Auriga is out this morning initiating coverage on recent solar IPO Jinko Solar (JKS) with a Buy rating and $23 price target (more than double the current price.  Despite viewing the company as a 2nd tier China solar manufacturer, the firm sees considerable value in the stock.

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“We believe the shares are substantially undervalued and see significant upside to our $23 price target. Given our analysis of the publicly filed documents, we believe the manufacturing cost structure is not well understood, and thus new investors should find JKS highly attractive. Based on our model, we find the shares trading at just 3.4x our 2011 EPS of $3.28, which is a large discount to its peer Chinese solar companies that are trading at an average of 11.4x. We acknowledge that Jinko Solar is an unproven public company and does not deserve a comparable multiple to its peers; thus we assign a below-average multiple of just 7x to our 2011 EPS estimate to derive our $23 price target.”