NEWS WRAP: Profit plunges at JinkoSolar’s main China-listed unit

The solar panel maker said the profit for its 58.6%-owned Jinko Solar Co. Ltd. fell by nearly 99% in 2024 as a result of plunging prices

By Doug Young

Solar panel maker JinkoSolar Holding Co. Ltd. (JKS.US) said on Friday that the profit of its main operating subsidiary, Shanghai-listed Jinko Solar Co. Ltd. (688223.SH), plunged by more than 98% last year, as oversupply forced the company and its peers to slash their prices.

JinkoSolar said the Shanghai-listed subsidiary expects to report a profit of 80 million yuan ($11 million) to 120 million yuan last year, down nearly 99% from the previous year. Excluding one-time gains and losses, the Shanghai-listed subsidiary fell into the red with a loss of between 750 million yuan to 1.05 billion yuan for the year.

JinkoSolar, which owns about 58.6% of the Shanghai-listed company, did not provide preliminary data for its own performance last year. In the first three quarters of 2024, the U.S.-listed JinkoSolar reported its revenue fell 16.6% to 71.6 billion yuan from 85.8 billion yuan in the year-ago period. Its profit for the nine-month period tumbled 86% to 847 million yuan.

JinkoSolar’s shares fell 10% in Friday trading in New York after the announcement. The stock is down 23% over the last 52 weeks, and trades at a forward price-to-earnings (P/E) ratio of just 5.

The company and its peers have been hammered over the last year by plunging solar panel prices following a huge industrywide buildup in capacity that resulted in a massive supply glut. Reflecting the big capacity increases, JinkoSolar said last October it expected to have combined annual capacity to produce 345 GW of solar wafers, cells and modules by the end of 2024, more than triple the 101.5 GW of capacity it had three years earlier.

JinkoSolar reported its revenue fell 23% in last year’s third quarter year-on-year to 24.5 billion yuan as a result of lower prices, even though it shipped 14.7% more solar modules during the period. As its prices tumbled, the company’s gross margin slipped to 15.7% during the quarter from 19.3% a year earlier.

China produces the big majority of the world’s solar panels, as Beijing strongly encourages the industry’s development with a wide range of favorable government policies. As profits have evaporated at many companies, sending some into the red, the central government has stepped in to try and support prices by encouraging companies to idle some of their capacity.

The government intervention has helped to stabilize prices recently. Analysts expect JinkoSolar to report that its revenue fell about 20% for all of 2024. But they expect the company to return to revenue growth this year, with six analysts polled by Yahoo Finance forecasting an average 8.8% increase.

To subscribe to Bamboo Works free weekly newsletter, click here