JinkoSolar, a China-based first-tier solar PV manufacturer, reported a stable financial result for the third quarter of 2016 despite the frozen market. Its module shipments exceeded 1.6GW in the quarter and the total revenue was RMB 5.7 billion.
Financial Highlights
JinkoSolar reported total module shipments of 1,606MW, slightly down from 1,716MW in 2Q16 but rapidly increased from 1,135MW in 3Q15. The total revenues were RMB5.7 billion, down 4.4% QoQ while up 39% YoY.
JinkoSolar attributed the sequential loss to a decline in module selling prices and a decreased market demand in 3Q16.
Nonetheless, JinkoSolar’s financial performance was relatively stable throughout the challenging situation. Its gross profit for 3Q16 was RMB1.26 billion, compared with RMB1.21 billion in 2Q16 and RMB864 million in 3Q15. The gross margin was 22.1%, up from 20.4% in 2Q16 and 21.3% in 3Q15.
“The key is the volume of PV cells JinkoSolar purchased,” explained an analyst of EnergyTrend. “If we read specifically into JinkoSolar’s product mix and blended expenses, we would find that the company outsourced approximately two-fifth of solar cells for its PV modules. Price decline for PV cells in the third quarter was actually steeper than for PV modules, so the PV cells JinkoSolar outsourcing helped the company to maintain financially stable over the bad market situation and surprisingly reported the 22.1% gross margin.”
JinkoSolar’s net income in 3Q16 was RMB233.7 million, compared with RMB280.1 million in 2Q16 and RMB195.1 million in 2Q16. Basic and diluted earnings per ordinary share were RMB1.85 and RMB1.51, respectively, during 3Q16. This translates into basic and diluted earnings per ADS of RMB7.40 and RMB6.04, respectively.
On the other hand, JinkoSolar’s downstream PV projects, with a total capacity of 1,314MW by September 30, cumulatively generated 395GWh of electricity and contributed RMB372.4 million to its total revenue in 3Q16. The power generation increased 20.8% QoQ and 69% YoY, while revenues grew 29.1% QoQ and 81% YoY, respectively.
Product lines
As of September 30, 2016, JinkoSolar’s in-house annual wafer, PV cell and PV module production capacity was 4.5GW, 3.7GW, and 6.5GW, respectively. For the fourth quarter of 2016, JinkoSolar estimates the total module shipment will be in the range of 1.7~1.8GW; for the full year 2016 to be 6.6~6.7GW.
"Our business continued to gain growth momentum despite a challenging environment,” stated Kangping Chen, JinkoSolar's Chief Executive Officer. “Based on our visibility into the fourth quarter of 2016, we are once again raising our full year 2016 shipment guidance to 6.6GW to 6.7GW from our previous guidance of 6.0GW to 6.5GW. We are well positioned to continue benefitting from the global adoption of solar energy, which is playing a more important role in the global energy landscape.”
JinkoSolar continuously takes China as the major market and expects the domestic demand to peak again in the first half of 2017 with the announcement of the next round of FiT cut. Demand in the U.S., Chen expressed, will heat up again in the second half of 2017 because the recent market panic will only be temporary.
JinkoSolar has voluntarily existed from EU’s MIP agreement and will supply products to European customers, along with Indian, Chilean, Mexican and the UAE buyers with different strategies, including opening new offices or offering local technical and logistical supports.
JinkoSolar plans to stress more on smart modules, anti-PID high-efficiency modules and 1500V modules. Furthermore, the company revealed to introduce a new Eagle PERC mono-si PV modules in 1Q17 that have higher power gain then today’s mono-si PERC modules.
"We continued to focus on developing high-efficiency products,” added Chen. “Our mono wafer capacity using diamond-wire cutting is now operational and is scaling up rapidly to support our high-efficiency PERC lines."