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JKS 14Q2 ER Online Session with Investors - Key Summary

Aug 23 2014 01:18 PM | sunnysky in Solar Stock Investing
JKS

Sebastian Liu, Director of Investor Relations at JinkoSolar Holding Co., Ltd.(NYSE:JKS), held an onlineQ&A session on 8/22/14 at xueqiu.com, answering questions from investors following the company's 2014 Q2 earnings release.
Jinko Power
  • Jinko Power is not a pure yieldco, it encompasses project development, financing, EPC, and O&M. It's more appropriate to think of it as a growth IPP. In the future, her relationship with the parent company is in module sales and support in other areas, rather than project development and transfer by the parent company.
  • Model shipment to Jinko Power will not be included in sales and continue to be capitalized into plant assets. It won't affect revenue and profit of Jinko.
  • The preparation for the Yieldco IPO is ongoing and a top focus point of the management for the second half. Both US and Hong Kong are possible locations for the IPO. There is no specific time table yet.
  • There is no plan for share offering before the IPO. The current funding is sufficient to support the development of over 800 MW projects using leverage, that is, to reach 1 GB prior to the IPO. Capital raises through other means such CBs are not excluded.
  • The 225 M capital raised will be used only for projects. Jinko will gradually develop projects overseas after the IPO. A lot of preliminary work has been carried out.
DG Development
  • The new DG policy will benefit Jinko greatly, especially on the downstream business. Module sales is also going to grow with the takeoff of the market.
  • DG is the trend of future. Jinko currently has a 600 MW pipeline. The scale of signed contracts and MOUs is even greater. The development cost is right now about YMB 7 to 7.5 per watt including modules. Jinko has been rapidly growing her DG teams, including development, financing, and engineering. Some are being outsourced.
Manufacturing
  • Jinko will use the capital used for bidding Topoint for capacity expansion. By the end of Q3, wafer, cell, and module capacities will reach 2.3 GW, 1.8 GW, and 2.8 GW, respectively.
  • Regarding to retainage, it's a convention of the past. There are not many new contracts nowadays with retainage. Jinko has a total of about $30 M retainage revenue, which is expected to be fully collected within one year and a half. H2 is expected to see $5-$8 M being paid back.
  • Regarding to the US tariffs, Jinko plans to pay the 2012 tariffs for the time being, which come to a combined rate of 29.18%. Jinko does not rule out the possibility of opening cell factories in the future overseas, including in North America. Jinko confirmed that the cost including the tariff is $0.62 (or higher). But with modules selling at $0.74-75+, it's still at quite profitable levels. In fact, it's similar to what it used to be using Taiwanese cells. (So GM is about 17% or even higher.)
http://xueqiu.com/talks/item/20122155
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1 Comments

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odyd
Sep 13 2014 06:00 PM

A bit change on Topoint plans. It seems like not an issue at least on the surface to increase the capacity. Heavy consolidation taking place in China and a lot of bidding wars. like the recent Trina bid for Tianwei assets.

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