November 01, 2020

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JinkoSolar Announces First Quarter 2020 Financial Results

SHANGHAI, June 15, 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 first quarter ended March 31, 2020. Strategic Business Updates Technological transformation towards high-efficiency portfolio of products now complete - mono wafer production capacity has been fully ramped up to 18GW in April 2020. Sale of two solar power plants with a combined capacity of 155MW in Mexico was closed in March 2020, allowing for the deleveraging of the Company's balance sheet by US$121.3 million. Leading the industry towards grid parity with the launch of 2020 flagship Tiger Pro module series. Reaffirm 2020 full-year shipment guidance and capacity expansion plan despite a decrease in global demand. Pandemic accelerating removal of outdated capacity in the market providing an opportunity for leading industry players to expand market share. First Quarter 2020 Operational and Financial Highlights Total solar module shipments were 3,411 megawatts ("MW"), within JinkoSolar's guidance range of 3.4 GW to 3.7 GW, a decrease of 24.8% from 4,538 MW in the fourth quarter of 2019 and an increase of 12.3% from 3,037 MW in the first quarter of 2019. Total revenues were RMB8.48 billion (US$1.20 billion). Excluding the impact from the disposal of the two solar power plants in Mexico, revenues were RMB7.29 billion (US$1.03 billion) and within JinkoSolar's guidance range of US$1.00 billion to US$1.08 billion; a decrease of 23.5% from the fourth quarter of 2019 and an increase of 25.1% from the first quarter of 2019. Gross margin was 19.5%. Excluding the impact from the disposal of two solar power plants in Mexico, gross margin was 19.7%, within JinkoSolar's guidance range of 19.0% to 21.0%, compared with 18.2% in the fourth quarter of 2019 and 16.6% in the first quarter of 2019. Income from operations was RMB732.7 million (US$103.5 million). Excluding the impact from the disposal of two solar power plants in Mexico, income from operations was RMB519.5 million (US$73.4 million), compared with RMB594.8 million in the fourth quarter of 2019 and RMB235.7 million in the first quarter of 2019. Net income attributable to the Company's ordinary shareholders was RMB282.4 million (US$39.9 million) in the first quarter of 2020, compared with RMB369.5 million in the fourth quarter of 2019 and RMB40.2 million in the first quarter of 2019. Diluted earnings per American depositary share ("ADS") were RMB2.67 (US$0.38) in the first quarter of 2020. Non-GAAP net income attributable to the Company's ordinary shareholders in the first quarter of 2020 was RMB227.5 million (US$32.1million), compared with RMB432.2 million in the fourth quarter of 2019 and RMB33.3 million in the first quarter of 2019. Non-GAAP basic and diluted earnings per ADS were RMB5.09 (US$0.72) and RMB4.59 (US$0.65), respectively, in the first quarter of 2020, compared with RMB9.74 for both in the fourth quarter of 2019 and RMB0.85 and RMB0.84, respectively, in the first quarter of 2019. Mr. Kangping Chen, JinkoSolar's Chief Executive Officer commented, "JinkoSolar continued to outperform during the quarter despite a very challenging global operating environment. Total solar module shipments, total revenue and gross margin were all within our guidance range for the quarter. Module shipments hit a record high 3,411MW during the quarter while total revenues were US$1.03 billion and gross margin was 19.7% if you exclude the impact from the disposal of two solar power plants in Mexico. As one of the world's leading solar module manufacturers, we have leveraged our deep experience to lead the industry through the pandemic which has allowed us to not only further expand our market share but also create technical standards and develop technological breakthroughs for a variety of products. Our order book for the second quarter and the rest of the year remains strong, and our guidance for total shipments for the full year 2020 remains unchanged at 18 to 20 GW." "While we expect global installations to fall by around 25% from last year due to the pandemic, we see a number of growth opportunities in the near-term as the market consolidates. Governments around the world have refocused their attention on energy security and localization, especially after the COVID-19 outbreak. As solar energy continues to race towards grid parity, we expect more countries to implement policies that support solar energy in the post-pandemic era, and at the same time, remove outdated energy capacity, reduce the levelized cost of energy for solar, and accelerate the application of new technologies to drive the deeper penetration of solar energy globally. Smaller, less-competitive manufacturers will gradually exit the market, leaving more opportunities for a few key players to expand their market share worldwide." "Technology remains central to strengthening our competitive edge in the market. We recently launched a new Tiger Pro series module with a maximum power output of 580W. The pandemic has actually accelerated the adoption of high-efficiency premium products by downstream partners which is allowing the industry to transition into the 500W ultra-high efficiency era earlier than expected. We continue to lead the industry by developing and launching innovative premium products, leveraging our highly-skilled R&D team, industry-leading research platform and expanding capacity to bring mass-produced cutting-edge products to market." "We continue to face a variety of challenges so far during the second quarter of 2020. Despite falling raw material prices, there has been a significant decline in overall global demand, and varying degrees of logistics and project delays in overseas markets. Our teams have been working hard to coordinate production, logistics and sales, while optimizing inventory levels. We continue to arrange shipments of personal protective equipment to our Malaysian and U.S. production facilities and ensure we are doing all we can to care for our employees, clients, suppliers and other business partners during this challenging time." First Quarter 2020 Financial Results Total Revenues Total revenues in the first quarter of 2020 were RMB8.48 billion (US$1.20 billion). In March 2020, the Company disposed of two solar power plants in Mexico with a combined capacity of 155 MW to an independent third party, and recognized revenue and cost of sales in the amount of RMB1.20 billion (US$169.1 million) and RMB979.7 million (US$138.4 million), respectively. Revenue from the disposal is composed of RMB284.4 million (US$ 40.1 million) in cash consideration and RMB1.29 billion (US$ 182.2 million) in non-cash consideration related to the buyer assuming project debt which was offset by settlement of loan receivables due from the solar power plants in the amount of RMB 376.9 million (US$ 53.2 million). Excluding the impact from the disposal of two solar power plants in Mexico, revenue was RMB7.29 billion (US$1.03 billion), a decrease of 23.5% from RMB9.53 billion in the fourth quarter of 2019 and an increase of 25.1% from