Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

JinkoSolar Holding Co. Ltd. (JKS - Snapshot Report) reported third quarter 2013 results with adjusted earnings per American Depositary Share (“ADS”) of $1.36 (adjusted earnings of 34 cents per share), much ahead of the Zacks Consensus Estimate of 35 cents. The company reversed its year-ago adjusted loss per ADS of $3.96 (adjusted loss 99 cents per share). Each “ADS” represents four ordinary shares.

The results reflect a diversified customer base and improvement in operational efficiency in a rapidly changing solar power environment.

Quarterly Performance

JinkoSolar’s revenues in the reported quarter were $320.7 million, beating the Zacks Consensus Estimate of $296.0 million. The top line increased 11.2% sequentially and 47.6% from the year-ago level.

The increase was mainly driven by a boost in shipments, improving average selling prices (ASPs) of solar modules and the increase in electricity revenues from solar projects.

Gross profit in the quarter was $71.5 million that corresponds to a gross margin of 22.3%. This compares favorably with the gross margin of 17.7% in the second quarter 2013 and 5.8% in the third quarter 2012. The significant improvement in the gross margin was backed by improving solar module ASPs and higher gross margins resulting from electricity revenues of solar projects. This was accompanied by continued cost reductions of polysilicon and auxiliary materials.

Total operating expenses in the quarter amounted to $31.6 million, up 24.1% sequentially and 2.3% year over year.

Shipments

Total shipments in the third quarter of 2013 were 518.9 megawatts (“MW”). This represents a 6.1% increase from 489.2 MW in the second quarter of 2013 and a significant 54.8% rise from 335.2 MW in the third quarter of 2012. Of the total shipments, 489.3 MW were solar modules, 10.9 MW were silicon wafers and 18.7 MW were solar cells.

Financial Condition

JinkoSolar at the end of the reported quarter had cash and cash equivalents and restricted cash of $218.7 million, up from $67.4 million at the end of Dec 31, 2012.

As of Sep 30, 2013, total short-term borrowings that included the current portion of long-term bank borrowings were $330.2 million compared with $360.4 million at the end of Dec 31, 2012. Total long-term borrowings were $62.6 million compared with $26.8 million at 2012 end.

Guidance

JinkoSolar expects cell and module shipments in the range of 500 MW and 530 MW for the fourth quarter of 2013. The company raised its total solar module shipment expectations to the range of 1.7 GW to 1.8 GW for 2013 from its prior forecast of 1.5 GW to 1.7 GW. By the end of full year 2013, the company expects total operational solar PV projects in the range of 210 MW to 230 MW.

Peer Comparison

Recently, solar cell manufacturer Canadian Solar Inc. (CSIQ - Analyst Report) reported earnings of 56 cents in the third quarter of 2013 versus a loss of $1.01 per share in the year-ago quarter. The strong performance in the reported quarter was driven by an increase in shipment volume and higher revenues. Canadian Solar swung into profit in the reported quarter on the back of higher shipments and revenues.

Our Take

Following six money-losing quarters, this was the second quarter of profit for JinkoSolar. The company has successfully broadened its geographic reach and expanded its downstream business, which has ensured net profitability for the entire year.

JinkoSolar’s string of large-scale solar photovoltaic (PV) supply orders from countries like Australia, South Africa and the U.K., effective project execution skills as well as favorable renewable policy adoption by the Chinese government have elevated its position in the market.

Its high-quality products at lower rates have attracted customers from around the globe. In addition, the company’s lofty backlog of domestic utility-scale projects along with a steady rebound in solar panel prices is expected to boost its margins. The 50% tax break on solar panel production by the Chinese government will unlock increased growth prospects for JinkoSolar Holdings.

Additionally, it has transformed its operations from a traditional manufacturer to a one-stop energy solution provider. Recently, the Chinese government increased its solar installation target for 2014 by 20% to 12 GW. This focus on renewable energy development in China will see heightened demand for both solar farms and distributed PV systems.

JinkoSolar presently holds a short-term Zacks Rank #3 (Hold). Other attractive solar PV operators are Zacks Ranked #2 (Buy) Enphase Energy, Inc. (ENPH - Snapshot Report) and First Solar Inc. (FSLR - Analyst Report).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%