Chinese solar manufacturers have been built on an unsustainable foundation of short-term debt from state-run banks. Companies like Suntech Power , Yingli Green Energy , Trina Solar , and LDK Solar all have more than $1 billion in debt, an unsustainable amount for companies reporting massive losses.
But we may be seeing a peak into whom China will choose to emerge as a long-term winner, and what qualities it's looking for. Jinko Solar just received a $1 billion loan from the China Development Bank to build solar projects in Europe. The company had a 9.9% gross margin last quarter and less than $400 million in debt, both far better than most of the Chinese competition. So could Jinko be one of the few that survive?
Jinko Solar could very well survive and may be moving up the list of Chinese manufacturers but it's still a very risky bet. A profitable company like First Solar should still be a top pick of solar investors. For a deep dive into the stock along with continuing updates and guidance on the company whenever news breaks, we've created a brand new report that details every must know side of this stock. To get started, just click here now.
The article China Begins Picking Solar Winners and Losers originally appeared on Fool.com.Fool contributor Travis Hoium has no positions in the stocks mentioned above. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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