Jinko posts strong increase in shipments for 2017, but lower profits

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Chinese solar manufacturer JinkoSolar Holding Co., Ltd. was able to deliver a strong performance in shipments and sales in 2017 with around 9,807 MW in shipped products and 26.47 billion CNY (around $4.0 billion) in total turnover. This compares to 6,656 MW and 21.40 billion CNY in 2016 and represents a year-on-year growth of 47.3% and 23.7%, respectively – representing the company’s strongest ever performance.

Despite these positive figures, the company’s operating result dropped from 1.35 billion CNY in 2016 to 325.3 million CNY ($50.0 million) last year, while net result decreased year-on-year from 990.7 million CNY to 141.7 million CNY ($21.8 million). Gross profit also fell 22.7% from 3.87 billion CNY to 2.99 billion CNY ($459.8 million).

For the gross profit decrease, the company blamed lower module ASPs, higher polysilicon prices and increasing production volumes from OEM partners, while commenting the operating result it highlighted that total operating expenses for 2017 were 5.8% higher than in 2016 at 2.67 billion CNY ($409.8 million). This increase, Jinko specified, was due to higher shipping costs and warranty costs, “which were partially offset by a disposal gain in property, plant and equipment and a decrease in bad debt expenses.”

“Our gross margin was 11.3% for the year, compared to 18.1% in 2016, partially as a result of increased collaboration with OEM partners to meet surging market demand, especially in the first half of 2017, and higher raw material costs,” said the company’s CEO, Kangping Chen. Revenue from related parties, on the other hand, increased from only 138.5 million CNY in 2016 to 1.68 billion CNY last year. “We believe our gross margin and bottom line have ample room for improvement in 2018 as a result of the decrease in raw material costs, our reduced use of OEM, and enhanced cost structure supported by technology and supply chain management initiatives. We are confident in our ability to further expand our global market share in 2018,” he further explained.

As for the fourth quarter of last year, Jinko’s revenue climbed 24.0% year-on year to 6.35 billion CNY ($976.4 million), while its shipments totaled 2,481 MW, up 43.1% from the same period a year earlier. Net result for the quarter was 22.5 million CNY ($3.5 million), down from 145.8 million CNY in the same period of 2017. Operating result, however, improved year-on-year from 77.9 million CNY to 91.3 million CNY ($14.0 million).

The company stressed that during the latest quarter it also kept improving its mono wafer production process, especially in the crystalizing, cutting and argon recycling. “We broke our own world record during the quarter when solar cell efficiency for our P-type mono-crystalline PERC cell hit 23.45%. We also made solid progress in developing N type Hydride Oxide Thin Film (HOT) technology, with an industry-leading 21.9% in average cell efficiency during mass production. With demand increasing, we also plan to expand our production capacity of bifacial cell plus bifacial duo glass modules,” Jinko also said.

Looking forward, Jinko said it expects to ship between 1.8 GW and 2 GW in the first quarter of this year, while for full fiscal 2018 it forecasts shipments to be in the range of 11.5 GW and 12 GW. No more figures on expected revenue or profits were provided.