RMB5.82 billion in the first quarter of 2019. The sequential decrease was mainly attributable to a decrease in the shipment of solar modules partially due to the delay of module shipments caused by the outbreak of COVID-19. The year-over-year increase was mainly attributable to the increase in shipment of solar modules. Gross Profit and Gross Margin Gross profit in the first quarter of 2020 was RMB1.66 billion (US$234.0 million). Excluding the impact from the disposal of two solar power plants in Mexico, gross profit was RMB1.44 billion (US$203.2 million), compared with RMB1.73 billion in the fourth quarter of 2019 and RMB964.3 million in the first quarter of 2019. The sequential decrease was mainly attributable to a decrease 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 that is increasingly shifting 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 19.5% in the first quarter of 2020. Excluding the impact from the disposal of two solar power plants in Mexico, gross margin was 19.7%, compared with 18.2% in the fourth quarter of 2019 and 16.6% in the first quarter of 2019. The sequential and year-over-year increases were 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 first quarter of 2020 was RMB732.7 million (US$103.5 million), including RMB213.2 million (US$30.1 million) from the disposal of two solar power plants in Mexico, compared with RMB594.8 million in the fourth quarter of 2019 and RMB235.7 million in the first quarter of 2019. Operating margin was 8.6% in the first quarter of 2020. Excluding the impact from the disposal of two solar power plants in Mexico, operating margin was 7.1%, compared with 6.2% in the fourth quarter of 2019 and 4.0% in the first quarter of 2019. Total operating expenses in the first quarter of 2020 were RMB924.2 million (US$130.5 million) including RMB4.8 million (US$ 0.7 million) from the disposal of two solar power plants in Mexico, a decrease of 18.6% from RMB1.13 billion in the fourth quarter of 2019 and an increase of 26.8% from RMB728.6 million in the first quarter of 2019. The sequential decease was mainly due to (i) a decrease in shipping cost resulting from a decrease in solar module shipments, (ii) a decrease of impairment loss on property, plant and equipment, and (iii) a reversal of a previous bad debt provision upon cash receipt of RMB52.5 million (USD7.4 million) based on final judgement for the lawsuits with Wuxi Zhongcai. The year-over-year increase was mainly due to an increase in shipping costs. Total operating expenses accounted for 10.9% of total revenues in the first quarter of 2020. Excluding the impact from the disposal of two solar power plants in Mexico, operating expense accounted for 12.6% of revenues, compared to 11.9% in the fourth quarter of 2019 and 12.5% in the first quarter of 2019. The sequential increase was primarily due to an increase in shipping costs as a percentage of total revenue associated with a higher percentage of shipments to overseas market in the first quarter of 2020. Interest Expense, Net Net interest expense in the first quarter of 2020 was RMB108.6 million (US$15.3 million), an increase of 29.6% from RMB83.8 million in the fourth quarter of 2019 and an increase of 13.0% from RMB96.1 million in the first quarter of 2019. The sequential increase was mainly due to an increase in interest expense associated with discounted notes receivables in the first quarter of 2020. 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 loss (including change in fair value of foreign exchange derivatives) of RMB106.8 million (US$15.1 million) in the first quarter of 2020, compared to a net exchange gain of RMB77.9 million in the fourth quarter of 2019 and a net exchange loss of RMB62.9 million in the first quarter of 2019. 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 associated with the appreciation of the U.S. dollars against the RMB in the first quarter of 2020. 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 loss arising from change in fair value of interest rate swap of RMB78.9 million (US$11.1 million) in the first quarter of 2020, compared to a gain of RMB24.5 million in the fourth quarter of 2019. The loss was primarily due to a decrease in long-term interest rates in the first quarter of 2020. 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 gain from a change in fair value of the Notes of RMB166.2 million (US$23.5 million) in the first quarter of 2020, compared to a loss of RMB152.7 million in the fourth quarter of 2019. The change was primarily due to a decrease in the Company's stock price in the first quarter of 2020. 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 loss from a change in fair value of the call option of RMB100.2 million (US$14.1 million) in the first quarter of 2020, compared to a gain of RMB85.6 million in the fourth quarter of 2019. The change was primarily due to a decrease in the Company's stock price in the first quarter of 2020. Equity in (Loss)/Gain 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 loss of affiliated companies of RMB101.5 million (US$14.3 million) in the first quarter of 2020, compared with a gain of RMB31.8 million in the fourth quarter of 2019 and a loss of RMB23.7 million in the first quarter of 2019. 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 decrease in long-term interest rates in the first quarter of 2020. Hedge accounting was not applied for the derivative. Income Tax (Expenses)/Benefit The Company recorded an income tax expense of RMB109.5 million (US$15.5 million) in the first quarter of 2020, compared with an income tax expense of RMB221.0 million in the fourth quarter of 2019 and an income tax benefit of RMB4.3 million in the first quarter of 2019. The sequential decrease 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 compared to the first quarter of 2020. Net Income and Earnings per Share Net income attributable to the Company's ordinary shareholders was RMB282.4 million (US$39.9 million) in the first quarter of 2020, compared with RMB369.5 million in the fourth quarter of 2019 and RMB40.2 million in the first quarter of 2019. Basic and diluted earnings per ordinary share were RMB1.58 (US$0.22) and RMB0.67 (US$0.09), respectively, during the first quarter of 2020. This translates into basic and diluted earnings per ADS of RMB6.32 (US$0.89) and RMB2.67 (US$0.38), respectively. Non-GAAP net income attributable to the Company's ordinary shareholders in the first quarter of 2020 was RMB227.5 million (US$32.1 million), compared with RMB432.2 million in the fourth quarter of 2019 and RMB33.3 million in the first quarter of 2019. Non-GAAP basic and diluted earnings per ordinary share were RMB1.27 (US$0.18) and RMB1.15 (US$0.16), respectively, during the first quarter of 2020. This translates into non-GAAP basic and diluted earnings per ADS of RMB5.09 (US$0.72) and RMB4.59 (US$0.65), respectively. Financial Position As of March 31, 2020, the Company had RMB4.74 billion (US$669.5 million) in cash and cash equivalents and restricted cash, compared with RMB6.23 billion as of December 31, 2019. As of March 31, 2020, the Company's accounts receivables due from