JinkoSolar Announces Fourth Quarter and Full Year 2019 Financial Results
SHANGHAI, March 13, 2020 /PRNewswire/ -- JinkoSolar Holding Co., Ltd. ("JinkoSolar" or the "Company") (NYSE: JKS), one of the largest and most innovative solar module manufacturers in the world, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2019.
Strategic Business Updates
-- Technological transformation towards high-efficiency portfolio of
products now complete - mono wafer production capacity expected to be
fully ramped up to 18GW by April 2020.
-- Record high shipments, revenue and gross profit for both the fourth
quarter and full year 2019.
-- Technological transformation driving margin expansion - gross margin
during 2019 was 18.3% compared to 14.0% in 2018 and 11.3% in 2017.
-- High-efficiency mono shipments expected to account for close to 100% of
total shipments in 2020.
-- Industry leading integrated production cost structure driven by advanced
technology and lean production.
-- Best in-class product portfolio further accentuated by the successful
launch of in-house developed N-type cell and tiling ribbon module
technology.
-- Sale of two solar power plants with a combined capacity of 155MW in
Mexico expected to close by April 2020 which will deleverage balance
sheet by US$131.4 million.
-- Outbreak of COVID-19 not expected to have any material adverse impact on
operations; JinkoSolar reiterates full year 2020 shipment guidance and
capacity expansion plans.
Fourth Quarter 2019 Operational and Financial Highlights
-- Total solar module shipments were 4,538 megawatts ("MW"), within
JinkoSolar's updated guidance range of 4.5 GW to 4.6 GW; an increase of
36.4% from 3,326 MW in the third quarter of 2019 and 25.4% from 3,618 MW
in the fourth quarter of 2018.
-- Total revenues were RMB9.53 billion (US$1.37 billion), within
JinkoSolar's updated guidance range of US$1.35 billion to US$1.38
billion; an increase of 27.4% from the third quarter of 2019 and 23.4%
from the fourth quarter of 2018.
-- Gross margin was 18.2%, within JinkoSolar's updated guidance range of
18.0% to 20.0%, compared with 21.3% in the third quarter of 2019 and
14.7% in the fourth quarter of 2018. Excluding the Countervailing Duty
("CVD") and Anti-dumping Duty ("ADD") reversal benefits, gross margin
was 18.1% in the fourth quarter of 2019, 18.5% in the third quarter of
2019 and 13.8% in the fourth quarter of 2018.
-- Income from operations was RMB594.8 million (US$85.4 million), compared
with RMB638.8 million in the third quarter of 2019 and RMB237.4 million
in the fourth quarter of 2018.
-- Net income attributable to the Company's ordinary shareholders was
RMB369.5 million (US$53.1 million) in the fourth quarter of 2019,
compared with RMB363.6 million in the third quarter of 2019 and RMB114.8
million in the fourth quarter of 2018.
-- Diluted earnings per American depositary share ("ADS") were RMB6.68
(US$0.96) in the fourth quarter of 2019.
-- Non-GAAP net income attributable to the Company's ordinary shareholders
in the fourth quarter of 2019 was RMB432.2 million (US$62.1 million),
compared with RMB301.2 million in the third quarter of 2019 and RMB111.8
million in the fourth quarter of 2018.
-- Non-GAAP basic and diluted earnings per ADS were both RMB9.74 (US$1.40)
in the fourth quarter of 2019, compared with RMB6.83 and RMB6.13 in the
third quarter of 2019, respectively, and RMB2.84 for both in the fourth
quarter of 2018.
Full Year 2019 Operational and Financial Highlights
-- Total solar module shipments were 14.3 GW (including 64 MW to be used in
the Company's overseas downstream solar projects), within JinkoSolar's
updated guidance range of 14.3 GW to 14.4 GW, an increase of 25.6% from
11.4 GW for full year 2018.
-- Total revenues were RMB29.75 billion (US$4.27 billion), an increase of
18.8% from RMB25.04 billion for full year 2018.
-- Gross margin was 18.3%, compared with 14.0% for full year 2018. Gross
margin excluding CVD and ADD reversal benefits was 17.5%, compared with
13.2% for full year 2018.
-- Income from operations was RMB1.73 billion (US$248.4 million), compared
with RMB644.9 million for full year 2018. Income from operations
excluding CVD and ADD reversal benefits was RMB1.51 billion (US$217.0
million), compared with RMB435.5 million for full year 2018.
-- Net income attributable to the Company's ordinary shareholders was
RMB898.7 million (US$129.1 million), compared with RMB406.5 million for
full year 2018.
-- Diluted earnings per ADS was RMB19.40 (US$2.79), compared with RMB10.52
for full year 2018.
-- Non-GAAP net income attributable to the Company's ordinary shareholders
was RMB969.5 million (US$139.3 million), compared with RMB435.8 million
for full year 2018.
-- Non-GAAP basic and diluted earnings per ADS were both RMB22.90
(US$3.29), compared with RMB11.32 and RMB11.28 for full year 2018,
respectively.
Mr. Kangping Chen, JinkoSolar's Chief Executive Officer commented, "JinkoSolar's growth story continues to progress strongly and I couldn't be prouder of our very strong performance during the quarter in which solar module shipments, total revenue and gross profit all hit record highs. Module shipments during the quarter were 4,538 MW, an increase of 36% sequentially and 25% year-over-year. Total revenues during the quarter were US$1.37 billion, an increase of 27% sequentially and 23% year-over-year, while gross profit hit US$250 million. We are benefitting from the rapid expansion of our mono wafer production capacity during the second half of 2019 and our industry-leading integrated cost structure, which has ideally positioned us to drive growth throughout full year 2020 where we expect solar module shipments to increase by approximately 35%."
