JINKOSOLAR HOLDINGS CO 2026 Q3 Earnings Call

Hello, everyone, and thank you for joining us today for Jinko Holdings Third Quarter 2026 Earnings Conference Call. The company's results were released earlier today and are available on the company's IR website at ir.jinkosolar.com, as well as on news wire services. We have also provided a supplemental presentation for today's earnings call, which can also be found on the IR website. Joining us today are Mr. Dimi Du, CEO of Jinko Holdings Limited, Mr. Craig Zhang, Acting CFO of Jinko Holdings Limited, Mr. Charlie Cao, CEO of Jinko Solar Company Limited, and Mr. Gener Miao, CMO of Jinko Solar Company Limited. Mr. Du will discuss the group's business operations, company highlights, and key product developments, followed by Mr. Zhang, who will go through the financials. Management will be all available to answer your questions during the Q&A session.

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 Jinko Holdings' public filings with the Securities and Exchange Commission. Jinko Holdings does not assume any obligation to update any forward-looking statements, except as required under the applicable law. It's now my pleasure to turn the call over to Mr. Dimi Du, CEO of Jinko Holdings Limited. Please go ahead, Dimi. Hello, everyone.

This is Dimi Du, and thank you for joining JinkoSolar Holdings Third Quarter 2026 Earnings Call. Last Friday, we announced the completion of our name change to JinkoSolar Holdings Limited, and today is the first time we are speaking with you under the new name. For us, the change is not simply the adoption of a new name. It marks a new start point in our development. Our recent Jinko 2026 Global Tech Day underscored how quickly energy and technology are converging. From PV to energy storage, and from energy supply to ever-growing demand for computing power in the AI era, technological innovation continues to expand the boundaries of the energy industry. We believe that truly valuable innovation lies not only in pushing the limits of technology, but in bringing that technology into application, embedding across the industry, and creating long-term value.

Going forward, we will continue to focus on our core solar and energy storage business while taking a more open approach to opportunities in AI, advanced materials, commercial space, and other frontier technologies. We aim to connect our industry expertise with external sources of innovation to support technologies and companies with long-term potential through disciplined capital allocation and advance both industrial development and long-term shareholder value through ongoing portfolio management. Let me begin by reviewing the operational performance of our solar and energy storage business, and then update you on our strategic investments. In the third quarter, we continued to deploy an operating strategy that balances sales volume and profitability, advancing the iteration and upgrade of our high-efficiency products and the development of our energy storage business.

Benefiting from higher shipments of high-efficiency products, the continued cost optimization of Tiger Neo 3.0, and improved profitability in our energy storage businesses, our operating performance improved significantly both year-over-year and sequentially. Gross margin was 12.3% in third quarter, up approximately 8 percentage points sequentially and 5 percentage points year-over-year. Net loss and adjusted net loss both narrowed significantly on both a year-over-year and sequentially basis to $25.4 million and $1.2 million, respectively. Looking ahead, we will build on three core pillars, namely technical innovation, globalization, and AI transformation, to drive integrated solar plus storage development and to convert our technology, manufacturing capability, and global network into a stronger and systematic solution. Looking at the details, module shipments were 15 gigawatts in third quarter. With a strong brand and product capabilities, we continue to expand our footprint in high-value overseas markets.

In the third quarter, overseas markets were the primary destination for shipments, accounting for around 70% of the total. We continue to optimize our product mix, with the shipments of Tiger Neo 3.0 modules exceeding 5 gigawatts during the quarter and commanding a premium for approximately $0.01 per watt over conventional modules. We also made progress with the capacity ramp-up with Tiger Neo 3.0, with production cost continuously improving. We are well aware that technological innovation with real long-term competitiveness should not pursue an efficiency breakthrough alone. It must also meet customer needs across different application scenarios and deliver tangible economic benefits through scaled mass production. Recently, we launched the next-generation Tiger Neo 5.0 All-Black premium resi module based on the TAC technology platform, featuring power output of up to 510 watts and module efficiency of up to 25.52%.