third parties were RMB5.31 billion (US$750.3 million), compared with RMB5.27 billion as of December 31, 2019. As of March 31, 2020, the Company's inventories were RMB7.15 billion (US$1.01 billion), compared with RMB5.82 billion as of December 31, 2019. As of March 31, 2020, the Company's total interest-bearing debts were RMB12.79 billion (US$1.81 billion), of which RMB1.15 billion (US$162.3 million) was related to the Company's overseas downstream solar projects, compared with RMB13.41 billion, of which RMB2.05 billion was related to the Company's overseas downstream solar projects as of December 31, 2019. The decrease of interest-bearing debts was mainly due to the disposal of two solar power plants in Mexico. First Quarter 2020 Operational Highlights Solar Module Shipments Total solar module shipments in the first quarter of 2020 were 3,411 MW. Solar Products Production Capacity As of March 31, 2020, the Company's in-house annual mono wafer, solar cell and solar module production capacity was 17.5 GW, [1]10.6 GW (9.8 GW for PERC cells and 800 MW for N type cells) and 16 GW, respectively. Note 1: In addition to the mono wafer, our multi wafer production capacity was 3.5 GW as of March 31, 2020. Operations and Business Outlook The guidance for total module shipment and capacity expansion of the Company remain unchanged. The Company expects that the COVID-19 outbreak will lead to a significant decrease in global demand, causing the decrease in the market price of solar modules. Second 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 second quarter of 2020, the Company expects total solar module shipments to be in the range of 4.2 GW to 4.5 GW. Total revenue for the second quarter is expected to be in the range of US$1.10 billion to US$1.18 billion. Gross margin for the first quarter is expected to be between 16% and 18%. 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 20.0 GW, 11.0 GW (including 900 MW N-type cells) and 25.0 GW, respectively, by the end of 2020. Recent Business Developments In February 2020, JinkoSolar was awarded the "Top Brand PV Europe Seal 2020" by EuPD Research, an internationally recognized research institute, for the second consecutive year. In March 2020, JinkoSolar's Tiger module hit 1GW in orders during the first three months after its launch. In March 2020, JinkoSolar's new N-type all black solar panel specifically developed for home installation generate a maximum output of 405 Wp and hit a 21.22% efficiency, enabling homeowners to fit more power capacity on rooftops than ever before. In March 2020, JinkoSolar's Board of Directors approved a share repurchase program which authorizes the Company to repurchase up to US$100 million of its ordinary shares represented by American depositary shares within twelve months. In March 2020, Mr. Xiande Li, Chairman of JinkoSolar's Board of Directors, completed purchase of 200,000 JinkoSolar's American depositary shares. In March 2020, JinkoSolar donated one million face masks and other protective equipment items to several countries severely affected by COVID-19 including Italy, Spain, Germany, France, Britain, Switzerland, South Korea, the Netherlands, Austria, Belgium, Turkey, Portugal and Norway. In April 2020, Jinko Solar Australia Holdings Co. Pty Ltd, a subsidiary of JinkoSolar, signed a one-year AUD37 million credit line agreement with the National Australia Bank. In April 2020, JinkoSolar announced favorable developments in patent litigation brought by Hanwha Q CELLS. In May 2020, JinkoSolar officially launched the 2020 flagship Tiger Pro module series. In May 2020, JinkoSolar was ranked as a Top Performer for the sixth consecutive year in the 2020 PV Module Reliability Scorecard published by PV Evolution Labs in partnership with DNV GL. Conference Call Information JinkoSolar's management will host an earnings conference call on Monday, June 15, 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 U.S. Toll Free: +1 855-824-5644 Passcode: 55108006# 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, June 22, 2020. The dial-in details for the replay are as follows: International: +61 2 8325 2405 U.S.: +1 646 982 0473 Passcode: 319334664# 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 17.5 GW for mono wafers, 10.6 GW for solar cells, and 16 GW for solar modules, as of March 31, 2020. 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, change in fair value of convertible senior notes and call option, interest expenses of convertible senior notes and call option, exchange (gain)/loss on the convertible senior notes and call option, and stock-based compensation (benefit)/expense; 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. As the Non-GAAP net income is adjusted to exclude the change in fair value of call option, the dilutive impact of call option, if any, is also excluded from the denominator for the calculation of Non-GAAP earnings per share and non-GAAP earnings per ADS. 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. Impact of the Recently Adopted Major Accounting Pronouncement The Company adopted the update of ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): "Measurement of Credit Losses on Financial Instruments" on January 1, 2020. Upon adoption of ASC 326 on January 1, 2020, the Company used the modified retrospective transition method through a RMB6.6 million cumulative-effect increase to retained earnings, among which RMB30.9 million was related to the decrease of allowance for accounts receivables-third parties, RMB15.0 million was related to the increase of allowance for accounts receivables- related parties and RMB9.3 million was related to the increase of allowance for other receivables and other current/non-current assets. The adoption of the new guidance did not have a material impact to the Company's consolidated financial statements. 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 March 31, 2020, which was RMB7.0808 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 ZhangJinkoSolar Holding Co., Ltd.Tel: +86 21-5183-3105Email: ir@jinkosolar.com Christian ArnellChristensenTel: +86-10-5900-2940Email: carnell@christensenir.com In the U.S.:Ms. Linda BergkampChristensenTel: +1-480-614-3004Email: lbergkamp@ChristensenIR.com JINKOSOLAR HOLDING CO., LTD. