JinkoSolar's profit falls even as Q2 shipments surge to 2.88 GW

Solar modules in China. Featured Image: zhu difeng/Shutterstock.com

Sep 6 (Renewables Now) - Chinese solar manufacturer JinkoSolar Holding Co Ltd (NYSE:JKS) today said second-quarter module shipments jumped to a record high of 2.88 GW, but margins remained low and net profit contracted.

Net income from continuing operations attributable to ordinary shareholders arrived at CNY 47.4 million (USD 7.3m/EUR 6m), down from CNY 60.6 million in the first quarter of 2017 and CNY 280.1 million a year ago. The company’s gross margin was hurt by declining average selling prices (ASPs) and relatively high prices along the supply chain. CEO Kangping Chen said that in order to ensure timely delivery, the company worked with OEM partners more extensively than expected, which also affected margins.

“We are currently reviewing our strategy in order to improve profitability and further cut down the use of OEM going forward. Our efforts will also be focused on strengthening inventory management and controlling operating expenses,” Chen added.

In CNY million, unless specified Q2 2017 Q1 2017 Q2 2016
Net profit to ordinary
shareholders from cont ops
47.4 60.6 280.1
Non-GAAP net profit 61.2 80.4 344.1
Net exchange gain (loss) (34.2) (5.2) 67.1
Income from operations 85.3 56.8 308.8
Gross margin (in %) 10.5 11.2 18.1
Total revenues 7,920 5,780 5,670
Total solar module shipments (in MW) 2,884 2,068 1,716

The bottom line result also includes an income tax benefit of CNY 32.5 million thanks to additional 2016 income tax deduction for R&D costs approved by local tax bureau.

Demand for solar products in China was very strong in the reporting period, ahead of a cut to the feed-in tariff. JinkoSolar said it has strong visibility in its order book through the rest of 2017 and the company has already started taking orders for next year. The CEO added that Jinko is ramping up mono wafer and PERC cell capacity. Diamond wire-cutting multiply wafers are in mass production and are combined with the firm’s black silicon cell technology. The focus remains on efficiency and cost.

From the third quarter (Q3) of 2017 JinkoSolar has stopped developing new overseas downstream solar power plant projects, while it will complete its existing projects.

The company expects Q3 module shipments of between 2.1 GW and 2.3 GW, and is reaffirming its forecast for full-year shipments of 8.5 GW-9 GW.

At the end of June, JinkoSolar had CNY 1.9 billion in cash and cash equivalents and restricted cash and total interest-bearing debt of CNY 7.41 billion. Its in-house manufacturing capacity for wafer, cells and modules stood at 6 GW, 4.5 GW and 7.5 GW, respectively.

(CNY 10 = USD 1.55/EUR 1.3)

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Browse all articles from Tsvetomira Tsanova

Tsvet has been following the development of the global renewable energy industry for seven years now. She's got a soft spot for emerging markets.

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