"2019 marked a significant milestone in our corporate history in which we successfully completed our transformation into the most competitive solar manufacturer in the world. The efficient execution of our strategy throughout the second half of the year allowed us to rapidly transition our operations and production facilities from poly to mono while steadily increasing the proportion of products produced through our fully integrated manufacturing process. This allowed us to rapidly begin mass production of our innovative solar products and distribute them to our growing customer base who are eager to benefit from the increased efficiency of our products. We also further refined our management processes to further optimize operational efficiency across our business and supply chain, which significantly reduced manufacturing costs."
"A number of emerging markets are flourishing with many of them approaching gigawatts levels, which we believe reflects the direction the market is headed with demand diversifying globally instead of concentrating in a few large markets. We believe global demand in 2020 will continue its strong growth momentum with newly added installations expected to reach 140GW to 150GW, an increase of around 20% year-over-year. New installations in Europe doubled in 2019 while ASPs in the U.S. remained high as a result of constrained supply. The subsidy in China for 2020 is finalized earlier in the year than was done last year which will allow more time for project development planning and installation and is expected to result in a higher overall completion rate. A number of projects from 2019 will likely be delayed into 2020 which we expect will result in total installations in China reaching 40GW to 50GW for full year 2020, an increase of about 50% year-over-year. With grid parity rapidly approaching in many markets, the long-term growth potential of the industry is rapidly opening up."
"The outbreak of COVID-19 across China affected certain raw materials supply and logistics during the first quarter of 2020, causing some module shipments be postponed to the second quarter of 2020. In response to the outbreak, we implemented a number of initiatives to ensure business continuity, including ensuring the safety and health of our employees and minimizing the impact of the outbreak on production and delivery by stocking up on critical raw materials and optimizing production and logistics. Our supply chain and logistics were temporarily affected by the outbreak early in the first quarter of 2020 but has improved significantly. Our current capacity utilization rate has already recovered to 100%. We estimate that approximately 400 MW to 500MW of our solar module shipments in the first quarter will be postponed to the second quarter, causing shipments in the second quarter to increase significantly. We believe our shipments and capacity expansion plans for the full year 2020 will not be impacted by the outbreak."
"The competitiveness of products in the market today is driven by the technologies they incorporate. We increased our investments into R&D in 2019 which resulted in our products breaking world records of cell efficiency and module output twice in June 2019 and once in January 2020. We believe our ability to consistently drive technological breakthroughs coupled with our expanding production capacity for high efficiency products will continue to drive down manufacturing costs."
Fourth Quarter 2019 Financial Results
Total Revenues
Total revenues in the fourth quarter of 2019 were RMB9.53 billion (US$1.37 billion), an increase of 27.4% from RMB7.48 billion in the third quarter of 2019 and an increase of 23.4% from RMB7.72 billion in the fourth quarter of 2018. The sequential increase was mainly attributable to an increase in the shipment of solar modules, which was partially offset by a decline in the average selling price of solar modules. The year-over-year increase was mainly attributable to an increase in the shipment of solar modules.
Gross Profit and Gross Margin
Gross profit in the fourth quarter of 2019 was RMB1.73 billion (US$248.5 million), compared with RMB1.59 billion in the third quarter of 2019 and RMB1.13 billion in the fourth quarter of 2018. The sequential increase was mainly attributable to an increase in the shipment of solar modules. The year-over-year increase was mainly attributable to (i) an increase in the shipment of solar modules, (ii) an increase in self-produced production volume by increasing shift toward integrated mono-based high-efficiency products capacity, and (iii) the continued reduction of integrated production costs resulting from the Company's industry-leading integrated cost structure.
Gross margin was 18.2% in the fourth quarter of 2019, compared with 21.3% in the third quarter of 2019 and 14.7% in the fourth quarter of 2018. Excluding the CVD and ADD reversal benefit, gross margin was 18.1 % in the fourth quarter of 2019, compared with 18.5% in the third quarter of 2019 and 13.8% in the fourth quarter of 2018. Excluding the impact of CVD and ADD benefits, gross margin remained essentially flat sequentially. The year-over-year increase was mainly attributable to (i) an increase in self-produced production volume by increasing shift toward integrated mono-based high-efficiency products capacity, and (ii) the continued reduction of integrated production costs, resulting from the Company's industry-leading integrated cost structure.
Income from Operations and Operating Margin
Income from operations in the fourth quarter of 2019 was RMB594.8 million (US$85.4 million), compared with RMB638.8 million in the third quarter of 2019 and RMB237.4 million in the fourth quarter of 2018. Operating margin was 6.2% in the fourth quarter of 2019, compared with 8.5% in the third quarter of 2019 and 3.1% in the fourth quarter of 2018. Excluding the CVD and ADD reversal benefits, operating margin in the fourth quarter of 2019 was 6.2%, compared with 5.7% in the third quarter of 2019 and 2.2% in the fourth quarter of 2018.
Total operating expenses in the fourth quarter of 2019 were RMB1.13 billion (US$163.0 million), an increase of 18.8% from RMB955.0 million in the third quarter of 2019 and an increase of 26.8% from RMB895.1 million in the fourth quarter of 2018. The sequential and year-over-year increases were mainly due to an increase in shipping costs, bad-debt provision on accounts receivable, and impairment loss on property, plant and equipment as a result of the Company's technology transformation in the fourth quarter of 2019 with a total amount of RMB68.3 million.
Total operating expenses accounted for 11.9% of total revenues in the fourth quarter of 2019, compared to 12.8% in the third quarter of 2019 and 11.6% in the fourth quarter of 2018. The sequential decrease was primarily due to a decrease in shipping costs as a percentage of total revenue associated with a higher percentage of shipments to domestic market taking place in the fourth quarter of 2019.