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except ADS and Share data) For the quarter ended March 31, 2019 December 31, 2019 March 31, 2020 RMB RMB RMB USD Revenues from third parties 5,677,227 9,528,920 8,431,213 1,190,715 Revenues from related parties 144,821 538 52,710 7,444 Total revenues 5,822,048 9,529,458 8,483,923 1,198,159 Cost of revenues (4,857,711) (7,799,733) (6,827,045) (964,163) Gross profit 964,337 1,729,725 1,656,878 233,996 Operating expenses: Selling and marketing (459,314) (632,871) (613,821) (86,688) General and administrative (191,902) (342,048) (238,594) (33,696) Research and development (77,378) (91,740) (71,784) (10,138) Impairment of long-lived assets - (68,262) - - Total operating expenses (728,594) (1,134,921) (924,199) (130,522) Income from operations 235,743 594,804 732,679 103,474 Interest expenses, net (96,110) (83,826) (108,613) (15,339) Subsidy income 4,741 14,366 5,061 716 Exchange (loss)/gain (80,980) (14,003) 10,951 1,547 Change in fair value of interest rate swap (30,199) 24,466 (78,878) (11,140) Change in fair value of foreign exchange derivatives 18,114 91,889 (117,787) (16,635) Change in fair value of convertible senior notes and call option - (67,119) 65,990 9,320 Other income/(expense), net 7,398 1,432 (2,187) (309) Gain on disposal of subsidiaries - 19,935 - - Income before income taxes 58,707 581,944 507,216 71,634 Income tax benefit/(expense) 4,250 (220,993) (109,520) (15,467) Equity in (loss)/gain of affiliated companies (23,709) 31,780 (101,527) (14,338) Net income 39,248 392,731 296,169 41,829 Less: Net (loss)/income attributable to non-controlling interests (939) 23,225 13,728 1,939 Net income attributable to JinkoSolar Holding Co., Ltd.'s ordinary shareholders 40,187 369,506 282,441 39,890 Net income attributable to JinkoSolar Holding Co., Ltd.'s ordinary shareholders per share: Basic 0.26 2.08 1.58 0.22 Diluted 0.25 1.67 0.67 0.09 Net income attributable to JinkoSolar Holding Co., Ltd.'sordinary shareholders per ADS: Basic 1.02 8.32 6.32 0.89 Diluted 1.02 6.68 2.67 0.38 Weighted average ordinary shares outstanding: Basic 156,888,381 177,524,685 178,743,903 178,743,903 Diluted 158,017,104 171,509,296 198,081,276 198,081,276 Weighted average ADS outstanding: Basic 39,222,095 44,381,171 44,685,976 44,685,976 Diluted 39,504,276 42,877,324 49,520,319 49,520,319 UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Net income 39,248 392,731 296,169 41,829 Other comprehensive income: -Foreign currency translation adjustments (17,459) (21,970) 45,040 6,361 -Change in the instrument-specific credit risk - (26,579) 39,202 5,536 Comprehensive income 21,789 344,182 380,411 53,726 Less: Comprehensive (loss)/income attributable to non-controlling interests (939) 23,225 13,728 1,939 Comprehensive income attributable to JinkoSolar Holding Co., Ltd.'s ordinary shareholders 22,728 320,957 366,683 51,787 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 40,187 369,506 282,441 39,890 Change in fair value of convertible senior notes and call option - 67,119 (65,990) (9,320) Net interest expenses of convertible senior notes and call option - 6,281 6,128 865 Exchange (gain)/loss on convertible senior notes and call option - (4,112) 4,664 659 Stock-based compensation (benefit)/expense (6,924) (6,630) 249 35 Non-GAAP net income attributable to ordinary shareholders 33,263 432,164 227,492 32,129 Non-GAAP earnings per share attributable to ordinary shareholders - Basic 0.21 2.43 1.27 0.18 Diluted 0.21 2.43 1.15 0.16 Non-GAAP earnings per ADS attributable to ordinary shareholders - Basic 0.85 9.74 5.09 0.72 Diluted 0.84 9.74 4.59 0.65 Non-GAAP weighted average ordinary shares outstanding Basic 156,888,381 177,524,685 178,743,903 178,743,903 Diluted 158,017,104 177,524,685 198,081,276 198,081,276 Non-GAAP weighted average ADS outstanding Basic 39,222,095 44,381,171 44,685,976 44,685,976 Diluted 39,504,276 44,381,171 49,520,319 49,520,319 JINKOSOLAR HOLDING CO., LTD. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) December 31, 2019 March 31, 2020 RMB RMB USD ASSETS Current assets: Cash and cash equivalents 5,653,854 3,947,853 557,543 Restricted cash 576,546 793,056 112,001 Restricted short-term investments 6,930,502 7,264,341 1,025,921 Accounts receivable, net - related parties 520,504 554,836 78,358 Accounts receivable, net - third parties 5,266,351 5,312,745 750,303 Notes receivable, net - related parties 18,629 18,629 2,631 Notes receivable, net - third parties 1,529,801 1,602,390 226,301 Advances to suppliers, net - third parties 2,522,373 2,280,476 322,065 Inventories, net 5,818,789 7,147,762 1,009,457 Forward contract receivables 52,281 - - Prepayments and other current assets, net - related parties 54,318 52,442 7,406 Prepayments and other current assets, net 1,573,482 1,816,529 256,542 Held-for-sale assets 1,170,818 - - Total current assets 31,688,248 30,791,059 4,348,528 Non-current assets: Restricted cash 531,158 643,549 90,886 Accounts receivable, net - third parties - 28,848 4,074 Project Assets 798,243 818,041 115,529 Long-term investments 278,021 159,710 22,555 Property, plant and equipment, net 10,208,205 10,657,193 1,505,083 Land use rights, net 597,922 668,205 94,369 Intangible assets, net 36,395 37,167 5,249 Financing lease right-of-use assets, net 1,259,713 1,219,385 172,210 Operating lease right-of-use assets, net 317,904 284,722 40,210 Deferred tax assets 271,286 271,286 38,313 Call Option-concurrent with issuance of convertible senior notes 294,178 197,276 27,861 Other assets, net - related parties 96,753 98,048 13,847 Other assets, net - third parties 1,466,692 1,359,510 192,000 Total non-current assets 16,156,470 16,442,940 2,322,186 Total assets 47,844,718 47,233,999 6,670,714 LIABILITIES Current liabilities: Accounts payable - related parties 36,310 - - Accounts payable - third parties 4,952,630 5,465,796 771,918 Notes payable - third parties 7,518,570 7,489,024 1,057,652 Accrued payroll and welfare expenses 879,465 780,786 110,268 Advances from related parties 749 752 106 Advances from third parties 4,350,380 3,507,328 495,329 Income tax payable 117,422 123,957 17,506 Other payables and accruals 3,055,928 3,195,399 451,279 Other payables due to related parties 13,127 13,381 1,890 Forward contract payables 3,857 90,564 12,790 Financing lease liabilities - current 227,613 243,253 34,354 Operating lease liabilities - current 40,043 38,636 5,456 Short-term borrowings from third parties,including current portion of long-term bankborrowings 9,047,250 9,701,037 1,370,048 Guarantee liabilities to related parties 25,688 23,776 3,358 Held-for-sale liabilities 1,008,196 - - Total current liabilities 31,277,228 30,673,689 4,331,954 Non-current liabilities: Long-term borrowings 1,586,187 1,521,730 214,909 Convertible senior notes 728,216 532,111 75,148 Accrued warranty costs - non current 651,968 671,556 94,842 Financing lease liabilities 583,491 502,334 70,943 Operating lease liabilities 279,534 246,434 34,803 Deferred tax liability 250,734 250,734 35,410 Guarantee liabilities to related parties - non current 46,332 44,409 6,272 Total non-current liabilities 4,126,462 3,769,308 532,327 Total liabilities 35,403,690 34,442,997 4,864,281 SHAREHOLDERS' EQUITY Ordinary shares (US$0.00002 par value, 500,000,000 shares authorized, 180,653,497 and 179,430,857 shares issued as of December 31, 2019 and March 31, 2020, respectively) 25 25 4 Additional paid-in capital 4,582,850 4,583,099 647,257 Statutory reserves 689,707 689,707 97,405 Accumulated other comprehensive income 62,952 147,194 20,787 Treasury stock, at cost; 1,723,200 and 2,945,840 ordinary shares as of December 31, 2019 and March 31, 2020, respectively (13,876) (43,170) (6,097) Accumulated retained earnings 3,981,661 4,270,710 603,139 Total JinkoSolar Holding Co., Ltd. shareholders' equity 9,303,319 9,647,565 1,362,495 Non-controlling interests 3,137,709 3,143,437 443,938 Total liabilities and shareholders' equity 47,844,718 47,233,999 6,670,714 Related Links :http://www.jinkosolar.com


