Company Limited on 8 of the 13 factors compared between the two stocks.

DAQO New Energy Corp. Company Profile

Daqo New Energy Corp. is a polysilicon manufacturer. The Company utilizes the chemical vapor deposition process, or the modified Siemens process, to produce polysilicon. The Company’s segments include Polysilicon and Wafer. The Company manufactures and sells polysilicon to photovoltaic product manufacturers, whereby the polysilicon is processed into ingots, wafers, cells and modules for solar power solutions. The Company offers ready-to-use polysilicon, packaged to meet crucible stacking, pulling and solidification needs. The Company offers wafers through its downstream photovoltaic product manufacturing business. The Company also provides wafer original equipment manufacturer (OEM) service to external customers through tolling agreements by processing polysilicon to produce ingot and wafer. Its annual capacity for polysilicon is approximately 12,150 metric tons (MT) in Xinjiang. The Company’s wafer manufacturing annual capacity is approximately 90 million pieces.

JinkoSolar Holding Company Limited Company Profile

JinkoSolar Holding Co., Ltd. operates in the photovoltaic (PV) industry. The Company has built a vertically integrated solar power product value chain, from recovering silicon materials to manufacturing solar modules and solar power generation. The Company’s segments include the manufacturing segment and the solar power projects segment. The manufacturing segment comprises its vertically integrated solar power product manufacturing business, under which the Company manufactures silicon ingots, wafers, cells and solar modules. The solar power projects segment comprises the downstream solar power generation, construction and operation business, including power generation; engineering, procurement and construction (EPC), and connecting solar power projects to the grid, and operation and maintenance (O&M) of the solar power projects. The Company sells its solar modules under the JinkoSolar brand. Its services include solar system EPC and processing services.

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