JinkoSolar Holding Co. Ltd.
) reported its third quarter 2012 results. Adjusted loss per
American Depositary Share ("ADS") was 20 cents, narrower than the
Zacks Consensus Estimate of a loss of 73 cents. Loss was also
well below the year-ago adjusted loss per ADS of $1.62.
Each "ADS" represents four ordinary shares. Adjusted loss per
share was 5 cents versus a loss of 41 cents per share in the
Including the expenses related to the issuance of the company's
convertible senior notes, changes in the fair value of the
convertible senior notes and capped call options, interest
expenses on the convertible senior notes, and the exchange gains
on the convertible senior notes and capped call options, GAAP
loss per "ADS" was 39 cents, lower than the loss of $1.86 in the
third quarter of 2011.
JA Solar's revenues in the reported quarter were $221.1 million,
missing the Zacks Consensus Estimate of $231 million. Revenues
increased 12.2% quarter over quarter driven by an increase in the
sales volume of the solar modules. It was, however, partially
offset by a decline in the average selling prices of the solar
modules. However, revenues decreased 22% year over year.
Total shipments in the third quarter of 2012 were 335.2 megawatts
("MW"). This represents an 11.0% increase from 302.1 MW in the
second quarter of 2012 and 30.1% rise from 257.7 MW in the third
quarter of 2011. Of the total shipments, 280.0 MW were solar
modules, 28.6 MW were silicon wafers, and 26.6 MW were solar
Gross profit in the third quarter of 2012 was $21.9 million
compared with a gross profit of $16.3 million in the second
quarter of 2012 and $10.4 million in the third quarter of 2011.
Gross margin was 9.9% in the third quarter of 2012 compared with
8.4% in the second quarter of 2012 and 3.7% in the third quarter
Total operating expenses in the third quarter of 2012 were $30.1
million, up sequentially from $29.3 million. However, it was
below than the year-ago figure of $41.3 million. The operating
expenses of the reported quarter represent 13.6% of total
Net interest expense in the quarter under review was $8.2
million, down from $8.6 million in the year-ago quarter.
Operating loss in the third quarter of 2012 was $8.2 million
compared with an operating loss of $13 million in the second
quarter of 2012 and an operating loss of $30.9 million in the
third quarter of 2011. Operating margin was negative 3.7% in the
third quarter of 2012 compared with a negative 6.7% in the second
quarter of 2012 and a negative 11.1% in the third quarter of
Net loss was $8.7 million compared with a net loss of $48.9
million in the second quarter of 2012 and net income of $10.7
million in the year-ago quarter.
JA Solar at the end of the reported quarter had cash and cash
equivalents and restricted cash of $54.9 million, down from $97.2
million at the end of June 30, 2012. Capital expenditures made by
the company were $4.4 million versus $6.9 million in the year-ago
As of September 30, 2012, total short-term borrowings that
include the current portion of long-term bank borrowings were
$341.4 million compared with $366.5 million at the end of June
30, 2012. Total long-term borrowings were $43.8 million compared
with $43.3 million in the year-ago quarter.
JA Solar expects its cell and module shipments to be in the range
of 250 MW and 300 MW in the fourth quarter of 2012. By the end of
full-year 2012, the company expects in-house annual silicon
wafer, solar cell and solar module production capacity to be
approximately 1,200 MW.
Though the company reported loss, it was narrower than the Zacks
Consensus Estimate. However, revenue missed the Zacks Consensus
Estimate. Going forward, demand for solar products is promising
and with its focus on cost reduction and geographical
diversification, the company will be able to meet the demand.
Moreover, the company's strong relationships with its clients and
capability to manage business prudently will drive future growth.
However, we are concerned about the rising competition, decline
in average selling prices of photovoltaic ("PV") products, the
financial stability of customers and the oversupply of solar
cells in the near term. The company presently retains a
short-term Zacks #3 Rank (Hold).
JinkoSolar Holding Co., Ltd. is a leading solar power product
manufacturer with production operations in Jiangxi and Zhejiang
Provinces in China and sales and marketing offices in Shanghai
and Beijing, China; Munich, Germany; Bologna, Italy; Montpellier,
France; Zug, Switzerland; San Francisco, U.S.; Queensland,
Australia; Ontario, Canada and Singapore. JinkoSolar has built a
vertically integrated solar product value chain with an
integrated annual capacity of approximately 1.2 GW each for
silicon wafers, solar cells and solar modules as of September 30,
2012. JinkoSolar distributes its photovoltaic products to a
diversified customer base in the global PV market, including in
Germany, Italy, Belgium, Spain, the United States, France,
Eastern Europe, China and other countries and regions.
The company mainly competes with
JA Solar Holdings Co. Ltd. (
Suntech Power Holdings Co. Ltd.
JA SOLAR HOLDGS (JASO): Free Stock Analysis
JINKOSOLAR HLDG (JKS): Free Stock Analysis
SUNTECH PWR HLD (STP): Free Stock Analysis
To read this article on Zacks.com click here.