SHANGHAI, June 15, 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 first quarter ended March 31, 2020.

Strategic Business Updates

  • Technological transformation towards high-efficiency portfolio of products now complete – mono wafer production capacity has been fully ramped up to 18GW in April 2020.
  • Sale of two solar power plants with a combined capacity of 155MW in Mexico was closed in March 2020, allowing for the deleveraging of the Company’s balance sheet by US$121.3 million.
  • Leading the industry towards grid parity with the launch of 2020 flagship Tiger Pro module series.
  • Reaffirm 2020 full-year shipment guidance and capacity expansion plan despite a decrease in global demand.
  • Pandemic accelerating removal of outdated capacity in the market providing an opportunity for leading industry players to expand market share.

First Quarter 2020 Operational and Financial Highlights

  • Total solar module shipments were 3,411 megawatts (“MW”), within JinkoSolar’s guidance range of 3.4 GW to 3.7 GW, a decrease of 24.8% from 4,538 MW in the fourth quarter of 2019 and an increase of 12.3% from 3,037 MW in the first quarter of 2019.
  • Total revenues were RMB8.48 billion (US$1.20 billion). Excluding the impact from the disposal of the two solar power plants in Mexico, revenues were RMB7.29 billion (US$1.03 billion) and within JinkoSolar’s guidance range of US$1.00 billion to US$1.08 billion; a decrease of 23.5% from the fourth quarter of 2019 and an increase of 25.1% from the first quarter of 2019.
  • Gross margin was 19.5%. Excluding the impact from the disposal of two solar power plants in Mexico, gross margin was 19.7%, within JinkoSolar’s guidance range of 19.0% to 21.0%, compared with 18.2% in the fourth quarter of 2019 and 16.6% in the first quarter of 2019.
  • Income from operations was RMB732.7 million (US$103.5 million). Excluding the impact from the disposal of two solar power plants in Mexico, income from operations was RMB519.5 million (US$73.4 million), compared with RMB594.8 million in the fourth quarter of 2019 and RMB235.7 million in the first quarter of 2019.
  • Net income attributable to the Company’s ordinary shareholders was RMB282.4 million (US$39.9 million) in the first quarter of 2020, compared with RMB369.5 million in the fourth quarter of 2019 and RMB40.2 million in the first quarter of 2019.
  • Diluted earnings per American depositary share (“ADS”) were RMB2.67 (US$0.38) in the first quarter of 2020.
  • Non-GAAP net income attributable to the Company’s ordinary shareholders in the first quarter of 2020 was RMB227.5 million (US$32.1million), compared with RMB432.2 million in the fourth quarter of 2019 and RMB33.3 million in the first quarter of 2019.
  • Non-GAAP basic and diluted earnings per ADS were RMB5.09 (US$0.72) and RMB4.59 (US$0.65), respectively, in the first quarter of 2020, compared with RMB9.74 for both in the fourth quarter of 2019 and RMB0.85 and RMB0.84, respectively, in the first quarter of 2019.

Mr. Kangping Chen, JinkoSolar’s Chief Executive Officer commented, “JinkoSolar continued to outperform during the quarter despite a very challenging global operating environment. Total solar module shipments, total revenue and gross margin were all within our guidance range for the quarter. Module shipments hit a record high 3,411MW during the quarter while total revenues were US$1.03 billion and gross margin was 19.7% if you exclude the impact from the disposal of two solar power plants in Mexico. As one of the world’s leading solar module manufacturers, we have leveraged our deep experience to lead the industry through the pandemic which has allowed us to not only further expand our market share but also create technical standards and develop technological breakthroughs for a variety of products. Our order book for the second quarter and the rest of the year remains strong, and our guidance for total shipments for the full year 2020 remains unchanged at 18 to 20 GW.”

“While we expect global installations to fall by around 25% from last year due to the pandemic, we see a number of growth opportunities in the near-term as the market consolidates. Governments around the world have refocused their attention on energy security and localization, especially after the COVID-19 outbreak. As solar energy continues to race towards grid parity, we expect more countries to implement policies that support solar energy in the post-pandemic era, and at the same time, remove outdated energy capacity, reduce the levelized cost of energy for solar, and accelerate the application of new technologies to drive the deeper penetration of solar energy globally. Smaller, less-competitive manufacturers will gradually exit the market, leaving more opportunities for a few key players to expand their market share worldwide.”

“Technology remains central to strengthening our competitive edge in the market. We recently launched a new Tiger Pro series module with a maximum power output of 580W. The pandemic has actually accelerated the adoption of high-efficiency premium products by downstream partners which is allowing the industry to transition into the 500W ultra-high efficiency era earlier than expected. We continue to lead the industry by developing and launching innovative premium products, leveraging our highly-skilled R&D team, industry-leading research platform and expanding capacity to bring mass-produced cutting-edge products to market.”

“We continue to face a variety of challenges so far during the second quarter of 2020. Despite falling raw material prices, there has been a significant decline in overall global demand, and varying degrees of logistics and project delays in overseas markets. Our teams have been working hard to coordinate production, logistics and sales, while optimizing inventory levels. We continue to arrange shipments of personal protective equipment to our Malaysian and U.S. production facilities and ensure we are doing all we can to care for our employees, clients, suppliers and other business partners during this challenging time.”

First Quarter 2020 Financial Results

Total Revenues

Total revenues in the first quarter of 2020 were RMB8.48 billion (US$1.20 billion). In March 2020, the Company disposed of two solar power plants in Mexico with a combined capacity of 155 MW to an independent third party, and recognized revenue and cost of sales in the amount of RMB1.20 billion (US$169.1 million) and RMB979.7 million (US$138.4 million), respectively. Revenue from the disposal is composed of RMB284.4 million (US$ 40.1 million) in cash consideration and RMB1.29 billion (US$ 182.2 million) in non-cash consideration related to the buyer assuming project debt which was offset by settlement of loan receivables due from the solar power plants in the amount of RMB 376.9 million (US$ 53.2 million). Excluding the impact from the disposal of two solar power plants in Mexico, revenue was RMB7.29 billion (US$1.03 billion), a decrease of 23.5% from RMB9.53 billion in the fourth quarter of 2019 and an increase of 25.1% from RMB5.82 billion in the first quarter of 2019. The sequential decrease was mainly attributable to a decrease in the shipment of solar modules partially due to the delay of module shipments caused by the outbreak of COVID-19. The year-over-year increase was mainly attributable to the increase in shipment of solar modules.

