JinkoSolar Projects 98.9% Profit Drop for 2024

• JinkoSolar predicts a staggering 98.92% plunge in net profit for Jiangxi Jinko in 2024, squeezed by oversupply and fierce competition in the global solar market.

JinkoSolar Holding Co Ltd, the Chinese solar module manufacturer, forecasts a staggering decline in net profit for its majority-owned subsidiary, Jiangxi Jinko, projecting a drop of up to 98.92% in 2024 due to declining prices and oversupply in the global solar market. Preliminary results anticipate net income attributable to shareholders between CNY 80 million and CNY 120 million, drastically down from previous levels. Without extraordinary gains or losses, the subsidiary is expected to incur a net loss of CNY 750 million to CNY 1.05 billion.

The company attributes its challenging performance to heightened competition, falling prices, and increased trade protectionism in overseas markets. Additional setbacks included fire incidents and the closure of outdated production capacity. Looking ahead, JinkoSolar remains hopeful for 2025, expecting a market correction as supply and demand become more balanced and uncompetitive operations are phased out. JinkoSolar retains a 58.59% stake in Jiangxi Jinko, which went public in early 2022, raising CNY 10 billion.

What factors are impacting Jiangxi Jinko's anticipated profit decline in 2024?

Several factors are anticipated to impact Jiangxi Jinko's profitability for 2024 significantly. These factors include:

• Global Oversupply: There is an excess of solar modules available in the market, resulting in intensified competition and lower prices, which directly affect profit margins.
• Declining Solar Prices: The continuous decrease in solar module prices has led to a tough market environment, shrinking revenue for manufacturers like Jiangxi Jinko.
• Increased Competition: The influx of new entrants in the solar manufacturing space and aggressive pricing strategies from competitors exacerbate the pressure on profit margins.
• Trade Protectionism: Rising trade barriers and tariffs in key export markets limit Jiangxi Jinko's ability to reach certain international customers, impacting sales volumes.
• Operational Setbacks: Recent fire incidents at production facilities have caused disruptions and raised operational costs, further compounding financial challenges.
• Outdated Production Capacity: The company has had to close down older, less efficient production facilities, which not only reduces output temporarily but also involves additional costs related to transitioning to newer technologies.
• Lower Demand from Key Markets: Fluctuations in demand for solar panels, particularly in major consuming countries, can significantly affect sales forecasts and revenue for Jiangxi Jinko.
• Regulatory Changes: Potential changes in government policies regarding renewable energy incentives, subsidies, or regulations might influence market dynamics and company performance.
• Economic Factors: Broader economic conditions, such as inflation and fluctuations in currency exchange rates, can impact material costs and international competitiveness.
• Investment in New Technologies: While necessary for long-term viability, the costs associated with research and development of innovative solar technologies may temporarily strain financial resources.

By considering these factors, stakeholders can gauge the multifaceted challenges Jiangxi Jinko faces as it navigates through what is projected to be a difficult 2024.