Jinko Solar revenues grow 11.2% in third quarter

China’s Jinko Solar on Monday posted an 11.2% third quarter increase in revenue since Q2, generating total revenues of $320.7 million. This solid performance represented a 47.6% increase on the same quarter in 2012.

The Shanghai-based group saw net income between July and September more than double to $16.9 million compared to Q2 and a strong recovery from the $18.4 million net loss it suffered a year ago.

JinkoSolar shipped 518.9 MW of equipment in the third quarter, a 54.8% increase on the same period in 2012. Solar modules formed the bulk of these shipments with 489.3 MW shipped, followed by solar cells (18.7 MW) and silicon wafers (10.9 MW).

As a result of this upturn in market activity, JinkoSolar achieved a gross margin of 22.3% for the third quarter, a steady increase on Q2’s 17.7% and an impressive leap on last year’s margin, which limped in at just 5.8% in Q3.

The company’s operating activities generated a cash flow of $127.5 million, helping Jinko Solar’s diluted earnings per American depository share (ADS) to increase to $0.72 per ADS, which is the equivalent of four shares.

Commenting on the company’s second consecutive quarter of profitability following robust quarter-over-quarter growth in revenue, module shipments and gross margins, JinkoSolar CEO Kangping Chen said the group had "picked up considerable momentum from the strategic investments we made during the downturn."

Chen said the company had during that time successfully penetrated new markets, broadened its geographic reach and expanded its downstream business, which has already resulted in net profitability for the entire year – a goal initially set for the end of 2013.

"We now look forward to closing out the year on an even stronger footing," the chief executive added. "Having regained profitability for a second quarter, and having achieved net profitability for the entire year a quarter ahead of schedule, we are now devoting our substantial resources and attention towards growing our core PV business and to rapidly expanding our downstream business."

JinkoSolar will use some $67.8 million raised in the capital markets to further improve its working capital and cash reserves and is "eager to put the cash to work," Chen said. "The capital will be used to supplement our working capital and invested into one of the most exciting business segments: our downstream solar projects."

Noting JinkoSolar’s transformationfrom a traditional manufacturer to a one-stop energy solution provider, Chen said he was "very optimistic about the opportunities this will bring," adding that the group had already connected 105 MW to the grid and was focused on connecting another 108 MW during the fourth quarter.

"This will be followed by an additional 300 MW earmarked to be connected by the end of 2014 with the support of financial partners such as China Development Bank as we plan to focus more on distributed PV systems," he added.

The Chinese government recently increased its solar installation target for 2014 by 20% to 12 GW, a clear commitment towards renewable energy that Chen said is expected to result in increased demand for both solar farms and distributed PV systems.

Chen added that the company’s pipeline included 700 MW in utility scale projects and more than 400 MW for distributed systems, putting JinkoSolar in a unique position to benefit greatly as the market grows.