Chinese vertically integrated module producer JinkoSolar Holding Co., Ltd. has reported its module shipments for Q2/2021 having dropped 11% YoY and 12.8% QoQ to 3.976 GW, which is part of total shipments of 5.203 MW during the quarter, comprising 1.227 GW of cell and wafers.
For this drop in module shipments that were initially guided between 4.0 GW to 4.2 GW, JinkoSolar said it 'proactively lowered' volume of solar module production while increasing external sales of silicon wafers as it tried to respond to price increases from upstream to downstream in the industry chain.
Lowered shipment volumes also pulled down revenues for the quarter that dropped 6.2% YoY and 0.2% QoQ to $1.23 billion, with gross profit of $210.5 million which saw a drop of 10.2% on annual basis, but increased 0.1% on quarterly basis.
Management shared a quarterly EBITDA of $143 million reflecting an improvement of 9.5% YoY and 16.2% QoQ.
Meanwhile, JinkoSolar is working on increasing the 'reliability' of its services to the US market for which it counts the 70,000 tons polysilicon supply contract with Wacker Chemie (see JinkoSolar Wants 70,000 Ton Polysilicon From Wacker). It has also started construction of a 7 GW wafer plant in Vietnam that's going to cater to the company's production facilities in Malaysia and the US (see JinkoSolar Building 7 GW Wafer Plant In Vietnam).
It has also secured a strategic logistic cooperation agreement with Maersk and China COSCO Shipping Corporation. "We further improved our traceability system for procurement and production," said JinkoSolar's Chairman of the Board of Directors and CEO Xiande Li.
Manufacturing expansion
While sharing Q1/2021 financial results, JinkoSolar had shared its total production capacity target to be achieved by 2021-end as 30 GW for monocrystalline silicon wafers, 24 GW for high efficiency solar cells (including 940 MW of N-type) and 33 GW for high efficiency modules. It was a drop from 33 GW, 27 GW and 37 GW, respectively that it shared in its 2020 financials (see High Module Prices Impact JinkoSolar's Q1/2021 Revenues).
Now, JinkoSolar has again offered an upward revision for its manufacturing plans to grow to 32.5 GW of mono wafers, 24 GW cells (including 940 MW of N-type), and 45 GW of modules by the end of 2021, which means for wafers its basically nearly back to its earlier capacity plans while the module targets is even 8 GW higher.
Guidance
Going forward, the manufacturer targets between 5.0 GW to 5.5 GW as total shipments with revenues of $1.24 billion and $1.37 billion for Q3/2021. Gross margin for the quarter is expected to be 12% to 15%. For full year 2021, the management has reiterated total shipments in the range of 25 GW to 30 GW as it remains optimistic of global demand in H2/2021 and in 2022. The company confirmed it will accelerate market expansion in China.
These plans point towards the fact that JinkoSolar could be expecting to ship as much as 9 GW capacity in Q4/2021 alone.
For H2/2021, JinkoSolar's CFO Mengmeng Li expects raw material prices to further stabilize and production volume to gradually increase. Cost reductions from the new 7 GW large sized solar cells production capacity, brought online during Q2/2021, may positively impact profitability.
Large sized products are expected by the company to account for close to 50% of its total shipments during H2/2021. It is also carving out a bigger role for distributed generation business that's likely to represent around 40% of its total shipments for 2021, compared with 20% to 25% in 2020.
Jinko presented updates and background on its high efficiency panels at the TaiyangNews Very High Power Solar Module Conference 2021; Jinko's and other leading module suppliers' presentations can be accessed here.