JinkoSolar returns to profitability in second quarter

China’s JinkoSolar was back in the black in the second quarter, posting a net profit of CNY 49 million ($8 million) compared to net losses of CNY 310.5 million a year ago and CNY 128.7 million in the first quarter of 2013.

The photovoltaic manufacturer, which has production facilities in Jiangxi and Zhejiang provinces in China and a global marketing center in Shanghai and 13 offices worldwide, reported a year-on-year increase of nearly 42% in overall revenue to CNY 1.76 billion ($287.6 million).

The company’s operating profit rose significantly to CNY 155.8 million (US$25.4 million) from a second-quarter loss last year of CNY 82.5 million.

JinkoSolar reported total solar product shipments of 489.2 MW in the period, consisting of 460 MW of solar modules, 11.1 MW of silicon wafers and 18.1 MW of solar cells, and representing an increase of 62% in the second quarter of 2012.

JinkoSolar CEO Kangping Chen said the company’s leading position in the global PV market was further solidified by increasing demand from regions where it had made strategic investments and efficiently executed its strategy.

"We increased shipment volumes and expanded our gross margin to 17.7%, making JinkoSolar among the first Chinese module producers to return to net profitability since the downturn,” Chen said, adding that the company had recently increased its integrated production capacity from 1.2 GW to 1.5 GW as a result of technological improvements and the upgrading of production lines.

JinkoSolar forecasts full-year net profitability for 2013

"By persevering through our strategy, we have successfully navigated the rapidly changing solar power environment to emerge a stronger, profitable, more nimble company,” Chen said. “Most importantly, we expect to realize net profitability for the entire year as we are confident that this quarter’s strong operational and financial performance is indicative of our future performance."

Indeed, the company has revised its module shipments for 2013 and is now expecting them to be in the range of 1.5 GW to 1.7 GW, compared to its previous outlook of 1.2 GW to 1.5 GW.

Chen added that the group’s decision to increase operations globally had reduced its reliance on Europe while expanding its presence in emerging markets such as Japan, the United States, South Africa and India as well as the domestic Chinese market.

"Q2 2013 marked the turning point for the PV module industry"

Stefan de Haan, principal analyst at market research group IHS, said JinkoSolar’s performance was in line with that of other Tier 1 Chinese manufacturers.

The second quarter of 2013 "marked the turning point for the PV module industry and a return to profitability – as expected," de Haan said, adding that leading Chinese players have seen accelerated growth in markets such as Japan, China and the U.S. and also benefited from stabilizing pricing.

De Haan pointed out that the on-going anti-dumping investigation in the EU turned out to be a positive bonus for the big Chinese module manufacturers, at least in the short-term, "as price increases could be pushed downstream to customers, and European customers increased orders to stock-pile modules ahead of the introduction of tariffs."

The investigation also led Chinese vendors to accelerate their plans to penetrate emerging markets and so may also benefit them in the longer term, he added.