Hello, ladies and gentlemen, and thank you for standing by for JinkoSolar Holding Co., Ltd. Second and Third Quarter 2025 Earnings Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. As a reminder, today's conference call is being recorded. I would now like to turn the meeting over to your host for today's call, Ms. Stella Wang. JinkoSolar's Investor Relations. Please proceed, Stella.

Thank you, operator. Thank you, everyone, for joining us today for JinkoSolar's second and third quarter 2025 earnings conference call. The company's results were released earlier today and are available on the company's IR website at www.jinkosolar.com as well as on newswire services. We have also provided a supplemental presentation for today's earnings call, which can also be found on the IR website. On the call today from JinkoSolar are Mr. Li Xiande, Chairman and CEO of JinkoSolar Holding Co., Ltd., Mr. Gener Miao, Chief Marketing Officer of JinkoSolar Holding Co., Ltd., and Mr. Charlie Cao, CFO of JinkoSolar Holding Co., Ltd. Mr. Li will discuss JinkoSolar's business operations and company highlights, followed by Mr. Miao, who will talk about the sales and marketing, and Mr. Cao will go through the financials. They will all be available to answer your questions during the Q&A session that follows. Please note that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our future results may be materially different from the views expressed today. Further information regarding this and other risks is included in JinkoSolar's public filings with the Securities and Exchange Commission. JinkoSolar does not assume any obligation to update any forward-looking statements except as required under applicable law. Now it's my pleasure to introduce Mr. Li Xiande, Chairman and CEO of JinkoSolar Holdings. Mr. Li Xiande will speak in Mandarin, and I will translate his comments in English. Please go ahead, Mr. Li.

In the first three quarters of 2025, our global module shipments totaled 61.9 gigawatts, once again ranking number one worldwide. Driven by our outstanding product performance and a strong presence in high-value overseas markets, gross margin improved sequentially for two consecutive quarters to 2.9% in the second quarter and 7.3% in the third quarter. Net loss continued to narrow sequentially. We are pleased to see that our intensive efforts devoted to storage R&D in the past two years started to bear fruit gradually. In the first three quarters, our cumulative energy storage system (ESS) shipments exceeded 3.3 gigawatt-hours, increasing significantly for two consecutive quarters. This, combined with the rising share of overseas markets, has helped the profitability of our energy storage business improve noticeably. Considering that energy storage products have the process of installation, commissioning, and acceptance, there will be a lag in revenue recognition in our financial statements. We are confident that as economies of scale accelerate and competitiveness continues to improve, our energy storage business will more than double next year. Its revenue contribution is expected to rise significantly and it serves as a key driver of our overall gross margin expansion. In the second and third quarters, we continued to keep moderate utilization rates at a reasonable level. Since the third quarter, prices of polysilicon wafers and cells have all risen, and module prices showed some upward trends. Given that bidding rules in all provinces are still in the implementation phase, central and state-owned enterprises need some time to recalculate their IRR returns and adjust their business model for any project. It is expected that demand will take some time to release. However, we have seen some positive signals in the raw material segment. Supported by rising raw material prices, module prices in overseas markets have also…

Total shipments were 21.5 gigawatts in the third quarter, with module shipments up 9.93%. By the end of the third quarter, we became the first module manufacturer in the industry to achieve cumulative global module shipments of 370 gigawatts, with total cumulative shipments of the Titanium Series surpassing 200 gigawatts, the best-selling module series in history. In terms of geographic mix, in the third quarter, we focused on higher-value overseas markets, with shipments accounting for over 65%, achieving strong growth in Asia Pacific, emerging markets, and Europe. Shipments to the US were nearly 1.3 gigawatts, doubling against the backdrop of electricity market reform. Customer demand for high-power products continues to rise. Our high-power Titanium 3.0 series, with its high bifaciality rate of 85% and excellent low-light performance, can generate stable electricity during long, dark, and cloudy weather, effectively extending power generation hours. At the same time, in a market environment with increasing volatility in electricity prices, the outstanding power generation performance of Titanium 3.0 enables more power generation during peak price periods in the morning and evening, creating higher yield and more reliable returns for clients. According to our outdoor field test data, in Chengdu, China, under low-light conditions such as dawn and dusk, Titanium achieves a 7.2% gain compared to PERC products. And in Kagoshima, Japan, Titanium shows a 10.79% gain over PERC products in low-light conditions. In the third quarter, we delivered some high-power products that carried a 1 to 2 US cents premium compared to conventional products. We expect that our highest power, the Titanium 3.0 product with max 670 watts, will be produced on a large scale next year, further strengthening our competitiveness on the product side. We once again topped the PV Tech 2025 module test and reliability report with a triple-A rating, thanks to…

