Jinko Solar Q1/2016

Chinese Module Maker Ships 1.6 GW in Q1, More Than Anyone Else
05:25 PM (Beijing Time) - 31. May 2016
n_bus_financial results_JinkoSolar_Q1 2016_photo_ab 2016-05-27

Key Takeaways

  • Jinko Solar shipped 1.6 GW in Q1/ 2016, more than any other module supplier • Jinko surpassed its guidance of 1.3 to 1.4 GW of total module shipments for Q1
  • Out of the total shipments, China took 37% with emerging markets improving since last quarter to 19%
  • Module cost decreased to 37 US cents per W
  • Jinko guides shipment volume for the full year almost at level of market leader Trina Solar

JinkoSolar’s Q1/2016 module shipments of 1.6 GW not only exceeded its shipment guidance of 1.3 to 1.4 GW, it even shipped more modules in the first quarter than any other company. Its revenues of RMB 5.47 billion ($847.8 million) jumped almost 100% on YoY basis, but went down 10% sequentially. The management said that an increase in shipments of solar modules and electricity revenues lead to better revenues as compared to Q1/2015.

Jinko’s  gross margin was up at 21.3% in Q1/2016 compared to the 19.5% in Q4/2015 as well the 20.3% in Q1/2015. According to the Jinko, ‘the sequential and year-over-year increases were primarily due to the continued decrease in costs and the higher gross margins associated with electricity revenues due to newly-completed solar power projects ramping up to full capacity.’

In comparison to last year’s first quarter, all financial metrics were better in Q1/2016. Shipments in the reporting quarter even increased 102.7% YoY.
In comparison to last year’s first quarter, all financial metrics were better in Q1/2016. Shipments in the reporting quarter even increased 102.7% YoY.

The total debt for the company came to $1,614 million, increasing from $1,589 million in the previous quarter.

During the reporting quarter, the company had brought online 1,007 MW of solar power projects.

JinkoSolar had been aiming for its wafer capacity to go up to 3,500 MW by the end of 2016, which it achieved in Q1/2016 itself. Going ahead, it plans to have 3,500 MW capacity for cells in Q2/2016 up from the current 3,000 MW. As for modules, it is targeting to increase capacity by 5% to 6,300 MW by the next quarter from 6,000 MW end of Q1.

Top destination China  

While China once again made up the lion’s share in module shipments to third parties with 535 MW shipped to the region, it was down sequentially which was at 604 MW, but a huge jump from 264 MW shipped the year before. China made up 37% of the total shipments. The emerging markets improved considerably to 19% in the reporting quarter, as against 12% the previous quarter. On the other hand, Europe lost considerably – by 5% points – down to 7% quarter on quarter, indicating that the strong pull from the UK already stopped in the last 3 months of the country’s solar program.

North America, Europe and emerging markets showed strong demand for Jinko Solar’s modules, but its home country remained the top market for the vertically-integrated Chinese module maker.
North America, Europe and emerging markets showed strong demand for Jinko Solar’s modules, but its home country remained the top market for the vertically-integrated Chinese module maker.

Cost wise, it came down in its in-house cost to $0.37 per watt in the first quarter of 2016 from $0.39 per watt in the previous quarter, which is the lowest reported module cost so far.

No one else has reported silicon-based module cost at a level as low as Jinko Solar.
No one else has reported silicon-based module cost at a level as low as Jinko Solar.

Strong guidance

The management reiterated its full year guidance of module shipments in the range of 6.0 to 6.5 GW, which will include 5.4 to 5.7 GW shipped to third party. At the same time, for Q2/2016, the shipment guidance is offered as a strong 1.6 to 1.7 GW, with shipments to third party contributing 1.45 to 1.6 GW.

CEO Kangping Chen, said, “Global solar demand continues to grow as costs go down. China remains our biggest market with a number of big orders continuing to come in, a trend we believe will continue in the second quarter. Our market share in the US continued to expand. Although the ITC extension resulted in some projects being postponed, we are confident in our ability to hit our shipment targets to the US for the year with our overseas production facility providing extra flexibility and higher margins. The increasing recognition of our brand name is also generating great opportunities in exciting emerging markets such as Chile, Thailand and India.”

Trina Solar, last year’s No. 1 solar module supplier, reported its first quarter results a day before. While JinkoSolar shipped more modules in Q1 than Trina at 1,600 MW (Trina: 1,423 MW), its full-year guidance is a little bit lower –  ranging from 6 to 6.5 GW  (Trina: 6.30 to 6.55 GW). For Q2, Trina guided for total module shipments in the range of 1.50 to 1.60 GW, while JinkoSolar shoots higher for 1.6 to 1.7 GW. In any case, it looks like a tight race for the No. 1 position in module shipments this year.

Anu Bhambhani

Anu Bhambhani is the News Editor of TaiyangNews

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Anu Bhambhani