Gross Profit and Gross Margin

Gross profit in the first quarter of 2020 was RMB1.66 billion (US$234.0 million). Excluding the impact from the disposal of two solar power plants in Mexico, gross profit was RMB1.44 billion (US$203.2 million), compared with RMB1.73 billion in the fourth quarter of 2019 and RMB964.3 million in the first quarter of 2019. The sequential decrease was mainly attributable to a decrease 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 that is increasingly shifting 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 19.5% in the first quarter of 2020. Excluding the impact from the disposal of two solar power plants in Mexico, gross margin was 19.7%, compared with 18.2% in the fourth quarter of 2019 and 16.6% in the first quarter of 2019. The sequential and year-over-year increases were 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 first quarter of 2020 was RMB732.7 million (US$103.5 million), including RMB213.2 million (US$30.1 million) from the disposal of two solar power plants in Mexico, compared with RMB594.8 million in the fourth quarter of 2019 and RMB235.7 million in the first quarter of 2019. Operating margin was 8.6% in the first quarter of 2020. Excluding the impact from the disposal of two solar power plants in Mexico, operating margin was 7.1%, compared with 6.2% in the fourth quarter of 2019 and 4.0% in the first quarter of 2019.

Total operating expenses in the first quarter of 2020 were RMB924.2 million (US$130.5 million) including RMB4.8 million (US$ 0.7 million) from the disposal of two solar power plants in Mexico, a decrease of 18.6% from RMB1.13 billion in the fourth quarter of 2019 and an increase of 26.8% from RMB728.6 million in the first quarter of 2019. The sequential decease was mainly due to (i) a decrease in shipping cost resulting from a decrease in solar module shipments, (ii) a decrease of impairment loss on property, plant and equipment, and (iii) a reversal of a previous bad debt provision upon cash receipt of RMB52.5 million (USD7.4 million) based on final judgement for the lawsuits with Wuxi Zhongcai. The year-over-year increase was mainly due to an increase in shipping costs.

Total operating expenses accounted for 10.9% of total revenues in the first quarter of 2020. Excluding the impact from the disposal of two solar power plants in Mexico, operating expense accounted for 12.6% of revenues, compared to 11.9% in the fourth quarter of 2019 and 12.5% in the first quarter of 2019. The sequential increase was primarily due to an increase in shipping costs as a percentage of total revenue associated with a higher percentage of shipments to overseas market in the first quarter of 2020.

Interest Expense, Net

Net interest expense in the first quarter of 2020 was RMB108.6 million (US$15.3 million), an increase of 29.6% from RMB83.8 million in the fourth quarter of 2019 and an increase of 13.0% from RMB96.1 million in the first quarter of 2019. The sequential increase was mainly due to an increase in interest expense associated with discounted notes receivables in the first quarter of 2020. 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 loss (including change in fair value of foreign exchange derivatives) of RMB106.8 million (US$15.1 million) in the first quarter of 2020, compared to a net exchange gain of RMB77.9 million in the fourth quarter of 2019 and a net exchange loss of RMB62.9 million in the first quarter of 2019. 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 associated with the appreciation of the U.S. dollars against the RMB in the first quarter of 2020.

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 loss arising from change in fair value of interest rate swap of RMB78.9 million (US$11.1 million) in the first quarter of 2020, compared to a gain of RMB24.5 million in the fourth quarter of 2019. The loss was primarily due to a decrease in long-term interest rates in the first quarter of 2020. 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 gain from a change in fair value of the Notes of RMB166.2 million (US$23.5 million) in the first quarter of 2020, compared to a loss of RMB152.7 million in the fourth quarter of 2019. The change was primarily due to a decrease in the Company’s stock price in the first quarter of 2020.

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 loss from a change in fair value of the call option of RMB100.2 million (US$14.1 million) in the first quarter of 2020, compared to a gain of RMB85.6 million in the fourth quarter of 2019. The change was primarily due to a decrease in the Company’s stock price in the first quarter of 2020.

Equity in (Loss)/Gain 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 loss of affiliated companies of RMB101.5 million (US$14.3 million) in the first quarter of 2020, compared with a gain of RMB31.8 million in the fourth quarter of 2019 and a loss of RMB23.7 million in the first quarter of 2019. 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 decrease in long-term interest rates in the first quarter of 2020. Hedge accounting was not applied for the derivative.

Income Tax (Expenses)/Benefit

The Company recorded an income tax expense of RMB109.5 million (US$15.5 million) in the first quarter of 2020, compared with an income tax expense of RMB221.0 million in the fourth quarter of 2019 and an income tax benefit of RMB4.3 million in the first quarter of 2019. The sequential decrease 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 compared to the first quarter of 2020.

Net Income and Earnings per Share

Net income attributable to the Company’s ordinary shareholders was RMB282.4 million (US$39.9 million) in the first quarter of 2020, compared with RMB369.5 million in the fourth quarter of 2019 and RMB40.2 million in the first quarter of 2019.

Basic and diluted earnings per ordinary share were RMB1.58 (US$0.22) and RMB0.67 (US$0.09), respectively, during the first quarter of 2020. This translates into basic and diluted earnings per ADS of RMB6.32 (US$0.89) and RMB2.67 (US$0.38), respectively.

Non-GAAP net income attributable to the Company’s ordinary shareholders in the first quarter of 2020 was RMB227.5 million (US$32.1 million), compared with RMB432.2 million in the fourth quarter of 2019 and RMB33.3 million in the first quarter of 2019.

Non-GAAP basic and diluted earnings per ordinary share were RMB1.27 (US$0.18) and RMB1.15 (US$0.16), respectively, during the first quarter of 2020. This translates into non-GAAP basic and diluted earnings per ADS of RMB5.09 (US$0.72) and RMB4.59 (US$0.65), respectively.

Financial Position

As of March 31, 2020, the Company had RMB4.74 billion (US$669.5 million) in cash and cash equivalents and restricted cash, compared with RMB6.23 billion as of December 31, 2019.

As of March 31, 2020, the Company’s accounts receivables due from third parties were RMB5.31 billion (US$750.3 million), compared with RMB5.27 billion as of December 31, 2019.

As of March 31, 2020, the Company’s inventories were RMB7.15 billion (US$1.01 billion), compared with RMB5.82 billion as of December 31, 2019.

As of March 31, 2020, the Company’s total interest-bearing debts were RMB12.79 billion (US$1.81 billion), of which RMB1.15 billion (US$162.3 million) was related to the Company’s overseas downstream solar projects, compared with RMB13.41 billion, of which RMB2.05 billion was related to the Company’s overseas downstream solar projects as of December 31, 2019. The decrease of interest-bearing debts was mainly due to the disposal of two solar power plants in Mexico.

First Quarter 2020 Operational Highlights

Solar Module Shipments

Total solar module shipments in the first quarter of 2020 were 3,411 MW.

