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JinkoSolar (JKS)

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1 hour ago, Klothilde said:

Jinko losing out to rival in record-setting tender in Dubai:
http://taiyangnews.info/markets/dewas-900-mw-tender-attracts-lowest-bid-of-0-0169kwh/

Interesting the lowest bid is from ACWA the winner of the last bid even though they bid higher than Masdar/Jinko in the last round. This suggests ACWA might have be a preferred company by DEWA.

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16 hours ago, SCSolar said:

Picked me up some JKS today for a short term trade into earnings.

Good luck to you. More guts than I have right now. I’m hoping to sell half my FSLR today. Will hold the other half and see what happens tonight. 

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2 hours ago, Klothilde said:

How come Jinko doesn't inform us that they have construction on a $100M project in Mexico halted because of a lawsuit?  Is it because they have to paint a rosy picture ahead of their next secondary in early 2020?
https://www.yucatan.com.mx/merida/nuevo-proyecto-de-energia-solar

This sounds like it is a broader policy decision by the new president of Mexico. The Trumpite who wants to turn back the push for renewables and go with legacy coal and gas plants. This article seems to indicate as part of the policy, they want to get rid of private builders of power plants and have the CFE build the energy projects. That is why your article talks about both Solar and Wind projects being halted.  It also indicates in the article the dispute is over things the CFE wants done that the builders indicate they have done. This would be bad for all renewables in general if they are trying to halt the projects.

 

https://energyathaas.wordpress.com/2019/08/12/mexico-goes-backward-on-renewables/

After several successful rounds of renewables auctions under the previous administration, AMLO abruptly reversed course, canceling future auctions. Instead, AMLO is putting his support behind fossil fuels. For example, earlier this month he ordered a new natural gas combined cycle plant to be built in the Yucatan.

This is part of a broader move to pull back from Mexico’s energy reforms and return control of the sector to state-owned companies like CFE, the state-owned electric utility. AMLOs decision means moving forward there will be fewer private companies building renewables in Mexico, and more CFE-owned projects. CFE director general says, “Why should we buy power, if we can produce it?”

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Jinko reporting tomorrow you guys.  I will try and come up with a Q3 estimate later today when I'm done with the kids.

Was wondering if anyone of you has a hunch regarding their shipment guidance and outlook.  I stumbled across a few data points that make the current shipment guidance appear quite ambitious to me.  Let me explain.

If you add Q1 and Q2 shipments to the midpoint of Q3 shipment guidance you get 9773MW.  That leaves 4.2GW-5.2GW of shipments for Q4 based on their FY shipment guidance of 14-15GW.

Now according to a recent guangfu article Jinko had 700MW of exports in October:
http://guangfu.bjx.com.cn/news/20191114/1020689.shtml

This is slightly down from the 770MW of August and also down from the H1 monthly average of approx 855MW (34.2GW*15%/6):
https://en.pvinfolink.com/post-view.php?ID=239

The above is one early datapoint suggesting JKS' Q4 module exports may not be above the Q1-Q3 export rate.

In parallel we have China installations figures showing only 1.5GW of installations for October:
http://guangfu.bjx.com.cn/news/20191115/1021256.shtml

Now if you go back to the implied shipment guidance for Q4 of 4.2-5.2GW you'll notice that it is roughly 1-2 GW above the average quarterly shipment figures of Q1-Q3.
If we assume that international shipments in Q4 will stay flat relative to Q1-Q3 then the shipment surge has to come from China shipments (in fact they guided strong China shipments in H2).  However if we project the October China installations of 1.5GW for the whole quarter we end up with only 4.5GW of total installations in Q4 and the guided surge in JKS shipments of 1-2GW in Q4 would represent 22-44% of the market which imho is too much of a market share to be realistic.

I know the above is based on data from only one month out of three but it surely is enough to give me an initial vibe that they may struggle to hit their shipment guidance.

Any other vibes out there you guys?

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1 hour ago, Klothilde said:

Jinko reporting tomorrow you guys.  I will try and come up with a Q3 estimate later today when I'm done with the kids.

