JinkoSolar Holding Co., Ltd. :JKS-US: Earnings Analysis: Q3, 2016 By the Numbers : November 22, 2016

JinkoSolar Holding Co., Ltd. reports financial results for the quarter ended September 30, 2016.

We analyze the earnings along side the following peers of JinkoSolar Holding Co., Ltd. – Daqo New Energy Corp. Sponsored ADR (DQ-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 855.43 million, Net Earnings of USD 35.05 million.
  • Gross margins widened from 21.34% to 22.05% compared to the same period last year, operating (EBITDA) margins now 10.60% from 9.48%.
  • Earnings growth from operating margin improvements as well as one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016-09-30 2016-06-30 2016-03-31 2015-12-31 2015-09-30
Relevant Numbers (Quarterly)
Revenues (mil) 855.43 906.39 837.06 948.72 641.88
Revenue Growth (%YOY) 33.27 75.6 89.98 96.49 54.18
Earnings (mil) 35.05 42.63 47.98 54.57 30.9
Earnings Growth (%YOY) 13.42 245.9 487.32 37.22 -32.24
Net Margin (%) 4.1 4.7 5.73 5.75 4.81
EPS 1.07 1.28 1.3 1.71 0.49
Return on Equity (%) 13.65 17.19 20.23 24.39 14.38
Return on Assets (%) 2.88 3.8 4.5 5.32 3.27

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Market Share Versus Profits

Revenues History
Earnings History

JKS-US‘s change in revenue this period compared to the same period last year of 33.27% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that JKS-US is holding onto its market share. Also, for comparison purposes, revenues changed by -5.62% and earnings by -17.79% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s earnings growth was influenced by year-on-year improvement in gross margins from 21.34% to 22.05% as well as better cost controls. As a result, operating margins (EBITDA margins) rose from 9.48% to 10.60% compared to the same period last year. For comparison, gross margins were 20.36% and EBITDA margins were 9.14% in the last reporting period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Margins

The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from 9.48% to 10.60% and (2) one-time items. The company’s pretax margins are now 7.05% compared to 6.61% for the same period last year.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for JinkoSolar Holding Co., Ltd.

Company Profile

JinkoSolar Holding Co., Ltd. is engaged in the solar power industry. Its products include silicon ingots and wafers as well as solar cells and modules. It offers solar system integration and processing services. It distributes its products under the JinkoSolar brand. The company was founded by Xiande Li, Kangping Chen and Xianhua Li on August 3, 2007 and is headquartered in Shangrao, China.

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