JinkoSolar(JKS) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for the first quarter of 2025 was $1.91 billion, down 33% sequentially and down 40% year over year [21] - Net loss was approximately$ 100 million for the first quarter [7] - Gross margin decreased both sequentially and year over year, primarily due to a decrease in the average selling price (ASP) of solar modules [21] - Total operating expenses were $350 million, down 8% sequentially and down 18% year over year [22] - The asset liability ratio was approximately 74%, down from nearly 75% at the end of the first quarter last year [20] Business Line Data and Key Metrics Changes - Total shipments reached 19.1 gigawatts, with module shipments accounting for approximately 90% [13] - Shipments to overseas markets accounted for around 70%, with significant growth in the Indo Pacific and North Asia markets [14] - Shipments to the Indo Pacific market grew by nearly 10% year over year and 150% sequentially [14] - Shipments of energy storage systems (ESS) exceeded 300 megawatt hours, with expectations of around 6 gigawatt hours for the full year 2025 [11] Market Data and Key Metrics Changes - New installations in China in the first quarter amounted to 59.7 gigawatts, an increase of 31% year over year [7] - The global module demand is expected to remain about 700 gigawatts in 2025, with strong growth anticipated in Asia Pacific, Europe, and the Middle East [18] - The U.S. market is expected to see a wave of early purchases of cells and modules due to a shortage in local production capacity and the impact of reciprocal tariffs [18] Company Strategy and Development Direction - The company aims to maintain a leading position in the industry by optimizing market strategies and supply chain management while improving technology and product competitiveness [12] - The focus is on high-efficiency cell capacity and high-power products, with expectations of a competitive advantage in the market [10] - The company plans to explore innovative business models that integrate solar and storage solutions to provide high-efficiency and smart green energy solutions [12] Management's Comments on Operating Environment and Future Outlook - Management noted that the current market environment is challenging due to low prices across the solar supply chain and disruptions from international trade policies [7] - There is optimism about long-term demand in the U.S. market despite current uncertainties [18] - Management expects gross margins to improve slightly in the second quarter due to an upward trend in module prices driven by demand from China and other regions [34] Other Important Information - The company expects annual production capacity for mono wafers, solar cells, and solar modules to reach 120, 95, and 130 gigawatts, respectively, by the end of 2025 [12] - Confirmed orders for energy storage systems accounted for 50% to 60%, with another 20% to 30% showing strong potential for signing [11] Q&A Session Summary Question: Can you provide details on ESS shipments and sourcing of battery cells? - ESS shipments are mainly targeted at the Asia Pacific, Europe, and emerging markets, with challenges in extending the ESS business in the U.S. due to trade barriers [27] Question: What are the expectations for margins in Q2 and Q3? - Short-term expectations are for gross margins to improve slightly in Q2, with potential stabilization in the second half of the year [34] Question: What are the plans for U.S. cell manufacturing given the tariffs? - Local production in the U.S. is seen as a long-term trend, but current uncertainties make short-term plans difficult [38] Question: What is the expected gross margin for ESS? - The target gross margin for ESS is expected to be in the range of 5% to 10% [45] Question: What is the U.S. shipment target for this year? - The U.S. shipment target is approximately 5% to 10% of total shipments, with a low case of around 5% [50] Question: How does the company plan to manage shareholder returns? - The company plans to buy back shares and defer dividends, with an initial plan of at least$ 100 million for dividends and repurchases [56]