Interest Expense, Net
Net interest expense in the fourth quarter of 2019 was RMB83.8 million (US$12.0 million), a decrease of 11.7% from RMB94.9 million in the third quarter of 2019 and an increase of 13.2% from RMB74.0 million in the fourth quarter of 2018. The sequential decrease was mainly due to a decrease in interest expense associated with discounted notes receivables in the fourth quarter of 2019. The year-over-year increase was mainly due to (i) an increase in borrowings, (ii) the cessation of interest capitalization on certain completed solar projects, and (iii) issuance of additional convertible senior notes in May 2019.
Exchange (Loss)/Gain and Change in Fair Value of Foreign Exchange Derivatives
The Company recorded a net exchange gain (including change in fair value of foreign exchange derivatives) of RMB77.9 million (US$11.2 million) in the fourth quarter of 2019, compared to a net exchange loss of RMB130.7 million in the third quarter of 2019 and a net exchange loss of RMB35.1 million in the fourth quarter of 2018. With the rapid increase in overseas orders, the Company increased its foreign currency hedge ratio to hedge against anticipated cash flow denominated in U.S. dollars over the next six months. The Company recorded a gain arising from foreign exchange forward contracts associated with the depreciation of the U.S. dollars against the RMB in the fourth quarter of 2019.
Change in Fair Value of Interest Rate Swap
The Company entered into Interest Rate Swap agreements with several banks for the purpose of reducing interest rate risk exposure associated with the Company's overseas solar power projects. The Company recorded a gain arising from change in fair value of interest rate swap of RMB24.5 million (US$3.5 million) in the fourth quarter of 2019, compared to a loss of RMB18.1 million in the third quarter of 2019. The gain was primarily due to an increase in long-term interest rates in the fourth quarter of 2019. The Company did not elect to use hedge accounting for any of its derivatives.
Change in Fair Value of Convertible Senior Notes and Call Option
The Company issued US$85.0 million of 4.5% convertible senior notes due 2024 (the "Notes") in May 2019 and has elected to measure the Notes at fair value. The Company recognized a loss from a change in fair value of the Notes of RMB152.7 million (US$21.9 million) in the fourth quarter of 2019, compared to a gain of RMB157.1 million in the third quarter of 2019. The change was primarily due to a significant increase in the Company's stock price in the fourth quarter of 2019.
Concurrent with the issuance of the Notes in May 2019, the Company entered into a call option transaction with an affiliate of Credit Suisse Securities (USA) LLC. The Company accounted for the call option transaction as freestanding derivative assets in its consolidated balance sheets, which is marked to market during each reporting period. The Company recorded a gain from a change in fair value of the call option of RMB85.6 million (US$12.3 million) in the fourth quarter of 2019, compared to a loss of RMB74.2 million in the third quarter of 2019. The change was primarily due to a significant increase in the Company's stock price in the fourth quarter of 2019.
Equity in Income/ (Loss) of Affiliated Companies
The Company indirectly holds a 20% equity interest in Sweihan PV Power Company P.J.S.C, a developer and operator of solar power projects in Dubai, and accounts for its investment using the equity method. The Company also holds a 30% equity interest in Jiangsu Jinko-Tiansheng Co., Ltd, which processes and assembles PV modules as an OEM manufacturer, and accounts for its investments using the equity method. The Company recorded equity in income of affiliated companies of RMB31.8 million (US$4.6 million) in the fourth quarter of 2019, compared with a loss of RMB28.3 million in the third quarter of 2019 and a loss of RMB25.1 million in the fourth quarter of 2018. The gain primarily arose from change in fair value of interest rate swap agreements purchased by Sweihan PV Power Company P.J.S.C. due to an increase in long-term interest rates in the fourth quarter of 2019. Hedge accounting was not applied for the derivative.
Income Tax Benefit / (Expense), Net
The Company recorded an income tax expense of RMB221.0 million (US$31.7 million) in the fourth quarter of 2019, compared with an income tax expense of RMB117.2 million in the third quarter of 2019 and an income tax benefit of RMB43.5 million in the fourth quarter of 2018. The increase was mainly because (i) a JinkoSolar's subsidiary turned a profit in 2019 and utilized corresponding deferred tax assets recognized for tax loss carryforward, and (ii) JinkoSolar's subsidiaries in U.S. with higher income tax rate generated higher profits in the fourth quarter of 2019.
Net Income and Earnings per Share
Net income attributable to the Company's ordinary shareholders was RMB369.5 million (US$53.1 million) in the fourth quarter of 2019, compared with RMB363.6 million in the third quarter of 2019 and RMB114.8 million in the fourth quarter of 2018.
Basic and diluted earnings per ordinary share were RMB2.08 (US$0.30) and RMB1.67 (US$0.24), respectively, during the fourth quarter of 2019. This translates into basic and diluted earnings per ADS of RMB8.32 (US$1.20) and RMB6.68 (US$0.96), respectively.
Non-GAAP net income attributable to the Company's ordinary shareholders in the fourth quarter of 2019 was RMB432.2 million (US$62.1 million), compared with RMB301.2 million in the third quarter of 2019 and RMB111.8 million in the fourth quarter of 2018.
Non-GAAP basic and diluted earnings per ordinary share were both RMB2.43 (US$0.35), during the fourth quarter of 2019. This translates into non-GAAP basic and diluted earnings per ADS of RMB9.74 (US$1.40).
Financial Position
As of December 31, 2019, the Company had RMB6.23 billion (US$894.9 million) in cash and cash equivalents and restricted cash, compared with RMB3.48 billion as of December 31, 2018.
As of December 31, 2019, the Company's accounts receivables due from third parties were RMB5.27 billion (US$756.5 million), compared with RMB5.44 billion as of December 31, 2018.
As of December 31, 2019, the Company's inventories were RMB5.82 billion (US$835.8 million), compared with RMB5.74 billion as of December 31, 2018.
Receivables related to CVD and ADD reversal benefits that amounted to RMB427.8 million (US$61.5 million) were recorded as non-current assets under the line item "Other assets - third parties" on the Company's balance sheet as of December 31, 2019 based on the Company's latest best estimate of related cash collection.
