JinkoSolar’s Q1 FY21 Results. Key Highlights And Guidance For the Future

One of the largest solar module manufacturers from China,  JinkoSolar, announced a mixed set of  unaudited financial results for the first quarter ended March 31, 2021 (Q1 FY2021).

The company has received total revenues in the Q1 Fy2021 were RMB7.94 billion (USD 1.21 billion), a decrease of 15.7percent from RMB9.42 billion in the Q4 FY2020 and a decrease of 6.4 percent from RMB 8.48 billion in the Q1 FY2020. The sequential decrease was mainly attributable to a decrease in the shipment of solar modules partially offset by a rise in the average selling price of solar modules. The firm reported gross margins at 17.1 percent.

The firm’s gross profit in theQ1 FY2021 also corrected to RMB1.36 billion (USD 207.3 million), compared with RMB1.51 billion in the Q1 FY2020 and RMB1.66 billion in the first quarter of 2020. Along with the gross margin of 17.1 percent in the Q1 FY2021, compared with 16.0 percent in the Q4 FY2020 and 19.5 percent in the Q1 FY2020.

The company’s total operating expenses in the first quarter of 2021 were RMB1.21 billion (USD 184.6 million) with an increase of 30.9 percent from RMB924.2 million in the Q1 FY2020.

The year-over-year increase was mainly attributable to an increase of the impairment loss in the first quarter of 2021 on an overseas solar power project to be disposed of in the amount of RMB123.4 million based on the market quotation as a result of the Company’s non-compete commitment to JinkoPower Group to dispose of its existing solar power projects. And secondly, the reversal of a previous bad debt provision in the first quarter of 2020 upon cash receipt of RMB52.5 million (USD 7.4 million) based on final judgment for the lawsuits with Wuxi Zhongcai.

As of March 31, 2021, the Company had RMB7.04 billion (USD 1.07 billion) in cash and cash equivalents and restricted cash, compared with RMB8.07 billion as of December 31, 2020.

Notably, in Q1 FY2021, the company made total shipments of around 5,354 MW, including 4,562 MW for solar module shipments and 792 MW for cell and wafer shipments. While company’s in-house annual mono wafer, solar cell, and solar module production capacity was 22 GW, 11.5 GW (940 MW for N-type cells), and 31 GW, respectively.

The company says that the sharp rise in the price of polysilicon has driven up the price of modules, which has affected the downstream demand in the short term. However, the lower demand has kept the materials’ prices from rising further, as the prices of polysilicon stabilize, downstream demand is expected to resume in the second half of the year.

Mr. Xiande Li, JinkoSolar’s Chairman of the Board of Directors and Chief Executive Officer, commented, “In the first quarter of 2021, our strategy was to carefully manage our supply chain as volatility continued to increase prices of raw materials quarter-over-quarter. As macroeconomic conditions continued to raise commodity prices, we remained flexible and focused on manufacturing process improvements to ease pressure on costs.”

“Taking into account this year’s supply chain and market conditions, we have adjusted our capacity expansion plan. By the end of 2021, we expect our in-house annual production capacity of monocrystalline silicon wafers, high-efficiency solar cells, and modules to reach 30GW, 24 GW, and 32 GW, respectively,” he added.