News Summary: Struggling Jinko Solar hopes the energy storage business will bring new momentum

This solar module manufacturer saw a 16.7% decline in shipments in the third quarter, but the revenue drop was more than doubled, reflecting that the industry is deeply trapped in the dilemma of overcapacity and price collapse.

Yang Ge

Solar module manufacturer Jinko Solar Co., Ltd. (JKS.US; 688223.SH) continued to experience a significant decline in revenue and was deeply in the red in the third quarter, but its gross margin improved quarter-on-quarter, while the growth of its energy storage business also brought positive signals to the company.

Jinko Solar and its peers have faced severe challenges over the past year due to serious overcapacity in the industry, leading to plummeting prices and causing most companies to incur losses. The Chinese government has attempted to support the market by promoting industry consolidation and shutting down backward capacity, but significant results have yet to be seen.

In the latest quarterly report released on Monday, Jinko Solar stated that its shipments of cells, modules, and wafers in the third quarter amounted to 21.57 gigawatts (GW), a year-on-year decline of 16.7%. However, due to weak prices, quarterly revenue plummeted 34.1% year-on-year to 16.2 billion yuan (2.28 billion USD), further widening the decline from 25.2% in the second quarter. The company's net loss in the third quarter reached 750 million yuan, compared to a net profit of 22.5 million yuan in the same period last year.

Despite the decline in revenue and the widening loss, Jinko Solar's gross margin in the third quarter was 7.3%, which, although far lower than 15.7% in the same period last year, showed significant improvement from 2.9% in the second quarter and negative 2.5% in the first quarter.

The company pointed out that the expected range for shipments in the fourth quarter is quite large, between 18 GW and 33 GW, reflecting the current high volatility in the industry.

Although the core solar module business still faces pressure, the company released a highlight to investors: its emerging energy storage system (ESS) business is expected to become an important source of revenue. Energy storage systems are crucial for photovoltaic power plants, as they can store excess electricity generated on sunny days for resale to the grid at night or on cloudy days.

Jinko Solar Chairman Li Xian De stated, "With the improvement of scale effects and competitiveness, we expect the energy storage business to become the company's second growth engine and start generating profits for the company in 2026." He added that the company has shipped more than 3.3 GWh of energy storage systems in the first three quarters of this year, and expects total shipments for the year to reach 6 GWh