Was wondering if anyone of you has a hunch regarding their shipment guidance and outlook.  I stumbled across a few data points that make the current shipment guidance appear quite ambitious to me.  Let me explain.

If you add Q1 and Q2 shipments to the midpoint of Q3 shipment guidance you get 9773MW.  That leaves 4.2GW-5.2GW of shipments for Q4 based on their FY shipment guidance of 14-15GW.

Now according to a recent guangfu article Jinko had 700MW of exports in October:
http://guangfu.bjx.com.cn/news/20191114/1020689.shtml

This is slightly down from the 770MW of August and also down from the H1 monthly average of approx 855MW (34.2GW*15%/6):
https://en.pvinfolink.com/post-view.php?ID=239

The above is one early datapoint suggesting JKS' Q4 module exports may not be above the Q1-Q3 export rate.

In parallel we have China installations figures showing only 1.5GW of installations for October:
http://guangfu.bjx.com.cn/news/20191115/1021256.shtml

Now if you go back to the implied shipment guidance for Q4 of 4.2-5.2GW you'll notice that it is roughly 1-2 GW above the average quarterly shipment figures of Q1-Q3.
If we assume that international shipments in Q4 will stay flat relative to Q1-Q3 then the shipment surge has to come from China shipments (in fact they guided strong China shipments in H2).  However if we project the October China installations of 1.5GW for the whole quarter we end up with only 4.5GW of total installations in Q4 and the guided surge in JKS shipments of 1-2GW in Q4 would represent 22-44% of the market which imho is too much of a market share to be realistic.

I know the above is based on data from only one month out of three but it surely is enough to give me an initial vibe that they may struggle to hit their shipment guidance.

Any other vibes out there you guys?

Candadian Solar beat Q3 shipments guidance so it could be Q3 beats as well for Jinko. With Jinko  you are missing the color of foreign manufacturing plants.

In general though to reach low end guidance of 14GW, if they ship 3.35GW midrange they need  to ship 3.96GW

If they beat shipments in Q3 by 100MW then they only need 3.7GW for low end shipments. 

All those numbers are reachable. 

I expect net income  for Q3 to be in excess of $1 a share before forex and one timers. I expect Q4 to be similar in earnings to Q3.

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44 minutes ago, Klothilde said:

Lowering shipment guidance to 14.0-14.2GW.

Total solar module shipments for the full year of 2020 would be in the range of 18.0 GW to 20.0 GW

"With domestic demand rebounding strongly and overseas demand driven by aggressive new clean energy targets, we expect the fourth quarter and full year 2020 to generate strong growth in shipments and strengthen our overall profitability and margin profile. With the demand growing rapidly both domestically and overseas for our mono products, we have strategically decided to convey our confidence in next year's strong growth with total solar module shipments expected to be in the range of 18.0 GW to 20.0 GW for the full year 2020, an approximately 35% year-over-year increase. "

"The late announcement of the government subsidy policy for PV projects in China earlier this year delayed a large number of projects which we believe will restart during the fourth quarter and the first quarter of 2020. This delay is expected to drive strong domestic demand over the next six months, especially since China's national renewable energy information management center recently announced that it is accelerating the formulation of subsidy policies for PV projects in 2020. With the cost of solar energy now falling below that of conventional energy sources in many markets across the globe and more aggressive clean energy targets being set by governments, we are also very confident and optimistic that global demand will significantly increase next year. We currently estimate that global installations next year will be approximately 20% higher than this year."

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1 hour ago, Klothilde said:

Lowering shipment guidance to 14.0-14.2GW.

lowering high end range in not unexpected given the telegraphing of the CN markets. Guidance is strong at 4.2-4.4GW. That is 1 years production of FSLR modules.

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So they say module revenue in Q3 is 96-97% of total, that would be $1009M.
For 3326MW of module shipments that gives an ASP of $0.303.
Applying the ex-CVD/AD GM of 18.5% that gives a cpw of $0.247/W.

Are we all ok with these numbers?

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2 minutes ago, Klothilde said:

So they say module revenue in Q3 is 96-97% of total, that would be $1009M.
For 3326MW of module shipments that gives an ASP of $0.303.
Applying the ex-CVD/AD GM of 18.5% that gives a cpw of $0.247/W.

