UPDATE 3-JinkoSolar shines in gloomy market, shares rise

Tue Aug 16, 2011 11:43am EDT

* Q2 profit $1.82/ADS vs est. $1.34/ADS

* Q2 rev $350.6 mln vs est. $315.4 million

* Expects Q3 module shipments 230-250 MW; rev $310-$330 mln

* Sees Q3 ASP $1.20-$1.30/watt; $1.15-$1.25 for Q4

* Shares rise as much as 11 pct (Rewrites throughout with conference call, analyst comments, share movement)

By Krishna N Das

BANGALORE, Aug 16 (Reuters) - JinkoSolar Holding Co posted strong quarterly results and expects sales growth to hold up this year as the Chinese solar company continues to make inroads into newer regions, cheering up investors in a gloomy market.

The company's shares, which have shed 17 percent of their value so far this year, rose 11 percent to a high of $18.66 on Tuesday on the New York Stock Exchange. The wider MAC Solar Energy Index was down 2 percent.

JinkoSolar's second-quarter results are a rare bright spot in an industry that had suffered in the first half because of solar energy subsidy cuts in major markets such as Germany and Italy.

"They surprised people a lot this morning," said Avian Securities analyst Mark Bachman.

"JinkoSolar is one of the companies that has been a relative outperformer here in the fact that they have been able to bring down cost and still increase shipments," he added.

A comparatively healthy second-quarter gross margin of 25.4 percent at JinkoSolar underscores the fact China-based companies are increasingly beating foreign rivals in managing costs.

On Monday, U.S. solar company Evergreen Solar filed for bankruptcy, as its once cutting-edge technology fell victim to competition from cheaper Chinese rivals and subsidy cuts in Europe.

"We pushed deeper into the US market where we expect to see increased growth in the near future and made significant progress in increasing sales in Spain, Portugal, Australia and France," Chief Executive Kangping Chen said in a statement.

JinkoSolar has already established units in Germany and the United States, and a sales office in Italy.

France, Spain, Belgium and Portugal pulled in about a quarter of total revenue, higher than earlier, a company executive said on a conference call.

"Will undertake aggressive marketing effort to expand sales in new markets," Chief Marketing Officer Arturo Herrero said.

UNDER-PROMISE?

A decline in JinkoSolar's average selling prices (ASPs) was partly offset by a fall in polysilicon price and average manufacturing costs in the second quarter -- a trend that will likely continue.

"We anticipate polysilicon prices to trend further down into the fourth quarter," CEO Chen said on the call.

The company expects third-quarter ASPs of $1.20-$1.30 per watt. ASPs will be $1.15-$1.25 in the fourth quarter.

JinkoSolar's solar product shipments leaped 154.4 percent to 254.1 megawatts (MW) in the second quarter. Total solar module shipments are expected to be about 230-250 MW in the third.

July-September revenue is expected to be $310-$330 million. Analysts had projected a revenue of $335.3 million, according to Thomson Reuters I/B/E/S.

"They've been under-promising but over-delivering," analyst Bachman said.

JinkoSolar also backed its full-year solar module shipments outlook of 950-1,000 MW with total revenue of $1.4-$1.5 billion at a time when many in the companies in the industry have trimmed their outlooks.

SolarWorld , Germany's No.2 solar company by sales, cautioned overcapacities and falling prices for modules could hurt results in the second half, while SunPower Corp lowered its 2011 profit outlook.

JinkoSolar's April-June net income increased about 49 percent to $36.4 million, or $1.38 per American Depositary Share (ADS). Excluding items, it earned $1.82 per ADS, surpassing market estimates of $1.34 per ADS.

Total revenue more than doubled to $350.6 million, easily topping expectations of $315.4 million. (Reporting by Krishna N Das in Bangalore; Editing by Don Sebastian, Viraj Nair)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.