JinkoSolar Holding Co., Ltd. :JKS-US: Earnings Analysis: Q4, 2016 By the Numbers : April 11, 2017

JinkoSolar Holding Co., Ltd. reports financial results for the quarter ended December 31, 2016.

Highlights

  • Gross margins narrowed from 19.48% to 14.25% compared to the same period last year, operating (EBITDA) margins now 1.96% from 7.95%.
  • Narrowing of operating margins contributed to decline in earnings.

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

2016-12-31 2016-09-30 2016-06-30 2016-03-31 2015-12-31
Relevant Numbers (Quarterly)
Revenues (mil) 745.69 855.43 906.39 837.06 948.72
Revenue Growth (%YOY) -21.4 33.27 75.6 89.98 96.49
Earnings (mil) 21.23 35.05 42.63 47.98 54.57
Earnings Growth (%YOY) -61.1 13.42 245.9 487.32 37.22
Net Margin (%) 2.85 4.1 4.7 5.73 5.75
EPS N/A 1.07 1.28 1.3 1.71
Return on Equity (%) 8.58 13.65 17.19 20.23 24.39
Return on Assets (%) 1.92 2.88 3.8 4.5 5.32

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Earnings Growth Analysis

The company’s year-on-year decline in earnings was influenced by a weakening in gross margins from 19.48% to 14.25%, as well as issues with cost controls. As a result, operating margins (EBITDA margins) went from 7.95% to 1.96% in this time frame. For comparison, gross margins were 22.05% and EBITDA margins were 10.60% in the previous period.

Margins

The company’s decline in earnings has been influenced by the following factors: (1) Decline in operating margins (EBIT margins) from 7.95% to 1.96% and (2) one-time items that contributed to a decrease in pretax margins from 7.46% to 1.88%

EBIT Margin History
PreTax Margin History

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Company Profile

JinkoSolar Holding Co., Ltd. engages in the solar power industry. It operates through Manufacturing and Solar Power Projects segments. The Manufacturing segment focuses on the manufacture of silicon ingots, wafers, cells, and solar modules. The Solar Power Projects segment deals with the development, construction, and operation of solar power projects, which include power generation; engineering, procurement, and construction; and connecting solar power projects to the grid, and operation and maintenance of the solar power projects. 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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