JinkoSolar(JKS) - 2024 Q1 - Quarterly Report

Performance Highlights JinkoSolar achieved record 2023 module shipments and revenue, but Q4 gross margin compressed to 12.5% due to price declines Fourth Quarter and Full Year 2023 Business Highlights The company achieved record 2023 module shipments, solidified its industry leadership with N-type technology, and improved its ESG rating - Full year 2023 module shipments increased 76.4% year-over-year to 78.5 GW, ranking first in the industry, driven by N-type technology and global operations[2] - Became the first manufacturer to deliver a cumulative total of 210 GW of solar modules, with a presence in over 190 countries and regions[2] - The company holds 330 TOPCon patents and has achieved a mass production efficiency for N-type TOPCon cells exceeding 26%[2] - MSCI ESG rating was upgraded two levels to 'BBB', placing it in a leading position among mainstream PV companies[2] Fourth Quarter 2023 Operational and Financial Highlights This section presents key operational and financial metrics for the fourth quarter of 2023, highlighting revenue, profit, and margin performance Q4 2023 Key Metrics | Metric | Q4 2023 | Change (QoQ) | Change (YoY) | | :--- | :--- | :--- | :--- | | Total Shipments | 27,862 MW | +23.3% | +67.7% | | Total Revenues | RMB 32.83 Billion | +3.1% | +9.4% | | Gross Profit | RMB 4.09 Billion | -33.3% | -2.8% | | Gross Margin | 12.5% | from 19.3% | from 14.0% | | Income from Operations | RMB 352.5 Million | -88.2% | -42.6% | | Net Income (to shareholders) | RMB 29.3 Million | -97.8% | -95.6% | | Adjusted Net Income | RMB 462.7 Million | -65.7% | +72.8% | | Diluted EPS (per ADS) | US$0.08 | from US$4.62 | from US$1.25 | Full Year 2023 Operational and Financial Highlights This section provides a summary of JinkoSolar's full-year 2023 operational and financial performance, including shipments, revenues, and profitability Full Year 2023 Key Metrics | Metric | Full Year 2023 | Change (YoY) | | :--- | :--- | :--- | | Total Shipments | 83,562 MW | +80.1% | | Total Revenues | RMB 118.68 Billion | +42.8% | | Gross Profit | RMB 19.05 Billion | +55.1% | | Gross Margin | 16.0% | from 14.8% | | Income from Operations | RMB 6.09 Billion | +1320% | | Net Income (to shareholders) | RMB 3.45 Billion | +456% | | Adjusted Net Income | RMB 4.07 Billion | +193% | | Diluted EPS (per ADS) | US$8.58 | from US$3.10 | Management Commentary Management discusses Q4 margin compression, N-type technology leadership, reduced 2024 capacity expansion, and anticipates industry consolidation with increased market share - Q4 gross margin fell to 12.5% from 19.3% in Q3, attributed to unexpected module price drops and a sales mix with nearly 50% of modules sold to the lower-priced Chinese market[5] - The integrated cost of N-type production is now almost on par with P-type, with mass-produced N-type cell efficiency exceeding 26%[6] - The company is reducing capital expenditures for capacity expansion in 2024, focusing on advanced N-type capacity, including 28 GW in Shanxi, China, and about 4 GW in Vietnam[7] - Management predicts significant industry consolidation in 2024, with the market share of the top 10 module manufacturers expected to increase from approximately 70% in 2023 to over 90%[8] Detailed Financial Results This section provides a detailed overview of JinkoSolar's financial performance for Q4 and full year 2023, highlighting revenue, gross profit, and balance sheet changes Fourth Quarter 2023 Financial Results This section details JinkoSolar's fourth quarter 2023 financial performance, including revenue, gross profit, and operating expenses, noting margin compression Q4 2023 Performance vs. Prior Periods (RMB) | Metric | Q4 2023 | Q3 2023 | Q4 2022 | | :--- | :--- | :--- | :--- | | Total Revenues | 32.83 Billion | 31.83 Billion | 30.00 Billion | | Gross Profit | 4.09 Billion | 6.13 Billion | 4.21 Billion | | Gross Margin | 12.5% | 19.3% | 14.0% | | Income from Operations | 352.5 Million | 2.99 Billion | 614.4 Million | | Net Income (to shareholders) | 29.3 Million | 1.32 Billion | 665.0 Million | - The sequential and year-over-year decreases in gross margin were mainly due to the decrease in the average selling price of solar modules[11] - Total operating expenses increased 18.9% sequentially to RMB 3.74 billion, mainly due to a loss on disposal of property, plant and equipment, and expenses related