As of December 31, 2019, the Company's total interest-bearing debts were RMB13.41 billion (US$1.93 billion), of which RMB2.05 billion (US$294.1 million) was related to the Company's overseas downstream solar projects, compared with RMB9.71 billion, of which RMB1.78 billion was related to the Company's overseas downstream solar projects as of December 31, 2018. The increase of interest-bearing debts was mainly due to (i) the issuance of additional convertible senior notes, and (ii) an increase in borrowings.
In November 2019, the Company entered into an agreement to sell two solar power plants in Mexico with a combined capacity of 155 MW to White River Renewables, a Mexican renewable energy company. White River Renewables is jointly sponsored by Riverstone Holdings, an energy and power-focused private investment firm, and White Summit Capital, a Switzerland-based infrastructure investments and asset management firm. The final closing of the transaction is expected to be completed by April 2020. The sale of overseas power plants is consistent with the Company's growth strategy to focus on its solar manufacturing business.
Assets and liabilities related to these two solar power plants were reclassified as assets/liabilities held for sale as of December 31, 2019. The Company's balance sheet will be further strengthened by reducing RMB915.2 million (US$131.5 million) of interest-bearing debts once the transaction is completed.
Full Year 2019 Financial Results
Total Revenues
Total revenues for full year 2019 were RMB29.75 billion (US$4.27 billion), an increase of 18.8% from RMB25.04 billion for full year 2018. The increase in total revenues was mainly attributable to an increase in the shipment of solar modules, which was partially offset by a decline in the average selling price of solar modules.
Gross Profit and Gross Margin
Gross profit for full year 2019 was RMB5.43 billion (US$780.2 million), an increase of 54.6% from RMB3.51 billion for full year 2018. Gross margin was 18.3% for full year 2019, compared with 14.0% for full year 2018. The year-over-year increase was mainly attributable to (i) an increase in the shipment of solar modules in 2019, which was partially offset by a decline in the average selling price of solar modules, (ii) an increase in self-produced production volume by increasing shift toward integrated mono-based high-efficiency products capacity, and (iii) the continued reduction of integrated production costs resulting from the Company's industry-leading integrated cost structure.
Excluding the CVD and ADD reversal benefits, gross margin was 17.5% for full year 2019, compared with 13.2% for full year 2018. The year-over-year increase was attributable to a decrease in solar module cost, which was partially offset by a decline in the average selling price of solar modules.
Income from Operations and Operating Margin
Income from operations for full year 2019 was RMB1.73 billion (US$248.4 million), compared with RMB644.9 million for full year 2018. Operating margin for full year 2019 was 5.8%, compared with 2.6% for full year 2018.
Total operating expenses for full year 2019 were RMB3.70 billion (US$531.8 million), an increase of 29.0% from RMB2.87 billion for full year 2018. As a percentage of total revenues, operating expenses accounted for 12.4% for full year 2019, compared with 11.5% for full year 2018. The increase in total operating expenses was primarily due to an increase in shipping cost, bad-debt provision on accounts receivable and impairment loss on property, plant and equipment as a result of the Company's technology transformation in the fourth quarter of 2019 with a total amount of RMB68.3 million.
Interest Expense, Net
Net interest expense for full year 2019 was RMB391.6 million (US$56.2 million), an increase of 32.4% from RMB295.7 million for full year 2018. The increase was mainly due to (i) an increase in borrowings, (ii) the cessation of interest capitalization on certain completed solar projects, and (iii) the issuance of additional convertible senior notes in May 2019.
Exchange Loss and Change in Fair Value of Foreign Exchange Derivatives
The Company recorded a net exchange loss (including change in fair value of foreign exchange derivatives) of RMB69.8 million (US$10.0 million) for full year 2019 due primarily to appreciation of US dollars against RMB. The Company recorded a net exchange loss of RMB20.1 million for full year 2018. With the rapid increase in overseas orders, the Company increased its foreign currency hedge ratio to hedge against anticipated cash flow denominated in U.S. dollars over the next six months. The Company recorded a loss arising from foreign exchange forward contracts with the appreciation of the U.S. dollars against the RMB for full year 2019.
Change in Fair Value of Interest Rate Swap
The Company entered into Interest Rate Swap agreements with several banks for the purpose of reducing interest rate risk exposure. The Company recorded a loss of RMB70.0 million (US$10.1 million) arising from change in fair value of the Interest Rate Swap agreements, compared to a gain of RMB9.7 million for full year 2018. The year-over-year changes were primarily due to a decrease in USD LIBOR rates. The Company did not elect to use hedge accounting for any of its derivatives.
Change in Fair Value of Convertible Senior Notes and Call Option
The Company issued the Notes in May 2019 and has elected to measure them at fair value. The Company recognized a loss from a change in fair value of the Notes of RMB114.1 million (US$16.4 million) for full year 2019. The change was primarily due to a significant increase in the Company's stock price in 2019.
Concurrent with the issuance of the Notes in May 2019, the Company entered into a call option transaction with an affiliate of Credit Suisse Securities (USA) LLC. The Company accounted for the call option transaction as freestanding derivative assets in its consolidated balance sheets, which is marked to market at each reporting period. The Company recorded a gain from a change in fair value of the call option of RMB84.8 million (US$12.2 million) for full year 2019. The change was primarily due to a significant increase in the Company's stock price in 2019.
Equity in (Loss)/Income of Affiliated Companies
The Company indirectly holds a 20% equity interest of Sweihan PV Power Company P.J.S.C, a developer and operator of solar power projects in Dubai, and accounts for its investments using the equity method. The Company also holds a 30% equity interest in Jiangsu Jinko-Tiansheng Co., Ltd, which processes and assembles PV modules as an OEM manufacturer, and accounts for its investments using the equity method. The Company recorded equity in loss of affiliated companies of RMB48.9 million (US$7.0 million) for full year 2019, compared with an income of RMB2.6 million in 2018. The loss primarily arose from change in fair value of interest rate swap agreements purchased by Sweihan PV Power Company P.J.S.C. due to a continuous decrease in USD LIBOR rates. Hedge accounting was not applied for the derivative.