Thank you, Gener. We are pleased that our focus on high-performance products and high-value markets, as well as our efforts in cost and expenses control, have delivered steadily improved financial results. Gross profit margin turned positive in the second quarter and continued to improve by 4.4 percentage points in the third quarter. Net loss and adjusted net loss narrowed sequentially for two consecutive quarters. Operating cash flow was $340 million in the third quarter, improving significantly quarter over quarter. Operating cash flow is expected to be positive for the full year 2025. Moving to the details in the third quarter, total revenue was $2.27 billion, down 10% sequentially and 34% year over year. The sequential decrease was mainly due to a decrease in solar module shipments, and the year-over-year decrease was primarily due to a decrease in the average selling price of solar modules. Gross margin was 7.3%. The sequential improvement was mainly due to a lower unit cost of products sold, and the year-over-year decrease was mainly due to a decrease in ASP of solar modules. Total operating expenses were $363 million, up 36% sequentially and down 32% year over year. The sequential increase was due to an increase in the impairment of long-lived assets, while the year-over-year decrease was mainly due to a decrease in shipping costs as our solar module shipments decreased and the average freight rate declined during the third quarter this year. Total operating expenses accounted for 16% of total revenues, compared to 10.6% in the second quarter and 15.4% in the third quarter last year. Operating loss margin was 8.7%, compared with an operating loss margin of 10.7% in the second quarter this year and an operating profit margin of 0.3% in the second quarter last year. Moving to the balance sheet, at the…

This concludes our prepared remarks.

We are now happy to take your questions. Operator, please proceed.

Thank you. If you wish to ask a question, please press 1 on your telephone, and wait for your name to be announced. If you wish to cancel your request, please press 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Philip Shen with ROTH Capital Partners.

Hi, everyone. Thank you for taking my questions. First one is on your gross margins. Can you share some color on what you see as the difference between yours and Canadian Solar? They reported recently 15%. You guys have Q3 gross margins at about 7%. And what was the main driver you think for that underperformance? And then can you provide some color on the storage and solar gross margin difference? And then finally, what do you think margins look like for Q4?

Thanks, Philip. And I think compared to our peer, particularly Canadian Solar, the gross margin difference is, you know, the different revenue contribution from the energy storage business. But if you look at Jinko, you know, quarter by quarter, we did improve gross margin dramatically. It's coming from the majority, you know, the module business. But for the energy storage sectors, we did want to have a, you know, very, very positive update. I think in the prepared remarks of Chairman Li, we think, you know, our energy storage business is really for the, you know, dramatic growth in next year, 2026. And we are expecting significant revenue contributions and gross margin expansions. You know, the storage is really, you know, in supply shortage. And this year, we shipped around 6 gigawatt-hours, you know, shipments. And next year, we expect to double, at least double. And in terms of the revenue recognition, it's a little bit different because, you know, the revenue is recognized, you know, for the shipments. With the final acceptance, it's a little bit delayed one quarter to two quarters. And for the energy storage business, the gross margin is at a decent level. We expect at least 15% to 20% gross margin. And, you know, looking forward, particularly for the ESS business out of China, we target 70% to 80%, you know, ESS business next year. And in terms of revenue contribution from the energy storage business, we expect 10% to 15%. I mean, you know, the rough revenue from ESS business compared to the total revenues of Jinko next year. So it's a very, you know, we are actually, we think our business is shifting from purely module business to module plus ESS next year.

Great, Charlie. Thank you very much for the color. And can you share also a little bit more color on your view? You've given us some color on the storage market. You shared that next year could be six gigawatt-hours. What might the geographic shipment mix be for 2026? And how much to the US, how much to China, and then maybe Europe and others? Thanks.

Yes, yes. This year is six gigawatt-hours, and next year is double, okay? That is the total volume. In terms of geographical distributions, non-China, roughly think 70% to 80%, including the United States. And in the United States, we are in discussions with a lot of potential customers and developing, and we believe, you know, step by step, we are getting more and more orders from the US. We have a strong pipeline, particularly, I think, from Europe, Latin America, and Asia Pacific.

