JinkoSolar cuts capacity expansion plans in 2021 as price volatility kicks in
JinkoSolar has downgraded its capacity expansion plans for 2021 due to the supply chain and prevailing market conditions.
The member of the Solar Module Super League (SMSL) revealed in its first quarter 2021 results release that it has revised its capacity expansion plans for this year, confirming that wafer production capacities of Manufacturer’s solar cells and modules are expected to reach 30 GW, 24 GW and 32 GW. by the end of this year respectively.
This is a downward revision of the capacities planned when JinkoSolar’s financial results are released for the year 2020. The company previously planned to end 2021 with production capacities of wafers, cells and solar modules. of 33 GW, 27 GW and 37 GW respectively.
JinkoSolar said it revised its capacity expansion plans for this year after “taking into account supply chain and market conditions”, including indicating increased polysilicon and logistics costs forcing companies to increase module prices, dampening end market demand.
However, the company confirmed that it expects demand to return in the second half of this year and reaffirmed the 25-30 GW module delivery forecast it provided at the start of the year.
Jinko’s gross margin for the period considered was also higher than expected – 17.1% instead of the 12-15% forecast at the start of the year – but the company still expects the annual gross margin to rise. is in the 12 – 15% range. Nevertheless, Jinko’s margins have contracted in recent periods: the manufacturer reported a margin of 19.5% in the first quarter of 2020.
JinkoSolar recorded 4,562 MW module shipments in the three-month period ended March 31, 2021, up 33.7% year-over-year, with an additional 792 MW of cell shipments solar cells and platelets also recorded in the first quarter.
This contributed to revenue of 7.94 billion RMB ($ 1.21 billion), down 6.4% year-on-year, while gross profit fell 18% to 207 million. dollars, indicating the significant impact of commodity price volatility on solar power manufacturers in the first three months of the year.
This performance led the company to report an overall net loss of $ 33.7 million in the first quarter of 2021, down 21.7% year-over-year.
Xiande Li, Chairman of the Board and CEO of JinkoSolar, said the company’s strategy is to carefully manage its supply chain throughout the period, focusing on improving manufacturing processes. to ease the pressure on costs.
“During the first quarter, the imbalance between polysilicon supply and strong downstream demand as well as many other factors continued to increase module prices in addition to many factors, but we believe this impact on downstream customers is temporary, ”he added.
Li also said the company will adjust its production volumes and shipping structure based on market conditions to reduce the price impact on profitability. While Jinko did not give any specific figures for its utilization rate either in the results disclosure or in its call to analysts, Gener Miao, the company’s chief marketing officer, told analysts that even though the price of polysilicon remains High, he expected that manufacturers’ utilization rates would be higher in H2 than in H1.
Meanwhile, JinkoSolar also confirmed that it has completed construction of a high efficiency stratified perovskite cell technology platform that it believes is expected to produce a breakthrough cell conversion efficiency of over 30% over the course of next year. No further details were provided during the presentation, but again, Miao provided analysts with additional color, stating that he was confident that the perovskite cell technology would not be ready for commercial production until three to three. five years.