Income Tax Expense, Net
The Company recognized an income tax expense of RMB278.0 million (US$39.9 million) for full year 2019, compared with an income tax expense of RMB4.4 million in full year 2018. The increase was mainly because (i) JinkoSolar's subsidiary turned a profit in 2019 and utilized corresponding deferred tax assets recognized for tax loss carryforward, and (ii) JinkoSolar's subsidiary in U.S. with higher income tax rate generated higher profits in 2019.
Net Income and Earnings per Share
Net income attributable to the Company's ordinary shareholders for full year 2019 was RMB898.7 million (US$129.1 million), compared with a net income of RMB406.5 million in full year 2018.
Basic and diluted earnings per share for full year 2019 were RMB5.31 (US$0.76) and RMB 4.85 (US$0.70), respectively. This translates into basic and diluted earnings per ADS of RMB21.22 (US$3.05) and RMB19.40 (US$2.79), respectively.
Non-GAAP net income for full year 2019 was RMB969.5 million (US$139.3 million), compared with non-GAAP net income of RMB435.8 million in full year 2018.
Non-GAAP basic and diluted earnings per share for full year 2019 were both RMB5.73 (US$0.82), which translates into non-GAAP basic and diluted earnings per ADS of both RMB22.90 (US$3.29).
Fourth Quarter and Full Year 2019 Operational Highlights
Solar Module Shipments
Total solar module shipments in the fourth quarter of 2019 were 4,538 MW.
Total solar module shipments in full year 2019 were 14.3 GW (including 64 MW to be used in the Company's overseas downstream solar projects), compared to 11.4 GW in 2018.
Solar Products Production Capacity
As of December 31, 2019, the Company's in-house annual mono wafer, solar cell and solar module production capacity was 11.5 GW([1]), 10.6 GW (9.8 GW for PERC cells and 800 MW for N type cells) and 16 GW, respectively.
[1] In addition to the mono
wafer, our multi wafer
production capacity was
3.5 GW as of December 31,
2019.
Operations and Business Outlook
Outbreak of COVID-19 not expected to have any material adverse impact on operations; JinkoSolar reiterates full year 2020 shipment guidance and capacity expansion plans.
First Quarter and Full Year 2020 Guidance
The Company's business outlook is based on management's current views and estimates with respect to market conditions, production capacity, the Company's order book and the global economic environment. This outlook is subject to uncertainty on final customer demand and sale schedules. Management's views and estimates are subject to change without notice.
For the first quarter of 2020, the Company expects total solar module shipments to be in the range of 3.4 GW to 3.7 GW. Total revenue for the first quarter is expected to be in the range of US$1.00 billion to US$1.08 billion. Gross margin for the first quarter is expected to be between 19% and 21%.
For full year 2020, the Company estimates total solar module shipments to be in the range of 18 GW to 20 GW.
Solar Products Production Capacity
JinkoSolar expects its annual mono wafer, solar cell and solar module production capacity to reach 19.0 GW, 11.0 GW (including 900 MW N-type cells) and 25.0 GW, respectively, by the end of 2020.
Recent Business Developments
-- In November 2019, JinkoSolar delivered to X-ELIO, a leading company
dedicated to the development, construction and operation of photovoltaic
plants, 950 MW of its ultra-high efficiency Cheetah 72 cells solar
modules to be installed at different projects across Spain and Mexico.
-- In November 2019, JinkoSolar supplied 300MW of its high energy density
Tiger panels for an ultra-high voltage demonstration plant in Qinghai
Province, China.
-- In December 2019, JinkoSolar supplied approximately 40 MW of its
ultra-high efficiency Cheetah HC 60 solar modules to Obton, one of the
leading global developers and investors of photovoltaic solar energy.
-- In December 2019, JinkoSolar signed an agreement with COSCO SHIPPING
Lines (Greece) S.A. to use the Greek Port of Piraeus as a distribution
hub for the shipment of its renewable energy products in Europe, and in
particular for Greece, the Balkans and the EMEA region.
-- In January 2020, JinkoSolar signed an MOU with Shanghai Institute of
Space Power-Sources (SISP) to co-develop high efficiency solar cell
technology for both space and terrestrial applications.
-- In January 2020, the maximum conversion efficiency of JinkoSolar's
bifacial solar modules reached 22.49%, breaking the previous world
record and setting a new industry standard for efficiency of mass
produced solar cells.
-- In January 2020, Dr. Hao Jin was appointed as the Chief Technology
Officer of JinkoSolar.
Conference Call Information
JinkoSolar's management will host an earnings conference call on Friday, March 13, 2020 at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong the same day).
Dial-in details for the earnings conference call are as follows:
Hong Kong / International:
+852 3027 6500
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U.S. Toll Free:
+1 855-824-5644
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Passcode:
23485667#
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Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call.
A telephone replay of the call will be available 2 hours after the conclusion of the conference call through 23:59 U.S. Eastern Time, March 20, 2020. The dial-in details for the replay are as follows:
International:
+61 2 8325 2405
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U.S.:
+1 646 982 0473
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Passcode:
319329639#
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Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of JinkoSolar's website at www.jinkosolar.com.
About JinkoSolar Holding Co., Ltd.
JinkoSolar (NYSE: JKS) is one of the largest and most innovative solar module manufacturers in the world. JinkoSolar distributes its solar products and sells its solutions and services to a diversified international utility, commercial and residential customer base in China, the United States, Japan, Germany, the United Kingdom, Chile, South Africa, India, Mexico, Brazil, the United Arab Emirates, Italy, Spain, France, Belgium, and other countries and regions. JinkoSolar has built a vertically integrated solar product value chain, with an integrated annual capacity of 11.5 GW for mono wafers, 10.6 GW for solar cells, and 16 GW for solar modules, as of December 31, 2019.