Are we all ok with these numbers?

That is specifically JKS number. Do not apply it to all T1 companies. As CSIQ noticed in the latest CC: Sale condition vary from company to company. And CSIQ is known for selecting only most beneficial sales deals. So, No, there is no agreement with your statement.

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1 hour ago, Klothilde said:

Are we all ok with these numbers?

They made nearly a buck a share in Q3.  They're guiding for better results, not worse, in Q4.  All this during what are supposed to be life-threatening business conditions according to you.

Yeah, I'm OK with THOSE numbers.

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1 hour ago, Mark said:

Congrats on the earnings trade, SCSolar.  

Thanks but don't pat me on the back, I locked in  a slight profit as I sold out after CSIQ earnings and the General market drift lower for solars due to that(bummer).

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2 hours ago, solarpete said:

They made nearly a buck a share in Q3.  They're guiding for better results, not worse, in Q4.  All this during what are supposed to be life-threatening business conditions according to you.

Yeah, I'm OK with THOSE numbers.

Please stop trashing me with falsehoods.  You know perfectly well that I forecasted higher margins in Q4.
https://solarpvinvestor.com/topic/8-solar-news/page/708/?tab=comments#comment-100327

 

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6 hours ago, solarpete said:

"...things will stay nasty for a long while...."

Your exact words.

Again, you are misrepresenting my statements, I said clearly that I expected margins to improve in Q3-Q4 and then decrease into the new year.

With JKS I was right up til now as margins improve in Q4 and we don't know about 2020 yet.

With CSIQ I was right about margins decreasing in 2020, however they did not see a margin increase in Q4 as their margins started deteriorating earlier than I anticipated.

So please stop trashing people here with falsehoods.

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JKS should see declining margins in 2020 just like CSIQ.  That's just the result of the latest price drop for mono-PERC modules from around 26-27 cts in Q3 to 23-24 cts in Q4 with upstream components staying mostly flat.

In Q3 they were running OPEX&INT to the tune of 14.0% of revenue.  That's with an ASP of around 30 cts.  As soon as that ASP drops to 24 cts their OPEX&INT threshold jumps to 17.5% or just slightly below what their ex CVD/AD GM is right now.

Put declining GM in H1 together with a rising OPEX/INT threshold and you get a significant drop in earnings.

Jmho.

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On 11/19/2019 at 8:48 AM, Klothilde said:

So they say module revenue in Q3 is 96-97% of total, that would be $1009M.
For 3326MW of module shipments that gives an ASP of $0.303.
Applying the ex-CVD/AD GM of 18.5% that gives a cpw of $0.247/W.

Are we all ok with these numbers?

 

Those numbers might be considered reasonable for Q3. Looking at Q4

Margins  18%-20.5%

Revenues 1.17B-1.23B

modules 4.2GW-4.4GW.

96% revenue modules again

ASP = $0.27-$0.277

Cost = $0.22-$0.2215.

 

If you take a .305 ASP Q3

Q4 ASP = $0.035*.9=$0.275

Q4 Costs = $0.275*0.795=$0.218 for low end cost

Q4 Costs = $0.275*(.795)= $0.225 high end cost

 

.

They are targeting 20-25% GM for internal production next year.

They suggest 16GW of internal production.

They suggest market is growng >20% in 2019

Estimated market growth 24-30GW

15% market share of new growth = 3.6GW low end 4.5GW high end.

 

2020 Internal production 16GW(4GW per Q avg)

A continued decline of 15% through the year places an ASP

Avg ASP = $0.2745*0.85=$0.233

Internal Cost low = $0.233*.75 = $0.175

Internal High Cost = $0.233*.1866

Revenue = 16GW*.233= $3.73B

20% Internal margin Gross = $744M

25% Internal margin Gross = $933M

2GW added Opex = $40M

$500M(2019Opex)+ $40M = $540M

Interest $65M

Opex/Interest = $540+$65=$605M

Profit before taxes and adjustments low end $744-$605 = $139M

Profit before taxes and adjustments High end = $933-$605 = $328M

Internal production Average Gross =  $235M

 

My comments: This internal production costs sound quite reasonable of $0.175-$0.186. That higher end range is a penny below a CSIQ indicated cost for 2 quarters or so ago before Poly drops.

