JinkoSolar(JKS) - 2023 Q3 - Quarterly Report

JinkoSolar Third Quarter 2023 Financial Results Third Quarter 2023 Business Highlights JinkoSolar achieved significant growth in Q3 2023, with module shipments up 107.9% year-over-year, driven by N-type technology and cumulative deliveries reaching 190 GW globally - Module shipments experienced substantial growth, increasing 20.4% sequentially and 107.9% year-over-year, driven by N-type technology and global operations[2] - The company became the first global module manufacturer to achieve 190 GW in cumulative solar module deliveries across over 190 countries[2] - N-type modules comprised over 60% of total shipments, maintaining a competitive premium, with N-type TOPCon cell mass production efficiency reaching 25.6%[2] Third Quarter 2023 Operational and Financial Highlights JinkoSolar reported strong Q3 2023 financial performance with total revenues of RMB 31.83 billion (+63.1% YoY) and gross margin improving to 19.3% Q3 2023 Key Financial and Operational Metrics | Metric | Q3 2023 | Q2 2023 | Q3 2022 | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Shipments (MW) | 22,597 | 18,612 (implied) | 10,853 (implied) | +108.2% | +21.4% | | Total Revenues (RMB Billion) | 31.83 | 30.69 | 19.52 | +63.1% | +3.7% | | Gross Profit (RMB Billion) | 6.13 | 4.78 | 3.07 | +99.7% | +28.2% | | Gross Margin | 19.3% | 15.6% | 15.7% | +3.6 percentage points | +3.7 percentage points | | Net Income (RMB Billion) | 1.32 | 1.31 | 0.55 | +140.0% | +0.8% | | Adjusted Net Income (RMB Billion) | 1.35 | 1.43 | 0.43 | +214.0% | -5.6% | | Diluted EPS (RMB) | 4.61 | 5.55 | 1.60 | +188.1% | -16.9% | CEO Commentary CEO Xiande Li attributed strong Q3 results to N-type TOPCon technology leadership and global operations, driving significant growth despite market volatility - The CEO highlighted significant year-over-year increases in module shipments (+107.9%), net income (+140.7%), and gross margin (from 15.7% to 19.3%), driven by N-type TOPCon technology and global network advantages despite market volatility[4] - The company expresses confidence in navigating industry competition and cyclical volatility by leveraging its global sales, operational capabilities, and continuous R&D for competitive advantage[5] - The company believes TOPCon technology will remain the mainstream technical path for the next 3-5 years, leading the industry in power output, cost efficiency, and product competitiveness[7] - Full-year module shipments are projected to exceed the 70-75 GW guidance, with N-type modules comprising approximately 60% of the total[8] Detailed Financial Results Total Revenues Total revenues for Q3 2023 reached RMB 31.83 billion (US$4.36 billion), increasing 63.1% year-over-year due to higher solar module shipments Revenue Performance (RMB billions) | Period | Revenue (RMB Billion) | Sequential Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Q3 2023 | 31.83 | +3.7% | +63.1% | | Q2 2023 | 30.69 | - | - | | Q3 2022 | 19.52 | - | - | Gross Profit and Gross Margin Gross profit in Q3 2023 significantly increased to RMB 6.13 billion, with gross margin improving to 19.3% due to decreased raw material costs Gross Profit and Margin Performance | Metric | Q3 2023 | Q2 2023 | Q3 2022 | | :--- | :--- | :--- | :--- | | Gross Profit (RMB Billion) | 6.13 | 4.78 | 3.07 | | Gross Margin | 19.3% | 15.6% | 15.7% | Income from Operations and Operating Margin Income from operations for Q3 2023 rose substantially to RMB 2.99 billion, expanding the operating margin to 9.4% due to higher revenues and gross margin Operating Income and Margin Performance | Metric | Q3 2023 | Q2 2023 | Q3 2022 | | :--- | :--- | :--- | :--- | | Income from Operations (RMB Billion) | 2.99 | 1.54 | 0.063 | | Operating Margin | 9.4% | 5.0% | 0.3% | Net Income and Earnings per Share Net income attributable to shareholders in Q3 2023 was RMB 1.32 billion (US$181.4 million), a significant increase from Q3 2022 Net Income and EPS Performance | Metric | Q3 2023 | Q2 2023 | Q3 2022 | | :--- | :--- | :--- | :--- | | Net Income (RMB Billion) | 1.32 | 1.31 | 0.55 | | Adjusted Net Income (RMB Billion) | 1.35 | 1.43 | 0.43 | | Diluted EPS (RMB) | 4.61 | 5.55 | 1.60 | | Diluted Earnings per ADS (USD) | 2.53 | 22.20 (RMB) | 6.39 (RMB) | Financial Position and Operational Highlights Financial Position As of September 30, 2023, the company reported RMB 14.11 billion in cash, RMB 25.78 billion in receivables, and reduced total interest-bearing debt to RMB 30.83 billion Key Balance Sheet Items (RMB billions) | Account | Sep 30, 2023 | Jun 30, 2023 | | :--- | :--- | :--- | | Cash & Cash Equivalents (RMB Billion) | 14.11 | 17.03 | | Accounts Receivables (RMB Billion) | 25.78 | 21.59 | | Inventories (RMB Billion) | 19.15 | 20.09 | | Total Interest-bearing Debts (RMB Billion) | 30.83 | 34.31 | Operational Highlights JinkoSolar's total shipments in Q3 2023 reached 22,597 MW, comprising 21,384 MW of solar modules and 1,213 MW of cells and wafers - Total shipments in Q3 2023 amounted to 22,597 MW, consisting of 21,384 MW of solar modules and 1,213 MW of cells and wafers[18] Business Outlook and Recent Developments Business Outlook JinkoSolar anticipates N-type module shipments to comprise 60% of total 2023 shipments, with N-type cell efficiency reaching 25.8% and overseas integrated capacity expanding to over 12 GW - N-type module shipments are expected to constitute approximately 60% of total module shipments in 2023[19] - Mass-produced N-type cell efficiency is projected to reach 25.8% by the end of 2023[19] - Overseas integrated capacity is planned to expand to over 12 GW by year-end 2023, with N-type production exceeding 75% of this capacity[20] Q4 and Full Year 2023 Guidance JinkoSolar anticipates Q4 2023 module shipments of approximately 23 GW and expects to exceed its full-year target of 70 to 75 GW Shipment Guidance | Period | Module Shipment Guidance | | :--- | :--- | | Q4 2023 | Approx. 23 GW | | Full Year 2023 | Exceeding 70 to 75 GW | Production Capacity Guidance By year-end 2023, JinkoSolar targets annual production capacity of 85.0 GW for mono wafers, 90.0 GW for solar cells, and 110.0 GW for solar modules End-of-2023 Production Capacity Targets | Product | Annual Capacity (GW) | | :--- | :--- | | Mono Wafer | 85.0 | | Solar Cell | 90.0 | | Solar Module | 110.0 | Recent Business Developments Recent developments include a 3.8 GW N-type module supply agreement with ACWA Power, a new N-type cell efficiency record of 26.89%, and a US$1.50 per ADS cash dividend declaration - Signed the largest ever supply agreement with ACWA Power for 3.8 GW of N-type Tiger Neo modules for two Saudi Arabian projects[21] - The board declared a cash dividend of US$0.375 per ordinary share, equivalent to US$1.50 per ADS[21] - Set a new world record for high-efficiency N-Type monocrystalline silicon solar cell with a maximum conversion efficiency of 26.89%[22] Financial Statements Unaudited Condensed Consolidated Statements of Operations The Q3 2023 unaudited condensed consolidated statement of operations shows total revenues of RMB 31.83 billion and net income attributable to shareholders of RMB 1.32 billion Statement of Operations Summary (RMB Thousand) | Line Item | Q3 2023 (RMB Thousand) | Q3 2022 (RMB Thousand) | | :--- | :--- | :--- | | Total revenues | 31,834,258 | 19,519,316 | | Gross profit | 6,133,211 | 3,071,667 | | Income from operations | 2,990,204 | 63,128 | | Net income | 2,324,576 | 797,633 | | Net income attributable to shareholders | 1,323,373 | 549,822 | Unaudited Condensed Consolidated Balance Sheets The unaudited consolidated balance sheet as of September 30, 2023, shows total assets of RMB 127.35 billion, total liabilities of RMB 94.26 billion, and total shareholders' equity of RMB 33.09 billion Balance Sheet Summary (RMB Thousand) | Account | Sep 30, 2023 (RMB Thousand) | Dec 31, 2022 (RMB Thousand) | | :--- | :--- | :--- | | Total current assets | 80,814,111 | 68,327,294 | | Total assets | 127,348,439 | 108,662,182 | | Total current liabilities | 73,325,829 | 64,936,186 | | Total liabilities | 94,258,027 | 81,658,289 | | Total shareholders' equity | 33,090,412 | 27,003,893 |