JinkoSolar has over 15,000 employees across its 7 productions facilities globally, 14 overseas subsidiaries in Japan, South Korea, Vietnam, India, Turkey, Germany, Italy, Switzerland, United States, Mexico, Brazil, Chile and Australia, and global sales teams in China, United Kingdom, France, Spain, Bulgaria, Greece, Ukraine, Jordan, Saudi Arabia, Tunisia, Morocco, Kenya, South Africa, Costa Rica, Colombia, Panama, Kazakhstan, Malaysia, Myanmar, Sri Lanka, Thailand, Vietnam, Poland and Argentina.
To find out more, please see: www.jinkosolar.com
Use of Non-GAAP Financial Measures
To supplement its consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), JinkoSolar uses certain non-GAAP financial measures including, non-GAAP net income, non-GAAP earnings per Share, and non-GAAP earnings per ADS, which are adjusted from the comparable GAAP results to exclude certain expenses or incremental ordinary shares relating to share-based compensation and, convertible senior notes:
-- Non-GAAP net income is adjusted to exclude the expenses relating to
issuance cost of convertible senior notes, change in fair value of
convertible senior notes and call option, interest expenses of
convertible senior notes, exchange gain on the convertible senior notes,
and stock-based compensation; given these Non-GAAP net income
adjustments above are either related to the Company or its subsidiaries
incorporated in Cayman Islands, which are not subject to tax exposures,
or related to those subsidiaries with tax loss positions which result in
no tax impacts, therefore no tax adjustment is needed in conjunction
with these Non-GAAP net income adjustments; and
-- Non-GAAP earnings per Share and non-GAAP earnings per ADS are adjusted
to exclude the expenses relating to issuance cost of convertible senior
notes, change in fair value of convertible senior notes and call option,
interest expenses of convertible senior notes and call option, exchange
gain on the convertible senior notes and call option, and stock-based
compensation.
The Company believes that the use of non-GAAP information is useful for analysts and investors to evaluate JinkoSolar's current and future performances based on a more meaningful comparison of net income and diluted net income per ADS when compared with its peers and historical results from prior periods. These measures are not intended to represent or substitute numbers as measured under GAAP. The submission of non-GAAP numbers is voluntary and should be reviewed together with GAAP results.
Currency Convenience Translation
The conversion of Renminbi into U.S. dollars in this release, made solely for the convenience of the readers, is based on the noon buying rate in the city of New York for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York as of December 31, 2019, which was RMB6.9618 to US$1.00. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized, or settled into U.S. dollars at that rate or any other rate. The percentages stated in this press release are calculated based on Renminbi.
Safe-Harbor Statement
This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends, "plans," "believes," "estimates" and similar statements. Among other things, the quotations from management in this press release and the Company's operations and business outlook, contain forward-looking statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks is included in JinkoSolar's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. Except as required by law, the Company does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
For investor and media inquiries, please contact:
In China:
Ripple Zhang
JinkoSolar Holding Co., Ltd.
Tel: +86 21-5183-3105
Email: ir@jinkosolar.com
Christian Arnell
Christensen
Tel: +86-10-5900-2940
Email: carnell@christensenir.com
In the U.S.:
Ms. Linda Bergkamp
Christensen
Tel: +1-480-614-3004
Email: lbergkamp@ChristensenIR.com
JINKOSOLAR HOLDING CO., LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except ADS and Share data)
2018 2019
RMB
RMB
USD
Revenues from third parties 23,586,834 29,592,010 4,250,626
Revenues from related parties 1,455,779 154,278 22,161
Total revenues 25,042,613 29,746,288 4,272,787
Cost of revenues (21,528,868) (24,314,602) (3,492,574)
Gross profit 3,513,745 5,431,686 780,213
Operating expenses:
Selling and marketing (1,708,270) (2,250,336) (323,241)
General and administrative (779,423) (1,059,025) (152,120)
Research and development (366,577) (324,435) (46,602)
Impairment of long-lived assets (14,548) (68,262) (9,805)
Total operating expenses (2,868,818) (3,702,058) (531,768)
Income from operations 644,927 1,729,628 248,445
Interest expenses, net (295,692) (391,582) (56,247)
Subsidy income 52,176 63,017 9,053
Exchange gain 33,681 8,809 1,265
Change in fair value of interest rate swap 9,701 (69,974) (10,051)
Change in fair value of foreign exchange derivatives (53,810) (78,615) (11,292)
Convertible senior notes issuance costs - (18,646) (2,678)
Change in fair value of convertible senior notes and call option - (29,257) (4,203)
Other income, net 25,817 17,873 2,567
Gain/(Loss) from disposal of subsidiaries (9,425) 19,935 2,863
Income before income taxes 407,375 1,251,188 179,722
Income tax expense (4,411) (277,979) (39,929)
Equity in (loss)/gain of affiliated companies 2,610 (48,855) (7,018)
Net income 405,574 924,354 132,775
Less: Net income/(loss) attributable to non-controlling (903) 25,690 3,690
interests
Net income attributable to JinkoSolar 406,477 898,664 129,085
