Leading Chinese ‘Solar Module Super League’ (SMSL) member Jinko Solar reported strong third-quarter earnings this week beating most market expectations. But the biggest takeaway from the company’s Q3 2019 financial results was its expectation that it would ship between 18-20GW of solar modules in 2020.
Jinko Solar reported total solar module shipments for the third quarter of 2019 of 3,326 MW – a slight decline on the second quarter but a solid increase of 12.6 per cent on the same quarter a year earlier.
From a financial point of view, total revenues for the third quarter amounted to RMB7.48 billion ($A1.56 billion), a strong increase of 8.2 per cent on the second quarter and 11.8 per cent on the third quarter 2018.
Unsurprisingly, therefore, company stock jumped 10 per cent on the back of the news.
“I’m pleased to report strong operational and financial results for the third quarter which I believe marks a turning point for our business, as we begin to increasingly benefit from our technology transformation, industry-leading cost structure and expanding mono capacity,” said Kangping Chen, JinkoSolar’s Chief Executive Officer.
“Module shipments during the quarter were 3,326 megawatts, an increase of 12.6% year-over-year and a slight decrease sequentially. Our integrated production costs continued to decrease, which, combined with our high-quality products and global distribution footprint, allowed us to initiate a reset of our gross margin, expanding it to 21.3% during the quarter, a significant 6 percentage point increase year-over-year.
“We are very optimistic about our growth prospects next quarter and throughout 2020 where we expect to see our overall profitability strengthen and margins expand.”
Jinko Solar’s 2019 was universally affected by Chinese policy confusion which had an impact on the whole industry and delayed a number of projects which will only be restarted in the fourth quarter of 2019 or in early 2020.
Conversely, however, this delay in Chinese installations – still the world’s leading solar PV market – combined with solidified political certainty about the industry’s future in China, will lead to a strong six months development, boosting the solar industry’s performance moving forward after a lacklustre first half of 2018.
“This delay is expected to drive strong domestic demand over the next six months, especially since China’s national renewable energy information management center recently announced that it is accelerating the formulation of subsidy policies for PV projects in 2020,” explained Chen.
Looking forward through the rest of 2019, Jinko Solar expects to finish the year having shipped between 14 GW and 14.2 GW worth of solar modules.
But it was the company’s first indication of 2020 performance which really strengthened the company’s position, announcing it expected to ship total solar modules for the year in the range of 18 GW to 20 GW – an expected yearly increase of between 28-40 per cent.
“With domestic demand rebounding strongly and overseas demand driven by aggressive new clean energy targets, we expect the fourth quarter and full year 2020 to generate strong growth in shipments and strengthen our overall profitability and margin profile,” Chen concluded.
“With the demand growing rapidly both domestically and overseas for our mono products, we have strategically decided to convey our confidence in next year’s strong growth with total solar module shipments expected to be in the range of 18.0 GW to 20.0 GW for the full year 2020, an approximately 35% year-over-year increase.
“As one of the largest and most innovative solar module manufacturers in the world, we will continue to drive growth in this new era of grid parity and deliver long-term sustainable value to our shareholders.”