JinkoSolar sold out for summertime

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Following its larger tier 1 Chinese PV module manufacturers, JinkoSolar is running at full capacity and is virtually sold out through the summer months, according to management in a conference call to discuss first quarter 2013 results.

The company reported late last week that first quarter revenue reached US$187.3 million, only a 0.3% decline from the fourth quarter of 2012 and up 9.7% from the first quarter of 2012.

Total solar product shipments were 338.6MW, a 12.2% increase from 301.9MW in the previous quarter.

JinkoSolar shipped 282.4MW of PV modules in the first quarter, compared to 252.3MW of modules in the previous quarter. Silicon wafers shipments were 25.4MW and shipments of solar cells were 30.8MW.

On a geographical basis module shipments to Europe are expected to decrease in coming quarters due to anti-dumping duties, while emphasis is being focused on Asia, primarily Japan. Management noted in the call that it expected less than 20% of shipments in 2013 to be in Europe, while Japan is expected to account for around 16% of product shipments in the coming quarters. Both branded and OEM shipments to Japan would increase.

Management noted that it had secured over 100MW of supply contracts in Japan with shipments underway in the first quarter. Further orders were expected which would span the residential, commercial and utility-scale markets.

India, Japan and Thailand represented almost 100MW, or 35%, of the total shipments in the first quarter of 2013, according to the company.

China shipments are expected to increase significantly in the second quarter onwards, primarily for PV power plant projects. The company said that it had supply contracts in China in excess of 300MW and rising.

Arturo Herrero, CMO of JinkoSolar said in the conference call: “Quarter 1 was Jinko's most geographically diverse, as we were entering into new emerging solar markets. In Q1 2013, JinkoSolar was active in 27 countries, compared to only 20 in Q4 last year. Sales in Canada and Australia improved, when compared to previous quarters, and we made our first important sales in Chile and Mexico, in Latin American countries.”

Although module ASPs were said to have declined in the quarter, this was offset by lower production costs, primarily purchasing polysilicon on the spot market in the range of US$16/kg to US$17/kg and increase module shipments.

As a result, JinkoSolar reported a gross margin of 12.7%, compared with 3.8% in the fourth quarter of 2012 and 0.7% in the first quarter of 2012.

Loss from operations was only US$2.7million, compared with a loss from operations of RMB733.7 million in the fourth quarter of 2012 and a loss from operations of RMB306.0 million in the first quarter of 2012. Net loss attributable to JinkoSolar’s ordinary shareholders was US$20.7 million.

“During the quarter, we [received] much better visibility and saw demand for our products rise in regions outside of Europe, specifically in China and other emerging markets. We are sold out until summer right now,” added Herrero.

Financial guidance

JinkoSolar said that it expected total module shipments in the second quarter to be in the range of 450MW to 470MW. For the full year, module shipments are expected to be between 1.2GW and 1.5GW, exceeding module production capacity of 1,200MW.

Management said that it could exceed nameplate capacity with minor capital investments to boost production by around 100MW, suggesting the company is securing extra module assembly capacity from third party suppliers to meet expected demand this year.

Capital expenditure in the first quarter of 2013 was only US$5.4 million and focused tightly on equipment maintenance with only around US$15 million allocated to CapEx for the full year.

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