Solar Products Production Capacity

As of March 31, 2020, the Company’s in-house annual mono wafer, solar cell and solar module production capacity was 17.5 GW, [1]10.6 GW (9.8 GW for PERC cells and 800 MW for N type cells) and 16 GW, respectively.

Note 1:

In addition to the mono wafer, our multi wafer production capacity was 3.5 GW as of March 31, 2020.

Operations and Business Outlook

The guidance for total module shipment and capacity expansion of the Company remain unchanged. The Company expects that the COVID-19 outbreak will lead to a significant decrease in global demand, causing the decrease in the market price of solar modules.

Second 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 second quarter of 2020, the Company expects total solar module shipments to be in the range of 4.2 GW to 4.5 GW. Total revenue for the second quarter is expected to be in the range of US$1.10 billion to US$1.18 billion. Gross margin for the first quarter is expected to be between 16% and 18%.

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 20.0 GW, 11.0 GW (including 900 MW N-type cells) and 25.0 GW, respectively, by the end of 2020.

Recent Business Developments

  • In February 2020, JinkoSolar was awarded the “Top Brand PV Europe Seal 2020” by EuPD Research, an internationally recognized research institute, for the second consecutive year.
  • In March 2020, JinkoSolar’s Tiger module hit 1GW in orders during the first three months after its launch.
  • In March 2020, JinkoSolar’s new N-type all black solar panel specifically developed for home installation generate a maximum output of 405 Wp and hit a 21.22% efficiency, enabling homeowners to fit more power capacity on rooftops than ever before.
  • In March 2020, JinkoSolar’s Board of Directors approved a share repurchase program which authorizes the Company to repurchase up to US$100 million of its ordinary shares represented by American depositary shares within twelve months.
  • In March 2020, Mr. Xiande Li, Chairman of JinkoSolar’s Board of Directors, completed purchase of 200,000 JinkoSolar’s American depositary shares.
  • In March 2020, JinkoSolar donated one million face masks and other protective equipment items to several countries severely affected by COVID-19 including Italy, Spain, Germany, France, Britain, Switzerland, South Korea, the Netherlands, Austria, Belgium, Turkey, Portugal and Norway.
  • In April 2020, Jinko Solar Australia Holdings Co. Pty Ltd, a subsidiary of JinkoSolar, signed a one-year AUD37 million credit line agreement with the National Australia Bank.
  • In April 2020, JinkoSolar announced favorable developments in patent litigation brought by Hanwha Q CELLS.
  • In May 2020, JinkoSolar officially launched the 2020 flagship Tiger Pro module series.
  • In May 2020, JinkoSolar was ranked as a Top Performer for the sixth consecutive year in the 2020 PV Module Reliability Scorecard published by PV Evolution Labs in partnership with DNV GL.

Conference Call Information

JinkoSolar’s management will host an earnings conference call on Monday, June 15, 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

U.S. Toll Free:

+1 855-824-5644

Passcode:

55108006#

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, June 22, 2020. The dial-in details for the replay are as follows:

International:

+61 2 8325 2405

U.S.:

+1 646 982 0473

Passcode:

319334664#

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 17.5 GW for mono wafers, 10.6 GW for solar cells, and 16 GW for solar modules, as of March 31, 2020.

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, change in fair value of convertible senior notes and call option, interest expenses of convertible senior notes and call option, exchange (gain)/loss on the convertible senior notes and call option, and stock-based compensation (benefit)/expense; 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. As the Non-GAAP net income is adjusted to exclude the change in fair value of call option, the dilutive impact of call option, if any, is also excluded from the denominator for the calculation of Non-GAAP earnings per share and non-GAAP earnings per ADS.

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.

Impact of the Recently Adopted Major Accounting Pronouncement

The Company adopted the update of ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): “Measurement of Credit Losses on Financial Instruments” on January 1, 2020.

Upon adoption of ASC 326 on January 1, 2020, the Company used the modified retrospective transition method through a RMB6.6 million cumulative-effect increase to retained earnings, among which RMB30.9 million was related to the decrease of allowance for accounts receivables-third parties, RMB15.0 million was related to the increase of allowance for accounts receivables- related parties and RMB9.3 million was related to the increase of allowance for other receivables and other current/non-current assets. The adoption of the new guidance did not have a material impact to the Company’s consolidated financial statements.

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 March 31, 2020, which was RMB7.0808 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)

For the quarter ended

March 31, 2019

December 31, 2019

March 31, 2020

RMB

RMB

RMB

USD

Revenues from third parties

5,677,227

9,528,920

8,431,213

1,190,715

Revenues from related parties

144,821

538

52,710

7,444

Total revenues

5,822,048

9,529,458

8,483,923

1,198,159

Cost of revenues

(4,857,711)

(7,799,733)

(6,827,045)

(964,163)

Gross profit

964,337

1,729,725

1,656,878

233,996

Operating expenses:

Selling and marketing

(459,314)

(632,871)

(613,821)

(86,688)

General and administrative

(191,902)

(342,048)

(238,594)

(33,696)

Research and development

(77,378)

(91,740)

(71,784)

(10,138)

Impairment of long-lived assets

(68,262)

Total operating expenses

(728,594)

(1,134,921)

(924,199)

(130,522)

Income from operations

235,743

594,804

732,679

103,474

Interest expenses, net

(96,110)

(83,826)

(108,613)

(15,339)

Subsidy income

4,741

14,366

5,061

716

Exchange (loss)/gain

(80,980)

(14,003)

10,951

1,547

Change in fair value of interest rate swap

(30,199)

24,466

(78,878)

(11,140)

Change in fair value of foreign exchange
derivatives

18,114

91,889

(117,787)

(16,635)

Change in fair value of convertible senior
notes and call option

(67,119)

65,990

9,320

Other income/(expense), net

7,398

1,432

(2,187)

(309)

Gain on disposal of subsidiaries

19,935

Income before income taxes

58,707

581,944

507,216

71,634

Income tax benefit/(expense)

4,250

(220,993)

(109,520)

(15,467)

Equity in (loss)/gain of affiliated companies

(23,709)

31,780

(101,527)

(14,338)

Net income

39,248

392,731

296,169

41,829

Less: Net (loss)/income attributable to
non-controlling
interests

(939)

23,225

13,728

1,939

Net income attributable to JinkoSolar
Holding Co., Ltd.’s ordinary shareholders

40,187

369,506

282,441

39,890

Net income attributable to JinkoSolar
Holding Co., Ltd.’s
ordinary shareholders per share:

Basic

0.26

2.08

1.58

0.22

Diluted

0.25

1.67

0.67

0.09

Net income attributable to JinkoSolar
Holding Co., Ltd.’s
ordinary shareholders per ADS:

Basic

1.02

8.32

6.32

0.89

Diluted

1.02

6.68

2.67

0.38

Weighted average ordinary shares
outstanding:

Basic

156,888,381

177,524,685

178,743,903

178,743,903

Diluted

158,017,104

171,509,296

198,081,276

198,081,276

Weighted average ADS outstanding:

Basic

39,222,095

44,381,171

44,685,976

44,685,976

Diluted

39,504,276

42,877,324

49,520,319

49,520,319

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Net income

39,248

392,731

296,169

41,829

Other comprehensive income:

-Foreign currency translation
adjustments

(17,459)

(21,970)

45,040

6,361

-Change in the instrument-specific
credit risk

(26,579)

39,202

5,536

Comprehensive income

21,789

344,182

380,411

53,726

Less: Comprehensive (loss)/income
attributable to non-controlling interests

(939)

23,225

13,728

1,939

Comprehensive income attributable to
JinkoSolar Holding Co., Ltd.’s ordinary
shareholders

22,728

320,957

366,683

51,787

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

40,187

369,506

282,441

39,890

Change in fair value of convertible senior
notes and call option

67,119

(65,990)

(9,320)

Net interest expenses of convertible
senior notes and call option

6,281

6,128

865

Exchange (gain)/loss on convertible
senior notes and call option

(4,112)

4,664

659

Stock-based compensation
(benefit)/expense

(6,924)

(6,630)

249

35

Non-GAAP net income attributable to
ordinary shareholders

33,263

432,164

227,492

32,129

Non-GAAP earnings per share
attributable to ordinary shareholders –

Basic

0.21

2.43

1.27

0.18

Diluted

0.21

2.43

1.15

0.16

Non-GAAP earnings per ADS attributable
to ordinary shareholders –

Basic

0.85

9.74

5.09

0.72

Diluted

0.84

9.74

4.59

0.65

Non-GAAP weighted average ordinary
shares outstanding

Basic

156,888,381

177,524,685

178,743,903

178,743,903

Diluted

158,017,104

177,524,685

198,081,276

198,081,276

Non-GAAP weighted average ADS
outstanding

Basic

39,222,095

44,381,171

44,685,976

44,685,976

Diluted

39,504,276

44,381,171

49,520,319

49,520,319

JINKOSOLAR HOLDING CO., LTD.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

December 31, 2019

March 31, 2020

RMB

RMB

USD

ASSETS

Current assets:

Cash and cash equivalents

5,653,854

3,947,853

557,543

Restricted cash

576,546

793,056

112,001

Restricted short-term investments

6,930,502

7,264,341

1,025,921

Accounts receivable, net – related parties

520,504

554,836

78,358

Accounts receivable, net – third parties

5,266,351

5,312,745

750,303

Notes receivable, net – related parties

18,629

18,629

2,631

Notes receivable, net – third parties

1,529,801

1,602,390

226,301

Advances to suppliers, net – third parties

2,522,373

2,280,476

322,065

Inventories, net

5,818,789

7,147,762

1,009,457

Forward contract receivables

52,281

Prepayments and other current assets, net – related parties

54,318

52,442

7,406

Prepayments and other current assets, net

1,573,482

1,816,529

256,542

Held-for-sale assets

1,170,818

Total current assets

31,688,248

30,791,059

4,348,528

Non-current assets:

Restricted cash

531,158

643,549

90,886

Accounts receivable, net – third parties

28,848

4,074

Project Assets

798,243

818,041

115,529

Long-term investments

278,021

159,710

22,555

Property, plant and equipment, net

10,208,205

10,657,193

1,505,083

Land use rights, net

597,922

668,205

94,369

Intangible assets, net

36,395

37,167

5,249

Financing lease right-of-use assets, net

1,259,713

1,219,385

172,210

Operating lease right-of-use assets, net

317,904

284,722

40,210

Deferred tax assets

271,286

271,286

38,313

Call Option-concurrent with issuance of convertible
senior notes

294,178

197,276

27,861

Other assets, net – related parties

96,753

98,048

13,847

Other assets, net – third parties

1,466,692

1,359,510

192,000

Total non-current assets

16,156,470

16,442,940

2,322,186

Total assets

47,844,718

47,233,999

6,670,714

LIABILITIES

Current liabilities:

Accounts payable – related parties

36,310

Accounts payable – third parties

4,952,630

5,465,796

771,918

Notes payable – third parties

7,518,570

7,489,024

1,057,652

Accrued payroll and welfare expenses

879,465

780,786

110,268

Advances from related parties

749

752

106

Advances from third parties

4,350,380

3,507,328

495,329

Income tax payable

117,422

123,957

17,506

Other payables and accruals

3,055,928

3,195,399

451,279

Other payables due to related parties

13,127

13,381

1,890

Forward contract payables

3,857

90,564

12,790

Financing lease liabilities – current

227,613

243,253

34,354

Operating lease liabilities – current

40,043

38,636

5,456

Short-term borrowings from third parties,
including current portion of long-term bank
borrowings

9,047,250

9,701,037

1,370,048

Guarantee liabilities to related parties

25,688

23,776

3,358

Held-for-sale liabilities

1,008,196

Total current liabilities

31,277,228

30,673,689

4,331,954

Non-current liabilities:

Long-term borrowings

1,586,187

1,521,730

214,909

Convertible senior notes

728,216

532,111

75,148

Accrued warranty costs – non current

651,968

671,556

94,842

Financing lease liabilities

583,491

502,334

70,943

Operating lease liabilities

279,534

246,434

34,803

Deferred tax liability

250,734

250,734

35,410

Guarantee liabilities to related parties
– non current

46,332

44,409

6,272

Total non-current liabilities

4,126,462

3,769,308

532,327

Total liabilities

35,403,690

34,442,997

4,864,281

SHAREHOLDERS’ EQUITY

Ordinary shares (US$0.00002 par value, 500,000,000 shares
authorized, 180,653,497 and 179,430,857 shares issued as of
December 31, 2019 and March 31, 2020, respectively)

25

25

4

Additional paid-in capital

4,582,850

4,583,099

647,257

Statutory reserves

689,707

689,707

97,405

Accumulated other comprehensive income

62,952

147,194

20,787

Treasury stock, at cost; 1,723,200 and 2,945,840 ordinary
shares as of December 31, 2019 and March 31, 2020,
respectively

(13,876)

(43,170)

(6,097)

Accumulated retained earnings

3,981,661

4,270,710

603,139

Total JinkoSolar Holding Co., Ltd. shareholders’ equity

9,303,319

9,647,565

1,362,495

Non-controlling interests

3,137,709

3,143,437

443,938

Total liabilities and shareholders’ equity

47,844,718

47,233,999

6,670,714

Related Links :

http://www.jinkosolar.com


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