Got it. Okay. Great. Thank you. Shifting over to one more question here. On the foreign entity of concern for the US, FIEC. Can you help us understand you plan to have a big business shipping US, sorry, shipping solar modules to the US. Now you plan to ship batteries also to the US. Can you help us understand how you plan to comply with foreign entity of concern requirements for the US market? Thanks.

Yes. Looking for the next year, we don't believe there's a lot of negative impact from the FIEC, let's say, OVBB, you know, compliance. We do see a lot of, you know, safe harbor projects, particularly for the solar plus some storage, you know, projects. And we committed, you know, to long term, and, you know, we, I think we really shape our supply chain, you know, globally, and including, and we are exploring options for our, you know, solar module facilities in Florida. And we think, you know, from the long term, there is going to be, you know, demand for both FIEC and non-FIEC. And we are in the, you know, if there is some kind of development, particularly for, you know, transforming our solar module facilities in the United States to the long FIEC entities, and we will let the investor know. But we have been in the process of discussion with potential investors.

Got it. Okay. Thank you, Charlie. I'll pass it on.

Your next question comes from Alan Lau with Jefferies.

Hello? This is Alan from Jefferies. Thanks for taking my question. So my first question is about the ESS business. I would like to know if there's any discussion with any of the AI data centers or, yeah, our hyperscaler clients. And what type of demand are they requiring? Like, are they more like two to four hours of proof capability compatible demand, or it's more like even longer hours of storage with five? Thank you.

Yeah. We're seeing the AI-driven data center, you know, is going to put a lot of demands for the global electricity from long term. And our ESS team is in discussion with potential and pipelines, you know, for the AI data center, including the US, Europe, and including China. But it's still, you know, it's in progress, and we believe we are able to reach a significant milestone early next year.

I see. Clear. Thanks. So in relation to the geographical breakdown, we'd like to know if the gross margin of ESS is similar across the regions, or it should be higher in Europe or the US. Like, how do you see the margins in different regions that you operate?

Oh, you mean, yes, it's margin, you know, different regions, right? Yeah. Yeah. Yeah. We, you know, it's depending on different markets. And China is still a little bit low, but I think it's recovering a little bit. You know? Yes. This is very competitive in China. Europe and the US is, you know, it's still, we think that it is still a decent gross margin. So, you know? And the Middle East is a little bit low, and I think China and the Middle East is, yes, yes. The pricing, you know, the competitiveness, and the margin is relatively low to under ratings. But we think, you know, it's still very healthy. And, you know, business and in the next two years.

Yep. Would like to know on the cost side of ESS because I've noticed that the upstream raw materials are all the cost of raw materials like freezing, or searching, any plans to lock in any raw materials, or how are your view on different raw materials like batteries or, like, even more upstream battery materials like lithium carbonate, etcetera.

Yeah. Yeah. Yeah. We, you know, because the strong demand is a material, it's unlikely in the upper work, and firstly, we have five gigawatts, you know, and battery cell capacities. And which put us at a relative advantage. And the second one, we partner with the key materials and, you know, suppliers. And the second one, we, you know, when negotiating contracts, we did anticipate, you know, some kind of material cost, you know, upwards. So it's a combination. I think it's a little bit challenging, but we think we can manage and how to minimize the impact of the material, you know, the pricing.

I see. I think my next question is about the speed length. On the solar module market. So how do you see the demand growth next year for maybe both solar and ESS? What is the growth rate you see?

Yes. For the demand side, we should look separately for both PV and ESS. Right? So for the PV side, I think we are in a conservative way. We are expecting more or less flat year in 2026 versus 2025. So the main reason is because China demand, you know, we believe it will have a drop compared with 2025. Which, because the weight of China demand is so high in the global demand. So even with the other markets booming or other markets' growth, we still expect the total demand of the globe in the PV industry for next year will be more or less flat year. However, when we look into the ESS, it is in a different scenario. Right? So with more and more renewable installed, the grid needs more security for the ESS contribution. Certainly, we are seeing a sharp increase for the ESS side. That's why from the ESS, we are still keeping an optimistic opinion or expectation for next year's installation. If we need to quantify that, we think it will be at least a 25% increase for the ESS year over year.

I see. Thanks, Gener. Like to know what type of installation in China you are looking at? Like, because there are even numbers flowing around, like, are you looking at low 200 or even below 200 gigawatts in China.

