JinkoSolar & Canadian Solar STAR Listing Plans Update

• JinkoSolar and Canadian Solar have each submitted their application documents for IPO of their respective subsidiaries for STAR market listing in China
• JinkoSolar plans to issue up to 2,666,666,666 shares, and Canadian Solar will sell 541,058,824 stock
• Canadian Solar separately announced winning 86 MW solar power capacity in Japan's 8^th solar energy auction

Shanghai Stock Exchange (SSE) has received application documents from 2 leading solar module manufacturers, Canadian Solar & JinkoSolar, the companies announced on the same day, but separately. STAR Market or the SSE's Sci-Tech Innovation Board backs innovative Chinese companies.

JinkoSolar has submitted the application for a potential initial public offering (IPO) of its principal operating subsidiary Jinko Solar Co., Ltd. or Jiangxi Jinko, originally announced in September 2020 (see JinkoSolar Seeking Chinese Litsing on STAR Market). According to the company, it plans to issue not more than 2,666,666,666 shares of the subsidiary, representing 10% to 25% of the total share capital upon completion of the offering.

This would bring down the parent company JinkoSolar's holding in the subsidiary to around 54.96%, from currently 73.28%. The company plans to use the proceeds to invest on the construction of the following 2 projects, and also keep RMB 1.5 billion as additional working capital.

• 5 GW high efficiency solar cells line in Haining, and 5 GW high efficiency modules to cost a total of RMB 6 billion. Jiangxi Jinko plans to invest around RMB 4 billion from the IPO proceeds for this project
• R&D center construction, also in Haining that's likely to cost RMB 749.8 million. Proceeds should contribute close to RMB 500 million.

On the other hand, Canadian Solar plans to issue up to 541,058,824 shares of its subsidiary CSI Solar which was previously mainly the module and system solutions and China Energy business. On completion of the listing as planned, Canadian Solar's stake in the subsidiary will come down from around 80% now to close to 64%.

Canadian Solar said the proceeds will be used to 'strengthen CSI Solar and the company's market leadership position by investing in capacity expansion across the solar value chain, research and development and additional working capital for the subsidiary'. The IPO plans of the company have been in the offing since July 2020 (see Canadian Solar Wants Capital Market Access In China).

Philip Shen of Roth Capital Partners commented on Canadian Solar's STAR listing update, "We believe the timing of the announcement is consistent with management's planned timeline for a completed offering by YE'21, but with potential for it to slip into 2022."

Recently, Daqo New Energy subsidiary Xinjiang Daqo completed its IPO registration with China Securities Regulatory Commission and said is in the process of applying for IPO issuance on the STAR market.

Meanwhile, Canadian Solar also announced separately that it has won the largest capacity of 86 MW in Japan's 8^th solar energy auction. It will develop the 86 MW capacity in the form of 3 projects in Tohoku region as 80 MW in Miyagi Prefecture, 3 MW in Fukushima Prefecture and 3 MW in Aomori Prefecture. All the 3 projects will come online between 2024 and 2026, and supply clean energy to Tohoku Power Electric Company for a weighted average rate of JPY 10.77 ($0.098) per kWh, under a 20-year power purchase agreement (PPA).