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IPOs - Asia

China's JinkoSolar promises growth, markets wary

* Shares flat from IPO price on first day

* Management sees capacity near 500 MW by year end

* Lackluster debut underscores uncertainty in the sector

LOS ANGELES, May 14 (Reuters) - JinkoSolar Holding Co Ltd JKS.N aims to more than double production capacity this year, and become a top solar player within five years, but investors' reaction to the company's debut on Friday was lukewarm.

The Chinese company, which makes solar cells and modules and silicon wafers, raised $64.2 million on Thursday by selling 5.84 million American depositary shares (ADS) for $11 each, the low end of its planned price range. [ID:nN13234356]

The stock rose 1 cent to close at $11.01 on its first day of trade on the New York Stock Exchange; a day when the broader U.S. market fell.

Such a flat debut highlights the challenges that the solar sector faces now as subsidy cuts in Germany, the world’s No. 1 solar market, are scheduled to be implemented in July.

Those cuts have pulled demand and sales for the renewable power source forward, but stocks have generally not followed as analysts and investors wait for better visibility.

In a telephone interview with Reuters, members of JinkoSolar’s senior management team brushed off negative views on the sector, but gave few forward-looking details. They declined to comment on the company’s market reception.

"This year is very strong. We see new emerging markets coming that we think are very active -- like the United States, like China in the future, but mainly in Europe -- France, Czech Republic and also Belgium for example," said Arturo Herrero, JinkoSolar's chief strategy officer, who previously worked for Trina Solar Ltd TSL.N.

“We are diversifying our risk worldwide,” he added.

The company, which started operations in 2006, has customers in China, Hong Kong, Germany, the United States, India, France and Spain, among other countries.

JinkoSolar posted sales of $80.4 million (548.9 million yuan) in the first quarter, a 20 percent decrease from the fourth quarter of last year. Margins grew to 23.7 percent, from 16.2 percent in the fourth quarter.

JinkoSolar is one of a handful of vertically integrated, China-based solar companies working to ramp up their production. Others include: Trina, LDK Solar Co LDK.N, Yingli Green Energy Holding Co Ltd YGE.N and Suntech Power Holdings Co Ltd STP.N.

The company’s chief financial officer, Longgen Zhang, said JinkoSolar plans to use proceeds from its offering to fund expansion. The company expects to increase its annual capacity to nearly 500 megawatts by the end of this year.

At the end of March, it had solar cell and module production capacities of 200 MW.

“We think we can move Jinko to the next step, even within three-to-five years, (to become) one of the top players,” Zhang said. ($1=6.83 yuan) (Reporting by Dana Ford, editing by Leslie Gevirtz)

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