JinkoSolar Holding, a Chinese solar module manufacturer, has postponed its proposed initial public offering on the New York Stock Exchange, through which it had hoped to raise up to US$100 million. The decision reflects both January’s tepid reaction to Chinese IPOs as well as a potential glut in the capacity of global solar manufacturers. Two other Chinese solar companies, Trony Solar Holdings and Daqo New Energy, have also cancelled their planned IPOs within the past two months, citing poor market conditions.
The lackluster state of the IPO market may make it difficult for start-up greentech companies to raise funds, and JinkoSolar’s withdrawal further decreases the likelihood that companies will look to public markets to raise working capital in the near future. This could prove detrimental to private Chinese manufacturers that cannot benefit from the close government connections of state-owned alternative energy firms and lack the income streams available in more diversified energy companies.
Eventually, rising demand and less uncertainty in equity markets may enable China’s green companies to reconsider IPOs, but in the meantime they will have to rely on their own capital or private investment. This may provide an opportunity for the solar divisions of larger, integrated energy firms, such as BP Solar, to expand their competitiveness as capital concerns constrain smaller, younger competitors.