Chinese recovery will begin before year-end, according to Jinko

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The heralded late-year surge in Chinese solar project capacity is still on the cards, according to module giant JinkoSolar, which today published another set of big numbers for its quarterly results.

Despite predictions the world’s biggest solar market would recover from months of policy doubt and bounce back from the start of September having proven over-optimistic, the Shanghai-based manufacturer said the long-awaited rally would be taking place in this quarter and in the first three months of the new year.

Quite how much Jinko’s prediction it will ship 18-20 GW of modules next year is based on a yet-to-materialize surge in orders from China was not explained by chief executive Kangping Chen in his commentary on the latest three-month figures but the fact the company again shifted big volumes of its products was beyond doubt.

A turning point?

Jinko announced record quarterly gross profit and income from operations figures for the July-to-September period on the back of 3,326 MW of module shipments, “nearly 75%” of which were high-efficiency monocrystalline models. That shipment figure was actually down slightly from the 3,386 MW moved in the previous quarter but up on the 2,953 MW shipped in the third quarter of last year.

A rise in module average selling prices, and a bigger volume of multicrystalline wafer sales, helped boost quarterly revenue to RMB7.48 billion ($1.06 billion) for RMB639 million income, compared to RMB260 million in the previous reporting period and RMB188 million a year earlier. With quarterly gross margin of 18.5% lifted to 21.3% courtesy of a reversal benefit of RMB212 million to revenues arising out of the U.S. Department of Commerce’s latest review of countervailing and anti-dumping duties, net income for the period rose from RMB125 million in Q2 to RMB364 million.

CEO Chen expects 20% more solar capacity to be installed worldwide next year and said the latest figures represented “a turning point” for Jinko given how advanced its switch to mono production is. The company expects 99% of its shipments in the current quarter to be high efficiency mono products and said it expects to hit full annual production capacity of 800 MW for its 24.58% efficient n-type cells next year.

Continual expansion

And the expansion plans do not stop there, with Jinko intending to boast 22 GW of annual module production capacity next year, 20 GW of wafer capability – 18 GW of it devoted to mono grade output – and 10.6 GW of cell lines.

There is a price tag, of course, with Jinko’s short-term borrowings widening from RMB7.1 billion to RMB7.88 billion as part of a RMB30 billion list of current liabilities and RMB33.8 billion of total commitments.

However, if the New York Stock Exchange-listed Chinese giant can hit a bullish 2020 revenue target of $1.17-1.23 billion, helped by gross margin of 20.5%, it should be able to keep up its repayments.

In terms of the current quarter, Jinko expects to have shipped 4.2-4.4 GW of products by the end of the year. It may be instructive to learn how many of those shipments are destined to stay in China.