JinkoSolar has simultaneously announced its unaudited first-quarter 2011 financial results and the appointment of Ron Kenedi as the president for its wholly owned JinkoSolar US subsidiary. As the company comes off a record setting first quarter with solar product shipments reaching 208.4MW and revenues totaling US$326.7 million, Kenedi is anticipated to keep the US division growing and profitable.
A 30-year veteran of the solar industry, Kenedi was previously VP of Sharp Solar Energy Solutions, where he oversaw Sharp’s North American solar business. His past roles include head of sales and marketing at Photocomm and, after Photocomm’s acquisition by Kyocera, managing the logistics and engineering operations at Kyocera. He has been a part of the board of the Solar Energy Industry Association and Solar Alliance and received his BA from the State University of New York at Stony Brook.
“Mr. Kenedi's years of experience in the North American solar market make him just the man to head our U.S. operations,” said Arturo Herrero, chief marketing officer at JinkoSolar. “We're particularly impressed with his work at Sharp. Under his direction, Sharp's North American solar presence grew tremendously to become the market leader. His experience will be key as we expand our business and bring JinkoSolar's total solutions to the US market. We are confident in Mr. Kenedi's ability to lead JinkoSolar in winning new customers and gaining additional market share in the United States.”
Kenedi’s leadership skills will come in quite useful as JinkoSolar looks forward to another profitable quarter. The company’s first quarter ended March 31, in which it posted some of the highest revenue and shipments the company has seen. Solar product shipments increased from Q4 2010’s 162.6MW to Q1 2011’s 208.4MW. The 28.2% sequential growth included 34.3MW of silicon wafer shipments, 7.5MW of solar cells and 166.6MW of solar modules.
Revenue for the first quarter reached US$326.7 million, a 21.1% sequential increase over Q4's US$277.26 million. Additionally, the first-quarter revenue surpassed JinkoSolar’s 2011 Q1 guidance of US$280 million to US$290 million. The company notes that its revenue growth can be mostly attributed to the expanded sales volume of its solar modules, which stems, per the company, from its “strengthened brand recognition and geographical diversification.”
“JinkoSolar continued its growth trajectory during the first quarter of 2011,” said Kangping Chen, JinkoSolar's chief executive officer. “During the quarter, we exceeded our guidance in terms of revenue and beat expectations for our solar module shipments, while continuing to make timely deliveries despite the uncertainty surrounding Italy's solar policies. This helped us maintain strong relationships with our customers in Italy as well as in Germany, strengthening our position as a leading solar module provider in those countries.”
“We also continued to execute on our strategies of growing our market share, diversifying our customer base, and expanding geographically. During the quarter, we achieved a historic high of 166.6MW of solar module shipments, a sequential increase of approximately 50%. Although we expect the average selling price for solar modules to continue to decline in the second quarter, we are confident that we can gain additional market share from our competitors due to our vertical integration, leading cost structure, and strengthened brand recognition. For the second quarter, we expect to see an increase of at least 14% in solar module shipments,” he continued.
JinkoSolar’s gross profit for Q1 was US$85.5 million, an 11.2% upswing from Q4’s US$77.56 million. Gross margin was reported at 26.2%, compared to 28.5% in Q4. The drop in its gross margin was ascribed to an increase in the average polysilicon cost, as the price of polysilicon increased and the decrease in the average selling price of solar modules.
When focusing on the company’s in-house gross margin from its in-house silicon wafer and solar cell production, JinkoSolar relates that its in-house gross margin was 31% for Q1, which contrasted with 34.7% in 2010 Q4. Again, JinkoSolar advised that the sequential decrease was an aspect of a faster decline in the ASP of solar modules in relation to the average polysilicon cost per watt. The company stated that it used less silicon per watt when producing its products and decreased its manufacturing cost per watt. During the first quarter, JinkoSolar increased its in-house annual silicon wafer, solar cell, and solar module production capacities from 600MW at the end of December 2010 to almost 900MW by March 31.
In its outlook for the second quarter, JinkoSolar anticipates its solar module shipments will reach between 190MW and 200MW. Revenues for Q2 are expected to fall between US$330 million and US$350 million. Furthermore, it is looking to escalate its in-house annual silicon wafer, solar cell, and solar module production capacities to almost 1000MW each by the end of the current quarter.
Guidance for the full 2011 year has been maintained with expectations of achieving between 950MW and 1000MW in total solar module shipments, with US$1.4 billion to US$1.5 billion in revenue. Moreover, JinkoSolar points to its in-house production targets to reach almost 1.5GW by the end of the year.
“We continued to diversify our customer base across a range of markets, including the United States and France, while significantly reducing our exposure to Italy from 50% of total module shipments in the fourth quarter of 2010 to 30.7% in the first quarter of 2011,” Chen said. “In addition, we made significant progress entering into new markets such as Slovakia and the United Kingdom. As we expand our customer base globally, we will remain focused on lowering manufacturing costs and improving efficiencies to continue delivering high-quality, low cost solar products at competitive prices.”
“As various solar markets and foreign government solar policies continue to develop, we believe the industry might experience short-term volatility across certain segments of the solar value chain in 2011. Our growth strategy, however, remains firm. We will continue to produce high-quality, affordable solar products with a focus on long-term development rather than making decisions based on short-term margin gains. We maintain our guidance for 2011 in terms of shipments, revenues and capacity expansion,” he concluded.