Jinkosolar shrugs off the effect of Coronavirus as it moves to monocrystalline solar module production
Jinkosolar has shrugged off the impact of the Covid-19 Coronavirus as it moves production entirely to monocrystalline solar module technology in 2020.
The company is one of the largest solar module manufacturers in the world and will have shifted all its production to monocrystalline wafer production by April this year with a capacity of 18GW.
Total solar module shipments last year were 14.3 GW, up 25 per cent from 11.4 GW for 2018. This brought in RMB29.75bn (US$4.27bn), an increase of 18.8 per cent from RMB25.04bn year-on-year. This came from an increase in the shipment of solar modules, which was partially offset by a decline in the average selling price. The gross margin, a key figure for solar modules, was 18.3 per cent, compared with 14.0 per cent the previous year.
Income from operations was RMB1.73bn (US$248.4m), compared with RMB644.9 million for full year 2018.
“Module shipments during the [fourth] quarter were 4,538 MW, an increase of 36% sequentially and 25% year-over-year,” said Kangping Chen, CEO of JinkoSolar . “Total revenues during the quarter were US$1.37 billion, an increase of 27% sequentially and 23% year-over-year, while gross profit hit US$250 million. We are benefitting from the rapid expansion of our mono wafer production capacity during the second half of 2019 and our industry-leading integrated cost structure, which has ideally positioned us to drive growth throughout full year 2020 where we expect solar module shipments to increase by approximately 35%.”
“2019 marked a significant milestone in our corporate history in which we successfully completed our transformation into the most competitive solar manufacturer in the world. A number of emerging markets are flourishing with many of them approaching gigawatts levels, which we believe reflects the direction the market is headed with demand diversifying globally instead of concentrating in a few large markets.”
“We believe global demand in 2020 will continue its strong growth momentum with newly added installations expected to reach 140GW to 150GW, an increase of around 20 per cent year-over-year,” he added.
Next: Installations in Europe
New installations in Europe of monocrystalline solar module technology doubled in 2019 while the average selling price (ASP) in the US remained high as a result of constrained supply.
“The subsidy in China for 2020 is finalized earlier in the year than was done last year which will allow more time for project development planning and installation and is expected to result in a higher overall completion rate,” said Chen. “A number of projects from 2019 will likely be delayed into 2020 which we expect will result in total installations in China reaching 40GW to 50GW for full year 2020, an increase of about 50 per cent year-over-year. With grid parity rapidly approaching in many markets, the long-term growth potential of the industry is rapidly opening up.”
“The outbreak of COVID-19 across China affected certain raw materials supply and logistics during the first quarter of 2020, causing some module shipments be postponed to the second quarter of 2020. In response to the outbreak, we implemented a number of initiatives to ensure business continuity, including ensuring the safety and health of our employees and minimizing the impact of the outbreak on production and delivery by stocking up on critical raw materials and optimizing production and logistics. Our supply chain and logistics were temporarily affected by the outbreak early in the first quarter of 2020 but has improved significantly. Our current capacity utilization rate has already recovered to 100 per cent. We estimate that approximately 400 MW to 500MW of our solar module shipments in the first quarter will be postponed to the second quarter, causing shipments in the second quarter to increase significantly. We believe our shipments and capacity expansion plans for the full year 2020 will not be impacted by the outbreak.”
One of the drivers for the move to monocrystalline solar module production was that the bifacial technology reached a record efficiency of 22.49 per cent, breaking the previous world record and setting a new industry standard for efficiency of mass produced solar cells. These results were verified during testing conducted by TÜV Rheinland.
“The competitiveness of products in the market today is driven by the technologies they incorporate. We increased our investments into R&D in 2019 which resulted in our products breaking world records of cell efficiency and module output twice in June 2019 and once in January 2020. We believe our ability to consistently drive technological breakthroughs coupled with our expanding production capacity for high efficiency products will continue to drive down manufacturing costs,” said Chen.
Next: 2020 monocrystalline solar module forecasts
For the first quarter of 2020, the Company expects to ship 3.4 GW to 3.7 GW of monocrystalline solar modules worth US$1.00bn to US$1.08bn with the gross margin increasing to between 19 and 21 per cent.
For full year 2020, the Company estimates total monocrystalline solar module shipments to be in the range of 18 GW to 20 GW with a capacity for mono wafer, solar cell and solar module production capacity of 19.0 GW, 11.0 GW (including 900 MW N-type cells) and 25.0 GW, respectively.
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