JinkoSolar(JKS) - 2022 Q4 - Annual Report

First Quarter 2023 Overview Business Highlights JinkoSolar saw strong Q1 2023 module demand, achieving over 60% YoY shipment growth and advancing N-type technology - Polysilicon price decline stimulated module demand in Q1 2023[2] - Quarterly module shipments increased by more than 60% year-over-year, with shipments to the Chinese market increasing by over 2 times year-over-year[2] - N-type module shipments were approximately 6 GW and retained a competitive premium over P-type modules[2] - Mass production efficiency of N-type TOPCon cells reached 25.3%[2] - Jiangxi Jinko issued RMB10 billion in convertible bonds to support capacity expansion for advanced N-type technology[2] Operational and Financial Highlights JinkoSolar achieved robust Q1 2023 year-over-year growth in key operational and financial metrics, improving gross margin Q1 2023 Key Operational & Financial Metrics | Metric | Q1 2023 (RMB) | Q4 2022 (RMB) | Q1 2022 (RMB) | Sequential Change | Year-over-Year Change | | :-------------------------------- | :------------ | :------------ | :------------ | :---------------- | :-------------------- | | Quarterly Shipments (MW) | 14,490 | - | - | -12.8% | +72.7% | | Total Revenues | 23.33 billion | 30.00 billion | 14.76 billion | -22.2% | +58.0% | | Gross Profit | 4.04 billion | 4.21 billion | 2.23 billion | -4.0% | +81.5% | | Gross Margin | 17.3% | 14.0% | 15.1% | +3.3 pp | +2.2 pp | | Net Income Attributable to JKS | 788.7 million | 665.0 million | 28.9 million | +18.6% | +2629.0% | | Adjusted Net Income Attributable to JKS | 836.4 million | 267.8 million | 328.4 million | +212.3% | +154.7% | | Basic EPS (RMB) | 3.91 | 3.31 | 0.15 | +18.1% | +2506.7% | | Diluted EPS (RMB) | 3.74 | 1.25 | 0.15 | +199.2% | +2393.3% | Management Commentary Management noted strong Q1 2023 year-over-year growth, driven by N-type products and cost control, while investing in N-type R&D - Delivered year-over-year improvements in module shipments, total revenues, and gross margin[4] - Adjusted supply chain strategy to effectively control costs amidst polysilicon price volatility[4] - N-type products shipment ratio approached nearly 50% of total module shipments, contributing to profitability[4] - Profitability in Q1 remained under pressure from demurrage costs in the U.S. market, but measures are being taken to improve customs clearance and shipment efficiency[4] - Optimistic about global market demand and opportunities from new technology in 2023, with continued investment in R&D and advanced N-type capacity[5] Market Dynamics and Technology Advancement Global PV Market Trends Global PV demand remained strong in Q1 2023, with China's installations surging 154.8% YoY, anticipating further market stimulation - Growth in PV demand remained strong in Q1 2023 despite seasonal factors[5] - China's new PV installations reached 33.7 GWac, an increase of 154.8% year-over-year, making PV the second-largest power source in China[5] - Total overseas shipments of modules and cells from China reached US$13.1 billion in Q1, representing a 15.3% increase year-over-year[5] - Polysilicon supply shortages are expected to ease, and price declines will release large market demand[5] N-type Technology and Product Development JinkoSolar's 11 GW TOPCon cell capacity reached full production, with 182mm N-type TOPCon cell efficiency at 25.3%, and expects N-type cell capacity to exceed 70% by year-end - The second phase of 11 GW TOPCon cell capacity in Jianshan has reached full production[6] - Average mass-produced efficiency of 182 mm N-type TOPCon cells reached 25.3%[6] - Accumulated N-type module shipments exceeded 16 GW by the end of Q1 2023[8] - Launched the Second-Generation Tiger Neo panel family in January 2023, with module efficiencies up to 23.23%[8] - Expects mass-produced N-type cell efficiency to reach 25.8% by the end of 2023[8] - Expects N-type cell capacity to account for over 70% of total solar cell capacity by the end of 2023[9] Detailed Financial Results for Q1 2023 Total Revenues Total revenues in Q1 2023 were RMB23.33 billion, a 22.2% sequential decrease but a 58.0% year-over-year increase Total Revenues (RMB billions) | Period | Amount | Sequential Change | Year-over-Year Change | | :----- | :----- | :---------------- | :-------------------- | | Q1 2023 | 23.33 | -22.2% | +58.0% | | Q4 2022 | 30.00 | - | - | | Q1 2022 | 14.76 | - | - | - Sequential decrease mainly attributable to a decrease in solar module shipments[10] - Year-over-year increase mainly attributable to an increase in solar module shipments due to increasing global market demand[10] Gross Profit and Gross Margin Gross profit for Q1 2023 was RMB4.04 billion, with gross margin improving to 17.3% due to decreased polysilicon costs Gross Profit and Gross Margin | Metric | Q1 2023 | Q4 2022 | Q1 2022 | Sequential Change | Year-over-Year Change | | :----------- | :------ | :------ | :------ | :---------------- | :-------------------- | | Gross Profit (RMB billion) | 4.04 | 4.21 | 2.23 | -4.0% | +81.5% | | Gross Margin | 17.3% | 14.0% | 15.1% | +3.3 pp | +2.2 pp | - Sequential and year-over-year increases in gross margin were mainly due to a decrease in the cost of polysilicon[10] Operating Income and Expenses Income from operations significantly increased to RMB1.21 billion in Q1 2023, with operating profit margin rising to 5.2%, despite increased operating expenses year-over-year Operating Income and Margin | Metric | Q1 2023 | Q4 2022 | Q1 2022 | Sequential Change | Year-over-Year Change | | :----------------------- | :------ | :------ | :------ | :---------------- | :-------------------- | | Income from Operations (RMB million) | 1,211.75 | 614.4 | 40.8 | +97.2% | +2870.0% | | Operating Profit Margin | 5.2% | 2.0% | 0.3% | +3.2 pp | +4.9 pp | Total Operating Expenses (RMB billion) | Period | Amount | Sequential Change | Year-over-Year Change | | :----- | :----- | :---------------- | :-------------------- | | Q1 2023 | 2.83 | -21.3% | +29.4% | | Q4 2022 | 3.59 | - | - | | Q1 2022 | 2.19 | - | - | - Sequential decrease in operating expenses mainly due to a decrease in shipping costs for solar modules and a decrease in impairment loss on property, plant and equipment[11] - Year-over-year increase in operating expenses mainly attributable to an increasing loss of disposal on property, plant and equipment and an increase in demurrage charges[11] Other Income and Expenses Jink