Holding Co., Ltd.'s ordinary shareholders
Net income attributable to JinkoSolar Holding Co., Ltd.'s
ordinary shareholders per share:
Basic 2.64 5.31 0.76
Diluted 2.63 4.85 0.70
Net income attributable to JinkoSolar Holding Co., Ltd.'s
ordinary shareholders per ADS:
Basic 10.56 21.22 3.05
Diluted 10.52 19.40 2.79
Weighted average ordinary shares outstanding:
Basic 153,806,379 169,363,306 169,363,306
Diluted 154,704,166 166,567,757 166,567,757
Weighted average ADS outstanding:
Basic 38,451,595 42,340,827 42,340,827
Diluted 38,676,041 41,641,939 41,641,939
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Net income 405,574 924,354 132,775
Other comprehensive income:
-Foreign currency translation adjustments 47,005 13,741 1,974
-Change in the instrument-specific credit risk - (21,090) (3,029)
---
Comprehensive income 452,579 917,005 131,720
Less: Comprehensive income/(loss) attributable to non-controlling (903) 25,690 3,690
interests
Comprehensive income attributable to JinkoSolar Holding Co., Ltd.'s 453,482 891,315 128,030
ordinary shareholders
Reconciliation of GAAP and non-GAAP Results
1. Non-GAAP earnings per share and non-GAAP earnings per ADS
GAAP net income attributable to ordinary shareholders 406,477 898,664 129,085
Convertible senior notes issuance costs - 18,646 2,678
Change in fair value of convertible senior notes and call option - 29,257 4,203
Net interest expenses of convertible senior notes and call option 3 15,384 2,210
Exchange loss on convertible senior notes and call option 4 3,002 431
Stock-based compensation expense 29,308 4,578 658
Non-GAAP net income attributable to ordinary shareholders 435,792 969,531 139,265
Non-GAAP earnings per share attributable to ordinary shareholders -
Basic 2.83 5.73 0.82
Diluted 2.82 5.73 0.82
Non-GAAP earnings per ADS attributable to ordinary shareholders -
Basic 11.32 22.90 3.29
Diluted 11.28 22.90 3.29
Non-GAAP weighted average ordinary shares outstanding
Basic 153,806,379 169,363,306 169,363,306
Diluted 154,704,166 169,363,306 169,363,306
Non-GAAP weighted average ADS outstanding
Basic 38,451,595 42,340,827 42,340,827
Diluted 38,676,041 42,340,827 42,340,827
JINKOSOLAR HOLDING CO., LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except ADS and Share data)
For the quarter ended
December 31, 2018
September 30, 2019 December 31, 2019
---
RMB
RMB
RMB
USD
Revenues from third parties 7,695,214 7,473,562 9,528,920 1,368,744
Revenues from related parties 25,118 8,194 538 77
Total revenues 7,720,332 7,481,756 9,529,458 1,368,821
Cost of revenues (6,587,907) (5,888,015) (7,799,733) (1,120,362)
Gross profit 1,132,425 1,593,741 1,729,725 248,459
Operating expenses:
Selling and marketing (551,658) (596,192) (632,871) (90,906)
General and administrative (249,221) (276,699) (342,048) (49,132)
Research and development (94,183) (82,059) (91,740) (13,178)
Impairment of long-lived assets - (68,262) (9,805)
---
Total operating expenses (895,062) (954,950) (1,134,921) (163,021)
Income from operations 237,363 638,791 594,804 85,438
Interest expenses, net (74,047) (94,892) (83,826) (12,041)
Subsidy income 8,234 33,394 14,366 2,064
Exchange (loss)/gain (36,006) 16,304 (14,003) (2,011)
Change in fair value of interest rate swap (38,467) (18,123) 24,466 3,514
Change in fair value of foreign exchange derivatives 950 (146,998) 91,889 13,199
Change in fair value of convertible senior notes and call option - 82,932 (67,119) (9,641)
Other income/(expense), net (2,287) 1,742 1,432 206
Gain on disposal of subsidiaries - 19,935 2,863
Income before income taxes 95,740 513,150 581,944 83,591
Income tax (expense)/benefit 43,451 (117,152) (220,993) (31,744)
Equity in gain/(loss) of affiliated companies (25,090) (28,305) 31,780 4,565
Net income 114,101 367,693 392,731 56,412
Less: Net income/(loss) attributable to non-controlling (712) 4,129 23,225 3,336
interests
Net income attributable to JinkoSolar 114,813 363,564 369,506 53,076
Holding Co., Ltd.'s ordinary shareholders
Net income attributable to JinkoSolar Holding Co., Ltd.'s
ordinary shareholders per share:
Basic 0.73 2.06 2.08 0.30
Diluted 0.73 1.17 1.67 0.24
Net income attributable to JinkoSolar Holding Co., Ltd.'s
ordinary shareholders per ADS:
Basic 2.92 8.25 8.32 1.20
Diluted 2.92 4.66 6.68 0.96
Weighted average ordinary shares outstanding:
Basic 156,855,085 176,336,307 177,524,685 177,524,685
Diluted 156,859,208 196,544,769 171,509,296 171,509,296
Weighted average ADS outstanding:
Basic 39,213,771 44,084,077 44,381,171 44,381,171
Diluted 39,214,802 49,136,192 42,877,324 42,877,324
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Net income 114,101 367,693 392,731 56,412
Other comprehensive income:
-Foreign currency translation adjustments 3,670 (666) (21,970) (3,156)
-Change in the instrument-specific credit risk - 5,546 (26,579) (3,818)
---
Comprehensive income 117,771 372,573 344,182 49,438
Less: Comprehensive income/(loss) attributable to non- (712) 4,129 23,225 3,336
controlling interests
Comprehensive income attributable to JinkoSolar Holding Co., 118,483 368,444 320,957 46,102
Ltd.'s ordinary shareholders
Reconciliation of GAAP and non-GAAP Results
1. Non-GAAP earnings per share and non-GAAP earnings per
ADS
GAAP net income attributable to ordinary shareholders 114,813 363,564 369,506 53,076
Convertible senior notes issuance costs -
Change in fair value of convertible senior notes and call option - (82,932) 67,119 9,641
Net interest expenses of convertible senior notes and call 1 6,190 6,281 902