I am not that conservative for China because when recently, I visited a lot of our distributors and even installers in China, in all the different provinces, I think most of them still keep an optimistic view for next year. So that having said all those, I believe that it will be around, let's say, module-wise, it will be around mid-200. Let's say, around 250. About. And if we look into the grid connection number, it should be somewhere around 23%. Right? It's yours. And I think the October and in the process to get money out of China. And after regulatory approval. And we have paid the, you know, withholding tax, and we expect to get the money by the end of this month. And very soon. And for the shareholder, you know, the shareholder returns and we commit at least $100 million a year, and we had to pay a dividend early this year. And we start we bought some shares, certain shares. And I think last quarter, you know, in the middle of this year. And after the window, you know, after earning lease and we plan to repurchase this year throughout the end of the year.

Is that, like how much shares have been purchased or, like, how like, will the company look to basically buy all the remaining amount in the buyback program in the remaining one month?

Yes. And I think we, you know, we plan to use the right, the monetization issues and the key, you know, funding and which is available, and it's around $78 million. So we, I think, depending on how the market moves, we definitely will repurchase the shares by the end of this year. And roughly, I think, this year, you know, $100 million, and we had to go dividend, I think, $70 million. So that's our, you know, the base plan.

That's clear. We will send you. Yes. It's a year-over-year plan, and next year, it's roughly the same plan.

I see that plan. Thank you. Thanks, Charlie.

Once again, if you wish to ask a question, please press 1 on your telephone and wait for your name to be announced. Next question comes from Rajiv Chaudhri with Sensorra Capital.

My first question is regarding your guidance for module shipments for the fourth quarter. It's a very big range, 18 to 33 gigawatts. And you're essentially kept to the same range that you gave for the full year back in the early part of the year. But now we are halfway through the fourth quarter. Could you help us narrow down what the range would be for Q4 for module shipments?

Yeah. I think we will close to the lower end of the range. I think because of the regulatory requirement, we have to keep that range as before. But from the operational level, we believe the lower end of the range is more, let's say, realistic.

I see. So related to that, what do you think the global shipments of modules would be for the industry as a whole in 2025?

Well, we technically believe from the product-wise, we are looking at roughly 700 gigawatts. That's the high-level numbers we are estimating for the whole industry.

And do you believe that 700 gigawatts would have been shipped out by the industry as well, or that was just the production?

Well, I think it's more realized to a production closer to the production side, but because every company has slightly different ways to calculate or announce their shipment numbers. So that's why it's difficult to figure out what's the real shipment number. But production-wise, I think the number is more realistic.

I see. Okay. So moving on to another relating to CapEx. Could you give us the CapEx target for 2025 and also for 2026?

It's roughly 5 billion RMB this year and next year. And by next year, we didn't have any, you know, plan to, you know, expand, you know, capacity, and it's kind of upgraded to a next-generation top kind of technology. And it's going to have significant, you know, high-end, high-power output. Solar modules, as we are able to provide to our customers, you know, next year, roughly 60%. Right. We hope we go some, you know, with price premium and relatively good margin contributions. Next year, quarter over quarter, as a capacity for the high-end, you know, upgrade high-end module capacity will be released quarter by quarter.

So Charlie, just to be clear, this year, the CapEx is RMB 5 billion. And next year, it will be flat at RMB 5 billion?

Yeah. Roughly. Roughly. But next year is I'll talk about this year is roughly payment of outstanding, you know, amount, you know, 5 billion. And next year, we are doing the upgrade. We are doing the upgrade existing capacities and to the next high level, you know, top-down capacity. And we foresee a lot of strong demands and with higher module price and higher gross margin contributions.

So you made a very interesting point that operating cash flow will be positive in 2025. It looks like you will be generating operating cash flow positive in 2026 as well. And maybe substantially higher than 2025 because the gross margin will be higher. Is that a correct assessment?

Yes. That's right. That's right. And, you know, we talked about firstly, I think the catalyst is the first one is ESS storage business next year. We are looking to, you know, 10% to 15% revenue contributions from ESS with decent gross margin and positive net profit release. The second one is the module business. We have, I think, the most advanced top con, you know, upgrade capacities in the industries. And developed by ourselves for the technology, and which will roughly have 60% shipment of the modules coming from the next generation Jinko developed. Top con capacities with higher, you know, gross margins. And the second one, we think from the high-level standards in the industry, anti-evolutions, you know, taking effect step by step. And the capacity will accelerate, you know, phase out and leading by the, you know, a top of on top of that industry-leading self-discipline, you know, control production volume, and reasonable, you know, pricing based on the cost will take, you know, further, I think, enforcement. So combined together, I think the industry is reaching the low point that is recovering step by step. And we think we are getting ready for the, you know, from the market and product perspective. And the plus, are shifting solar plus ESS story and the business. So the basic funding year, we are, you know, we are confident that we are able to, you know, navigate the cycles and in turn to positive earnings. That's kind of the, you know, the best plan next year.

