Logistical issues and blockages impacted shipments of Chinese solar wafer, cell and module maker JinkoSolar Holding Co. Ltd. during Q3/2021 due to delay in sales revenue recognition as it shipped 4.993 GW capacity, down 4% sequentially and down 2.4% annually. Management has lowered 2021 annual shipment outlook to between 22.8 GW and 24.3 GW, down from previous estimate of 25 GW to 30 GW (see JinkoSolar Shipped 4 GW Modules In Q2/2021).
JinkoSolar's Chairman of the Board of Directors and CEO Xiande Li said the industry is currently facing the 'most severe shortage' of polysilicon. He expects to gradually return to sufficient silicon levels from 2022, which will increase installation demand.
"Logistics costs have further increased compared with the 2nd quarter, and module prices hit a new high in almost a year. However, due to the transition to renewable energy in most regions of the world, the increase in electricity prices, financing support and other favorable policies, clients are more willing to accept higher module prices," added Li.
Q3/2021
JinkoSolar reported $1.33 billion revenues for the reporting quarter, that increased 8.1% sequentially thanks to an increase in shipment of modules sold at a higher selling price, compared to cells and wafers.
Gross profit of $201.1 million in Q3/2021 went down by 4.6% sequentially and 13.3% annually, while gross margin was locked in at 15.1%.
During the reporting quarter, Jinko Solar said it managed to reduce its cell production cost by more than 10% on QoQ basis as its 7 GW new cell production capacity achieved full production.
Large sized modules accounted for nearly 50% of module shipments in Q3/2021 for the company. Come Q1/2022, it targets to have around 16 GW of N-type cell production capacity operational to increase the share of N-type products to account for a minimum of 50% growth in annual shipments in 2022.
With an aim to have a 'sound and diversified global industrial chain infrastructure', Jinko Solar is awaiting its 7 GW monocrystalline silicon wafer plant in Vietnam to start production in 2022.
Going forward, the company has guided for total shipments in Q4/2021 to add up to 7.3 GW to 8.8 GW, representing revenues of $1.8 billion to $2.2 billion, and a gross margin of 13.0% to 16.0%.
"JKS delivered a healthy Q3 and guided Q4 shipments down ~30% vs. prior outlook," commented Philip Shen of Roth Capital Partners, adding, "Challenges with high input costs, logistics, and WRO remain near- term, though we believe there is now some light at the end of the tunnel."
He pointed at Jinko's management quickly ramping up its non-China supply chain (non- China poly, Vietnam ingot/wafer, SEA cell/module) to serve the U.S. bypassing WRO risk, but emphasized that 'anti-circumvention risk remains on the horizon for this supply chain.' " While the new 7 GW of wafer capacity likely achieves WRO compliance, we note that any retroactive tariffs brought on by potential country specific anti- circ cases could jeopardize these volumes." Recently a claim of the American Solar Manufacturers Against Chinese Circumvention (A-SMACC) requesting to launch circumvention inquiries into solar products shipped into the US by Chinese companies from Vietnam, Malaysia and Thailand was rejected by US Commerce Department, but this was because of A-SMACC's decision to not identify the individual companies that make up the group (see US Rejects A-SMACC's Tariff Requests).
JinkoSolar will present about its n-type technology at the TaiyangNews High Efficiency Solar Conference, which will take place online from Dec. 14-16 and cover the latest developments in PERC, TOPCon and HJT. Free registration here.