to a customer dispute settlement[12] Full Year 2023 Financial Results This section outlines JinkoSolar's full-year 2023 financial results, detailing revenue, gross profit, and operating expenses, highlighting improved profitability Full Year 2023 Performance vs. 2022 (RMB) | Metric | Full Year 2023 | Full Year 2022 | | :--- | :--- | :--- | | Total Revenues | 118.68 Billion | 83.13 Billion | | Gross Profit | 19.05 Billion | 12.28 Billion | | Gross Margin | 16.0% | 14.8% | | Income from Operations | 6.09 Billion | 429.2 Million | | Net Income (to shareholders) | 3.45 Billion | 620.5 Million | - The year-over-year increase in gross margin to 16.0% was mainly attributable to the decrease in the material cost of solar modules[20] - Total operating expenses for 2023 were RMB 12.96 billion, representing 10.9% of total revenues, an improvement from 14.3% in 2022[21] Financial Position as of December 31, 2023 This section summarizes JinkoSolar's financial position as of December 31, 2023, including cash, receivables, inventories, and interest-bearing debts Balance Sheet Highlights (as of Dec 31) | Account | 2023 | 2022 | | :--- | :--- | :--- | | Cash, Cash Equivalents & Restricted Cash | RMB 19.56 Billion | RMB 11.27 Billion | | Accounts Receivables (from third parties) | RMB 22.66 Billion | RMB 16.67 Billion | | Inventories | RMB 18.22 Billion | RMB 17.45 Billion | | Total Interest-bearing Debts | RMB 31.10 Billion | RMB 27.16 Billion | Operational Highlights & Business Outlook This section details JinkoSolar's 2023 operational performance and provides 2024 guidance for shipments and production capacity, emphasizing N-type technology adoption Operational Highlights This section presents JinkoSolar's detailed shipment volumes for the fourth quarter and full year 2023 across modules, cells, and wafers Shipment Volumes | Period | Total Shipments | Solar Module Shipments | Cell & Wafer Shipments | | :--- | :--- | :--- | :--- | | Q4 2023 | 27,862 MW | 26,335 MW | 1,528 MW | | FY 2023 | 83,562 MW | 78,520 MW | 5,043 MW | Business Outlook and 2024 Guidance This section outlines JinkoSolar's business outlook and guidance for 2024, including expected N-type module proportion, shipment targets, and production capacity plans - The proportion of N-type modules in total shipments is expected to reach nearly 90% in 2024[27] 2024 Shipment and Capacity Guidance | Guidance | Q1 2024 | Full Year 2024 | | :--- | :--- | :--- | | Module Shipments | 18.0 - 20.0 GW | 100.0 - 110.0 GW | | End of 2024 Capacity | | | | Mono Wafer | - | 120.0 GW | | Solar Cell | - | 110.0 GW | | Solar Module | - | 130.0 GW | Recent Business Developments JinkoSolar's recent developments include extending its share repurchase program, achieving SBTi Net-zero validation, and monetizing N-type TOPCon patent licenses - The board extended its share repurchase program through June 30, 2025[29] - Jiangxi Jinko's science-based emissions reduction targets were approved by SBTi, making JinkoSolar the first PV company globally to have its Net-zero targets validated[29] - Granted N-type TOPCon patent licenses to a top-ten module company and a top-five cell company, monetizing its intellectual property[29] Unaudited Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements for Q4 and full year 2023, including Statements of Operations, Comprehensive Income, and Balance Sheets Statements of Operations This section provides the unaudited condensed consolidated statements of operations for the fourth quarter and full year ended December 31, 2023 - Presents the unaudited condensed consolidated statements of operations for the fourth quarter and full year ended December 31, 2023, with comparative data for prior periods[37][38] Statement of Comprehensive Income This section details the unaudited condensed consolidated statement of comprehensive income for the fourth quarter and full year 2023 - Details the comprehensive income, including net income and other comprehensive income items like foreign currency translation adjustments, for the fourth quarter and full year 2023[42] Balance Sheets This section provides the unaudited condensed consolidated balance sheets, detailing the company's financial position as of December 31, 2023 - Provides the company's financial position as of December 31, 2023, detailing assets, liabilities, and shareholders' equity, with a comparison to the end of 2022[43][44][45]