So should we no. You talked about the premium products and the fact that they've got premium pricing. But on the cost side, will your cost for these premium products still be lower than the cost for the standard products this year? In other words, do the costs keep going down even as the price goes up?

Yes. Yeah. Initially, by design, the cost is a little bit higher, but they are very, very small. You know, incremental cost. And by the way, our R&D team continues to, you know, dive into the details and to try to, you know, further improve the cost. But back to your question, I think the, you know, the high-end product cost is very, very small incremental, you know, cost increase. At the beginning. But we believe over, you know, over time, you know, our R&D team with our operational teams will continue to improve the cost.

Final question, Charlie. On market share, in the past, in 2023 and '24, your global market share had gone up to somewhere between 15% to 16% of the global market. This year, it is down a little bit. I guess, because you have restrained production because of the pricing. Should we expect that your market share next year will go up again and maybe go up a lot more than 16% because the industry itself is consolidating? So and what do you think the range for next year module shipments could be?

The consolidated market share after consolidation of, you know, the industry consolidation and the phase-out of capacity, the industry, you know, turns into the kind of normal situation. It's for sure, it's very good for tier-one companies. If you look at it long term, we are confident and we will continue to penetrate the market share. And next year is still, I think, you know, from the top-down approach, you know, and I think China will continue to, you know, launch, you know, implement the anti-involution policies. We don't expect significant, you know, shipments increase, you know, for the module bands. But, yes, it's a different story.

I see. Okay. Thank you very much.

Welcome.

Your next question comes from Philip Shen with ROTH Capital Partners.

Hey, guys. Thanks for taking my follow-up question. One of the check-in with check back in with you on in terms of Q4 margin outlook. What kind of solar module ASP could we see in Q4? And then what kind of margin for the overall quarter that we see?

We expect relatively stable Q4 versus Q3. But ESS business is contributing more revenues, and we estimate our ESS business in the fourth quarter is going to reach positive profitability levels. But the contribution is not significant, but next year is a different story. Right? We have talked about it. And for the module business, we expect, you know, relatively stable.

Okay. Got it. Thanks. And then can you talk about module ASPs for Q1 and Q2 of next year? And then also the trajectory for margins, you know, as you blend in more battery. Thanks.

Yes. Phil, I think it's difficult to share those numbers or estimations right now because you know what is happening. It's like some of the key markets are still, you know, there are, you know, some key or some important policy is upcoming. For example, you know, the US, the guidance of the FIEC or material assistance or even upcoming 232. Which will significantly impact the market prices. Like in China, you know, there's anti-involution policies, and there's even more rumors coming out regarding the polysilicon. Even to the other part of the manufacturing value chain as well. So those changes could significantly change the market price overnight. That's why we believe it's still too early to share our estimation on the prices for next year.

Okay, Gener. That makes sense. You talked about the rumors on Poly. Can you give us a little bit more color on that? Thanks.

I don't have too much more to share based on there's a lot of rumors on the market or on the Internet. So I don't know what you're referring to.

Yeah. I was just you mentioned it, so I thought I would try to see if there's more color.

No. We are not part of the game, so I don't have too much to share with everyone. But thank you for your question.

Yep. No problem. Okay. Thank you, guys. I'll pass it on.

Your next question comes from Brian Lee with Goldman Sachs.

Hey, guys, this is Tyler Bisset on for Brian. Thanks for taking our question. Just quick housekeeping questions. Can you share what was D&A and CapEx in Q2 and Q3?

You mean the absolute number or percentage. Right? Hello? Hello?

Yeah. I'm sorry. Like, the actual number.

I think it's a financial statement. You gotta check out, you know, the financial statements, the R&D, and the, you know, operating expenses and that we have disclosed quarter by quarter. So what would be your, you know, key question you want to explore? It D&A. And CapEx in February and March, like the absolute numbers.

You mean the depreciation or CapEx?

Sorry. Depreciation. Alright. And then separately CapEx.

Okay. Depreciation by quarter, I think, roughly, you know? And I think $300 million a quarter. And the CapEx, I think, is the first half year. We, you know, spend roughly 2 billion RMB.

That is our last and that does conclude our conference for today. Thank you for participating. You may now disconnect.