By delivering up to 1,716MW of PV modules in the second quarter of 2016, JinkoSolar made itself the world’s leader in the PV supply chain. Demand from the U.S. and China accounted the majority of JinkoSolar’s module shipments in the quarter, and the company is confident of business in the second half of 2016 as it has already built a strong book of orders.
Highlights
JinkoSolar’s financial results for 2Q16 revealed that the total module shipments reached 1,716MW, up by 7.3% from 1,600MW in 1Q16 and by 87.9% from 913MW in 2Q15.
The total revenues were RMB5.96 billion (approximately US$896.1 million), representing a 8.9% QoQ growth and a 86.1% YoY growth. Total revenues for 1Q16 and 2Q15 were RMB5.47 billion and RMB3.2 billion, respectively.
The rapid growth in total revenues was from JinkoSolar’s downstream PV projects. During the quarter, electricity output from JinkoSolar’s domestic projects improved by 55.8% sequentially to 327GWh, generating RMB285 million in revenue. By June 30, JinkoSolar has connected 1,130MW of solar projects to the grid.
The overall gross profit was RMB1.21 billion, compared with RMB1.17 billion in 1Q16 and RMB663.6 million in 2Q15. Gross margin slightly decreased from 21.3% in the previous quarter and 20.7% in the same quarter in 2015 down to 20.4%. The sequential decrease was mainly due to an increase in tariffs paid for solar modules produced in the company's Chinese production facilities and shipped to US market.
Meanwhile, gross profit for solar power projects revenues was RMB178 million, and the gross margin was 61.7%.
Technology upgrade and outlook
Although JinkoSolar reported strong results in shipments and revenue, its net income attributable to the company’s ordinary shareholders slightly decreased to RMB280.1 million in 2Q16, compared with RMB313.3 million in 1Q16, and up from RMB76.4 million in 2Q15.
The company also reported lower income from operations in 2Q16 than in 1Q16. The operating income in 2Q16 was RMB445.1 million, compared with RMB573.7 million in 1Q16 and RMB237 million in 2Q15. Margin in 2Q16 was 7.5%, down from 10.5% in 1Q16.
According to JinkoSolar, higher operating expenses caused the decline of income and margin. “The sequential and year-over-year increases in operating expenses were mainly due to increases in shipping, warranty costs, provisions of accounts receivables and impairment of property, plant and equipment. The impairment was due to the Company's replacement of certain production equipment in an effort to improve production automation,” noted JinkoSolar.
JinkoSolar estimates that the module shipments in 3Q16 will be in the range of 1.5 to 1.7GW. For the full year 2016, the company expects 6~6.5GW of total PV module shipments.
"We update our guidance for year-end manufacturing capacity to 4.5GW, 3.7GW, and 6.5GW for wafers, cells and modules, respectively. The increase is mainly as a result of increased wafer production for usage of our PERC-line products," said Kangping Chen, JinkoSolar's Chief Executive Officer. "I am confident in our ability to execute our strategy and deliver long-term sustainable growth despite a challenging global environment. We view these challenges as opportunities for us to further improve ourselves as we work to increase value for our shareholders."