NEWS WRAP: Struggling JinkoSolar sees new potential in energy storage

The solar module maker’s shipments fell 16.7% in the third quarter, but its revenue fell by more than double that rate as its industry suffers from overcapacity and falling prices

By Doug Young

Solar module maker JinkoSolar Holding Co. Ltd. (JKS.US; 688223.SH) continued to report sharp revenue declines and remained deeply in the red in the third quarter, but offered some positive signals from sequentially improving gross margins and growth for its newer energy storage business.

JinkoSolar and its peers have been struggling for more than a year due to the industry’s huge overcapacity, sending prices plunging and plunging most companies into the red. The Chinese government has tried to support the industry by encouraging consolidation and shuttering of older capacity, but its efforts have yet to produce any significant results.

JinkoSolar said it shipped 21.57 GW of solar modules, cells and wafers in the third quarter, down 16.7% year-on-year, according to its latest quarterly report released on Monday. But its quarterly revenue fell by a far bigger 34.1% year-on-year to 16.2 billion yuan ($2.28 billion) due to weak prices, accelerating from a 25.2% decline in the second quarter. Its third-quarter net loss totaled 750 million yuan, reversing a profit of 22.5 million yuan in the year-ago period.

Despite the falling revenue and widening losses, JinkoSolar’s third-quarter gross margin of 7.3%, while down sharply from 15.7% a year earlier, represented an improvement from the second-quarter figure of 2.9% and first-quarter gross margin of negative 2.5%.

The company gave a wide range for its fourth-quarter sales forecast, saying it expects to ship between 18 GW and 33 GW for the three-month period, reflecting the industry’s current high degree of volatility.

While its core solar module business continued to suffer, the company offered a small bright spot for investors by saying its young energy storage systems business could become an important new revenue source. Such systems are an important element for solar farms, allowing them to store excess electricity produced on sunny days to sell to the grid at night and during cloudy periods.

“With scale efficiency and competitiveness improving, we expect our energy storage business to become our second growth engine and contribute to our profit in 2026,” said Chairman Li Xiande. He added JinkoSolar shipped more than 3.3 GWh of energy storage systems in the first three quarters of this year, and expected to ship 6 GWh for the whole year.

JinkoSolar’s U.S.-listed American depositary shares (ADS) rose 13.1% on Monday after the release of its latest results. The stock is up 23% this year.

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