 

Juicy profit upside for a $17/share price I might say as that does not have any project sales included or 1.6 -2.5GW  3rd party purchase sales.

 

 

 

 

 

 

 

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18 hours ago, Klothilde said:

you are misrepresenting my statements

????

I'm QUOTING your EXACT words.

Your pattern is well-known:  this quarter is gonna be lousy.  Oh, wait--this quarter was actually pretty good.  Well, NEXT quarter will be lousy.  Oh, wait, guidance for next quarter is actually pretty good.  OK, then, next YEAR will be lousy.

Yeah, yeah, yeah.  Looks to me like DQ, CSIQ, and JKS finally are figuring out how to make money consistently even in lousy market conditions (lousy by your definition, anyway).  Probably because of the effect of scaling--produce and sell enough, and even slim margins lead to profits.

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Good calcs.  I personally don't think that they will be able to reap 20-25% GM internally and reduce in-house costs 15% yoy so my results wouldn't be as rosy.

You've been referring to the 20 cts in-house cost of CSIQ repeatedly.  What's your source?  Cuz the indication in the 20F is clearly 3rd party purchase cost:

"...Our solar module manufacturing costs in China, including purchased polysilicon, wafers and cells, decreased from $0.33 per watt in December 2016, to $0.32 per watt in December 2017 and to $0.20 per watt in December 2018...."

 

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11 minutes ago, solarpete said:

????

I'm QUOTING your EXACT words.

Your pattern is well-known:  this quarter is gonna be lousy.  Oh, wait--this quarter was actually pretty good.  Well, NEXT quarter will be lousy.  Oh, wait, guidance for next quarter is actually pretty good.  OK, then, next YEAR will be lousy.

Yeah, yeah, yeah.  Looks to me like DQ, CSIQ, and JKS finally are figuring out how to make money consistently even in lousy market conditions (lousy by your definition, anyway).  Probably because of the effect of scaling--produce and sell enough, and even slim margins lead to profits.

Bye pal, I'm not dealing with trolls anymore.  Good luck with your trades.

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I smell a rat here you guys but maybe there is no rat and it just has to do with the bad translation of google.

Is there somebody who speaks mandarin and knows a little bit of accounting so we can shed some light on the rat please.

What I get from the article is that the Chinese SEC is requesting some information from Jinko Power ahead of a possible IPO.  The questions asked relate to performance penalties of some sort and to financial inconsistencies in their financial statements.  Explicitly the mismatch between net profit and net cash flow is questioned as is the very low level of provisions for bad debt for their high receivables account.

Again, I could be wrong with the above so guys help me please.  I just wanted to throw this in here because we all know that if Jinko Power goes down so does JKS.

http://guangfu.bjx.com.cn/news/20191125/1023476.shtml

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15 minutes ago, Klothilde said:

I smell a rat here you guys but maybe there is no rat and it just has to do with the bad translation of google.

Is there somebody who speaks mandarin and knows a little bit of accounting so we can shed some light on the rat please.

What I get from the article is that the Chinese SEC is requesting some information from Jinko Power ahead of a possible IPO.  The questions asked relate to performance penalties of some sort and to financial inconsistencies in their financial statements.  Explicitly the mismatch between net profit and net cash flow is questioned as is the very low level of provisions for bad debt for their high receivables account.

Again, I could be wrong with the above so guys help me please.  I just wanted to throw this in here because we all know that if Jinko Power goes down so does JKS.

http://guangfu.bjx.com.cn/news/20191125/1023476.shtml

I was just reading that. They are trying to do an IPO to raise cash. In review of the filings, they have come under scrutiny for bad accounting. They suggest that the accounts receivables are now $532M USD yet the reserves for bad receivables is only $68M. They indicate that disclosure is  far below the peers ratio of  AR reserves for delinquent receivables.

 

Jinko Solar is still the guarantor of nearly $600M in debts of Jinko Power

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