With an expected demand pull from China and an exclusion for double-sided modules in the U.S., JinkoSolar exhibited confidence heading into the third quarter. For Q2, the Chinese-based manufacturer reported an uptick in module shipments and stable gross profit and margin.
Due to expanding mono wafer production capacity in China and “optimization of cost structure,” the world’s largest PV manufacturer said it's confident that it can maintain profitability in the second half of 2019. The company's full-year module shipment guidance remains unchanged at 14 to 15 gigawatts.
Highlights of Jinko’s Q2 report:
- Module shipments reached 3,386 megawatts, an increase of 11.5 percent over the previous quarter and 21.2 percent over Q2 2018.
- Revenues reached about $1 billion, up from $868 million in Q1 of this year and $916 million in Q2 2018.
- Jinko hit gross profits of $167 million, compared to $110 million in the same quarter last year and $144 million in Q1 2019.
Though overseas shipments accounted for over 90 percent of Jinko’s orders in Q2, the company expects Chinese demand to buoy shipment numbers and revenue in the latter half of the year due to new policy certainty. In July, the government announced it would offer feed-in tariffs in 2019 to more than 3,000 projects totaling 22.78 gigawatts.
“With China’s latest subsidy policy announcement in July, the Chinese market is expected to regain considerable installation demand starting in late third quarter,” said Gener Miao, the company’s chief marketing officer, on the company’s earnings call last week.
Miao added on the call that Jinko expects U.S. demand to shift toward bifacial modules, which the Trump administration excluded from the Section 201 tariffs in June.
That announcement provided a boost to a technology that many solar companies already viewed as promising. In May, the largest order Canadian Solar has ever signed included a mix of bifacial and traditional modules. That company unveiled a new bifacial module model earlier this summer.
In May, Jinko released a new bifacial module in collaboration with chemical giant DuPont.
Encouraged by the U.S. exclusion, CEO Chen Kangping said, “The new lightweight bifacial technology has huge potential to go mainstream.” That echoes a company line that Jinko offered up in Q1, right after the administration announced the exclusion.
While the U.S. and China present significant market opportunity, Jinko sold to over 100 countries worldwide in Q2. The company cited Japan, Vietnam, Australia, Europe, Mexico and Chile as markets where it is eyeing expansion.
“As grid parity becomes a reality, demand will increasingly become sustainable globally, and will be less susceptible to fluctuations caused by policy changes,” said Miao.
Next-generation mono-PERC technology continues to “grow steadily” as a percentage of Jinko’s demand. Executives said it should account for 70 percent of total shipments by the end of 2019.
That shift toward monocrystalline technology continues within the industry. Mono capacity also boosted Q2 results for Jinko competitor Longi Solar, which announced in April that it would double mono module production capacity from 2018 to 2019. Longi's mono wafer sales grew 183 percent year-over-year, and the company said it was accelerating its plans to "match the market demand for high-efficiency monocrystalline wafers."
In April, Jinko also announced it would also invest in a new manufacturing facility in China to help meet global demand for high-efficiency solar products.
On its Q2 call, Jinko said its high-efficiency mono wafer production would increase from 6.5 gigawatts in Q2 2019 to 11.5 gigawatts by the end of the year as it ramps that facility. That plant will reach 16.5 gigawatts in capacity once complete. Chief Financial Officer Charlie Cao said that investment is expected to increase gross margin — which remained relatively flat in Q2 at 16.5 percent compared to 16.6 percent in Q1 2019 — in the second half of the year.
That factory comes in addition to the recent opening of Jinko's U.S. factory in Florida. In July, the company told Greentech Media that it's "fully equipped, fully staffed and operating 24/7," but declined to comment on the capacity the plant was producing at that time.
In Q2, Jinko said its annual silicon wafer capacity reached 10.5 gigawatts, solar cell capacity grew to 7.4 gigawatts and module production increased to 12.6 gigawatts. The manufacturer expects those numbers to grow to 15 gigawatts, 10.5 gigawatts and 16 gigawatts, respectively, by the end of the year. Mono capacity from the China facility will account for 11.5 gigawatts of that total, with PERC cell capacity at 9.7 gigawatts and 800 megawatts of N-type cell capacity.