Leveraging our core TAC technology, we will focus on our global premium resi distributed generation market segment, particularly residential rooftop applications. We are planning to gradually ramp up production and shipments over the next two years in line with the market demand and industry conditions. At the same time, we will continue to strengthen our network through relationships with installers and end customers and improve both product competitiveness and local service capability so that our technological advantages translates more effectively into a commercial value. We are pleased to see our energy storage business deliver growth in both sales volume and profit in third quarter. We recognized approximately 1.75 gigawatt hour of energy storage shipments as revenue, matching the total recognized for the whole of last year, with the business also generating positive quarterly operating profit for the first time.

We are actively advancing the application of our proprietary PCS products and continuing to explore opportunities in emerging scenarios such as data centers. Going forward, we will further optimize our geographic and order book mix and deepen the synergies between solar and storage across customer resources, sales channels, and technical services in order to deliver more sustainable growth and profit contribution. The PV industry is at a critical stage of supply and demand adjustment as the relevant national authorities continue to promote the orderly and well-regulated development of the industry through stricter standards and higher technical and energy efficiency requirements. We expect these measures to support the gradual phase-out of less efficient capacity and competition to focus more on technological innovation, product quality, and customer value.

We will maintain our operating strategy of balancing sales volume and profitability, continue to optimize our product and order book, and exercise strict control over capital expenditure in order to make the improvement in our operating performance more sustainable. We expect module shipments of between 16 gigawatts and 18 gigawatts in fourth quarter. For full year 2026, we expect energy storage system shipments POD of approximately 10 gigawatt hour. By the end of 2026, we expect to have approximately 40 gigawatts of high-efficiency capacity that meet Level 1 national energy efficiency requirements. Alongside the progress in our core solar and energy storage business, we continue to invest in semiconductors, AI, energy storage, and other frontier technologies in third quarter, with total and follow-on investments of approximately RMB 330 million, of which approximately RMB 254 million came from the company's own capital.

This includes KiwiMoore, a producer of full-stack AI networking products and a solution specializing advanced chiplets and chip interconnection technologies, and TIGSTOR, a company focused on the development and application of supercapacitor technologies. We also saw continued progress across our strategic investment portfolio during the quarter. SiliconFlow completed the second tranche of its Series B+ financing round and its Series C financing round in September 2026. StepFun launched its STEPX terminal brand and related AI terminal products in July, further extending application of its large language models in end-user devices. More recently, Adaspace Technology, another of our portfolio companies, passed the listing hearing of Hong Kong Stock Exchange. In terms of the portfolio management and value realization, at the end of third quarter of 2026, the fair value of our strategic investment portfolio was approximately RMB 2.05 billion.

During the first nine months of 2026, our portfolio generated gains of approximately RMB 327 million, comprising approximately RMB 82 million in realized gains and approximately RMB 244 million in unrealized fair value gains. Over the same period, portfolio exits generated approximately RMB 386 million in cash proceeds. Notably, having divested a substantial proportion of our equity interest in LAPLACE in the first half, we completed the exit from our remaining equity interest in third quarter, generating additional cash proceeds of approximately RMB 38.7 million. Our initial investment in LAPLACE was approximately RMB 65 million, and the investment generated cumulative gains of approximately RMB 357 million. Looking ahead, we will remain selective in pursuing investment opportunities, balancing new investments against exits based on the operating performance and value realization path of each portfolio company, and improving capital utilization efficiency.

By improving the performance of our core solar and energy storage business and progressively realizing the value of our portfolio, we remain committed to creating sustainable long-term value for our shareholders. This concludes my remarks, and I will turn the call over to Craig.

Thank you, Dimi. With our focus on high-efficiency products and high-value markets, the continued growth in revenue contribution from our energy storage business, and the unremitting cost control initiatives, we achieved a steady improvement in our financial performance. Gross margin was 12.3% in the third quarter, up 8.1% sequentially and 5% year-over-year. Loss from operations and net loss narrowed significantly both sequentially and year-over-year. Operating cash flow was approximately $91 million for the first nine months of 2026, as we continued to optimize our cash flow management. We will continue to balance sales volume and profitability and to control cash flow. We expect full-year operating cash flow to improve compared to last year. Now, let me walk you through our third-quarter financial results in more detail.