Jinko Solar jumps up 2 spaces to become the 3rd largest solar module shipper in the world
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March 9, 2015Jinko Solar becomes third largest Solar Module Shipper
Jinko Solar using its ultra low cost advantage has become the 3rd largest module shipper in the world, shipping almost 2900 MW of solar modules last year. The company has jumped up 2 places from 5th to the 3rd position and may displace Yingli as the second biggest in 2015. The company has forecasted a ~20% increase in shipments in 2015, with average guidance of 3.5 GW of solar modules production. This includes both modules for internal consumption for power projects, as well as 3rd party shipments. Like other major solar companies Jinko too is increasing its focus on large solar projects development to increase revenues and profits.
Read more about Jinko Solar panels here.
The company is the lowest cost manufacturer of PV silicon solar panels allowing it to generate more than $100 million in net profits last year, even as many other solar companies kept losing money due to low margins and the cutthroat nature of the solar industry. The last downturn saw many of the inefficient companies in China such as Suntech and LDK go bankrupt. Though these companies have been bought over and are still running, they are not as competitive now. The main competitors to Jinko are Trina Solar and Canadian Solar, which have surged ahead of the Chinese solar companies. Hanergy is another company but its lofty valuation base on low shipments make me doubtful about whether it is the genuine product or not. There are other large state owned Chinese companies such as Bluestar, which also have significant financial and operational capabilities in solar energy.
The company reported another quarter of 20% plus gross margin, which is very good considering the commoditized nature of solar panel production. The company has also not increased its production capacity conserving money and using other Tier 3 idle Chinese capacity on an OEM basis.
Jinko Solar is set to expand its 3.2 GW module capacity to around 4 GW by setting up a manufacturing facility in South East and slightly increasing its Chinese based. The SE Asian facility will help the company bypass the US sanctions on Taiwan and Chinese made solar cells and modules. Jinko Solar is set to spend around $100 million on capex to expand this capacity. Jinko Solar like others remain capital constrained in the low margin and high growth business
Jinko Solar should continue to expand in-line with the growth of the global solar industry, which looks to increase by 15-20% every year as solar prices have reached grid parity in many places around the world.