option
Exchange (gain)/loss on convertible senior notes and call - 7,834 (4,112) (591)
option
Stock-based compensation (benefit)/expense (3,023) 6,546 (6,630) (952)
Non-GAAP net income attributable to ordinary shareholders 111,791 301,202 432,164 62,076
Non-GAAP earnings per share attributable to ordinary
shareholders -
Basic 0.71 1.71 2.43 0.35
Diluted 0.71 1.53 2.43 0.35
Non-GAAP earnings per ADS attributable to ordinary
shareholders -
Basic 2.84 6.83 9.74 1.40
Diluted 2.84 6.13 9.74 1.40
Non-GAAP weighted average ordinary shares outstanding
Basic 156,855,085 176,336,307 177,524,685 177,524,685
Diluted 156,859,208 196,544,769 177,524,685 177,524,685
Non-GAAP weighted average ADS outstanding
Basic 39,213,771 44,084,077 44,381,171 44,381,171
Diluted 39,214,802 49,136,192 44,381,171 44,381,171
JINKOSOLAR HOLDING CO., LTD.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, 2018 Dec 31, 2019
---
RMB
RMB
USD
ASSETS
Current assets:
Cash and cash equivalents 3,104,917 5,653,854 812,125
Restricted cash 377,111 576,546 82,816
Restricted short-term investments 4,058,419 6,930,502 995,504
Accounts receivable, net - related parties 675,768 520,504 74,766
Accounts receivable, net - third parties 5,436,371 5,266,351 756,464
Notes receivable, net - related parties - 18,629 2,676
Notes receivable, net - third parties 1,010,469 1,529,801 219,742
Advances to suppliers, net - third parties 665,221 2,522,373 362,316
Inventories, net 5,743,328 5,818,789 835,817
Forward contract receivables 1,192 52,281 7,510
Prepayments and other current assets - related 67,730 54,318 7,802
parties
Derviatvie assets 847 -
Prepayments and other current assets 1,712,889 1,573,482 226,016
Held-for-sale assets* - 1,170,818 168,177
Total current assets 22,854,262 31,688,248 4,551,731
Non-current assets:
Restricted cash 921,300 531,158 76,296
Project Assets 1,770,621 798,243 114,660
Long-term investments 25,531 278,021 39,935
Property, plant and equipment, net 8,275,900 10,208,205 1,466,317
Land use rights, net 574,945 597,922 85,886
Intangible assets, net 35,361 36,395 5,228
Financing lease right-of-use assets, net - 1,259,713 180,946
Operating lease right-of-use assets, net - 317,904 45,665
Deferred tax assets 338,069 271,286 38,968
Call Option-concurrent with issuance of convertible - 294,178 42,256
senior notes
Other assets - related parties 144,984 96,753 13,898
Other assets - third parties 912,210 1,466,692 210,677
Total non-current assets 12,998,921 16,156,470 2,320,732
Total assets 35,853,183 47,844,718 6,872,463
LIABILITIES
Current liabilities:
Accounts payable - related parties 698 36,310 5,217
Accounts payable - third parties 5,327,094 4,952,630 711,400
Notes payable - related parties 35,000 -
Notes payable - third parties 6,036,577 7,518,570 1,079,975
Accrued payroll and welfare expenses 810,921 879,465 126,327
Advances from related parties 910 749 108
Advances from third parties 2,395,229 4,350,380 624,893
Income tax payable 70,240 117,422 16,867
Other payables and accruals 2,281,025 3,055,928 438,955
Other payables due to related parties 20,819 13,127 1,886
Forward contract payables 9,464 3,857 554
Convertible senior notes - current 69 -
Financing lease liabilities - current - 227,613 32,694
Operating lease liabilities - current - 40,043 5,752
Derivative liability - current 12,786 -
Bond payable and accrued interests 10,318 -
Short-term borrowings from third parties, 7,103,399 9,047,250 1,299,556
including current portion of long-term bank
borrowings
Guarantee liabilities to related parties 26,639 25,688 3,690
Held-for-sale liabilities* - 1,008,196 144,818
Total current liabilities 24,141,188 31,277,228 4,492,692
Non-current liabilities:
Long-term borrowings 1,954,831 1,586,187 227,842
Convertible senior notes - 728,216 104,602
Long-term payables 338,412 -
Bond payables 299,475 -
Accrued warranty costs - non current 573,641 651,968 93,649
Financing lease liabilities* - 583,491 83,813
Operating lease liabilities* - 279,534 40,153
Deferred tax liability 25,893 250,734 36,016
Guarantee liabilities to related parties 65,765 46,332 6,655
- non current
Total non-current liabilities 3,258,017 4,126,462 592,730
Total liabilities 27,399,205 35,403,690 5,085,422
SHAREHOLDERS' EQUITY
Ordinary shares (US$0.00002 par value, 500,000,000 22 25 4
shares authorized, 158,587,937 and 180,653,497
shares issued as of December 31, 2018 and
December 31, 2019, respectively, 156,864,737 and
178,930,297 shares outstanding as of December 31,
2018 and December 31, 2019, respectively)
Additional paid-in capital 4,010,740 4,582,850 658,285
Statutory reserves 570,176 689,707 99,070
Accumulated other comprehensive income 70,301 62,952 9,041
Treasury stock, at cost; 1,723,200 ordinary shares as of (13,876) (13,876) (1,993)
December 31, 2018 and December 31, 2019
Accumulated retained earnings 3,202,528 3,981,661 571,930
Total JinkoSolar Holding Co., Ltd. shareholders' equity 7,839,891 9,303,319 1,336,337
Non-controlling interests 614,087 3,137,709 450,704
Total liabilities and shareholders' equity 35,853,183 47,844,718 6,872,463
Note: *In November, the Company entered into an agreement to sell two solar power plants in Mexico with
a combined capacity of 155 MW to White River Renewables, a Mexican renewable energy company.
Assets and liabilities related to these two solar power plants were reclassified as assets/liabilities held
for sale as of December 31, 2019.
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SOURCE JinkoSolar Holding Co., Ltd.
