Q4 2022 JinkoSolar Holding Co Ltd Earnings Call
Speaker 1: Hello, ladies and gentlemen, and thank you for standing by for Genco Solar's Holding Companies Limited's fourth quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question and answer session.
Speaker 1: 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, Jinko Solers of Investor Relations. Please go ahead, Ms. Stella.
Speaker 2: Thank you, operator. Thank you, everyone, for joining us today for Dinko Solar Sports Quarter 2022 earnings conference call. The company's results were released earlier today and available on the company's IR website at www.dinkosolar.com, as well as on your device services.
Speaker 2: We have also provided a supplemental presentation for today's earnings call, which can also be found on our website.
Speaker 2: On the call today from Dinko Solar, Mr. Li Xiande, Chairman of the Board of Directors and the Chief Executive Officer of Dinko Solar Holding Company Limited. Mr. Janet Miao, Chief Marketing Officer of Dinko Solar Company Limited. Mr. Pan Li, Chief Financial Officer of Dinko Solar Holding Company Limited. Mr. Charlie Tang, Chairman of the Board of Directors and the Chief Executive Officer of Dinko Solar.
Speaker 2: to answer our questions during the Q&A session that follows.
Speaker 2: Please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Security Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such,
Speaker 2: Our future results may be materially different from the views expressed today. Further information regarding this and other risks is included in Zincosolar's public filings with the Securities and Exchange Commission. Zincosolar does not assume any application to update any further looking statements.
Speaker 2: except as required under the applicable law. It's now my pleasure to introduce Mr. Li Yanduo, Chairman and CEO of Jinco Solar Hooding. Mr. Li will speak in Mandarin and I will translate his comments into English. Please go ahead, Mr. Li.
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Speaker 3: We closed our challenge in 2022 with satisfactory results as we delivered strong operational and financial performance in the fourth quarter.
Speaker 2: Leveraging our outstanding global supply chain management and marketing network, our total shipments and total revenue increased significantly year over year. At the end of 2022, we became the first in the industry to have delivered a total of 130 gigawatt solar modules.
Speaker 2: Throughout the year, as raw material costs continued to rise, we continued to optimize our cost structure through technical advancement and manufacturing process improvements, which partially relieved the pressure on our profitability. And new shipments of high-efficiency premium N-HAT modules exceeded 10 GW.
Speaker 2: further optimizing our product mix and gradually improving our profitability.
Speaker 2: Net income was approximately US$102.9 million, up 29.1% sequentially, and nearly tripling year over year.
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Speaker 2: Throughout 2022, the increase in demand for solar products did not slow down despite compounded challenges such as the surge in raw material costs, pandemic disruption, and macroeconomic uncertainties. In particular, the energy crisis caused by the Russia-Ukraine conflict caused the crisis of traditional energies to rise quickly.
Speaker 2: up about 50% year-over-year. Even in the more price-sensitive Chinese market, newly added installations grow 59.3% year-over-year to reach 87.4 gigawatt AC, approximately 105 gigawatt DC. Together we make esports a reality.
Speaker 2: and distributed installations grow nearly 75% year-over-year.
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Speaker 3: At the end of December , the cost of signal imbalance between polysilicon supply and demand combined with inventory at the end of December .
Speaker 2: And pricing gains between the upstream and downstream of the solar industrial chain have to some extent impacted market sentiment. With polysilicon supply sufficient to support marginal demand throughout the whole year in 2023, we believe the short-term rise in polysilicon prices will not last.
Speaker 2: And instead, a decline in policy of the comprises will drive down module prices and improve the economics of PVA projects.
Speaker 2: Global PV demand is expected to continue to grow in 2023. We are confident that we will further improve our competitiveness and profitability in the global market with our well-developed industrial chain and the advantage of our end-type products.
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Speaker 2: During the fourth quarter, as the industrial chain remained volatile, we continued to enhance operation management, including strategically controlling inventories and flexibly adjusting production scheduling and volumes. The second phase of 8 gigaWatt Topcon cell capacity in Closet reached full production in the fourth quarter.
Speaker 2: and the second phase of 11 gigawatt top-con cell capacity in Xinjiang is expected to reach full production in March 2023. This average 35 gigawatts of top-con cell capacity gradually reaching full production in the coming quarters. Our integrated capacity structure continues to rise.
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Speaker 2: In December , the lab efficiency of our anti-topcon cell set a new record with maximum conversion efficiency of 26.4%, improving on our previous record of 26.1% set in October . At the end of 2022, the mass produced efficiency of our topcon cell capacity that has reached the full production of our anti-topcon cell set is now
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Speaker 2: At the end of 2022, we became the first module manufacturer in the world to ship over 10 gigawatts of N-type products. We are already a preferred supplier for global clients thanks to our well-established global marketing footprint and the technological advantage of our N-type products.
Speaker 2: With more and more industry players building up N-type capacity, our strategy to embrace and lead N-type technology is now becoming an industry trend. Effective supply of N-type top-com modules in the whole industry is expected to reach 120 to 130 GW in 2023.
Speaker 2: accounting for about 30% of the total PV demand. Leveraging our accumulated experience in mass production and marketing, we expect our proportion of anti-precipients in 2023 to further increase, with penetration of anti-products far exceeding the industry average.
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Speaker 2: By the end of 2023, mass production efficiency of top-con sales is expected to reach 25.8%. We are optimistic on the growth potential for the PV market in the mid and long term, and will continue to invest in n-type capacity, which is now competitive in terms of technology and cost.
Speaker 2: By the end of 2023, we expect our annual production capacity for modern wafers, solar cells, and solar modules to reach 75, 75, and 90 gigawatts, respectively. We expect module shipments to be in the range of 11 to 13 gigawatts for the first quarter of 2023, and 60 to 70...
Speaker 2: gigawatts for the four-year 2023. We will continue to maintain our leading position in N-type modules through technology integration, improvement, mass production capability, and cost optimization.
Speaker 4: We are pleased to announce that we have achieved a historically high shipment on a quarterly and annually basis. Thanks to our technology advantage and extensive global marketing network, the total shipment in the fourth quarter of 2022 has approached 16.8 gigawatts.
Speaker 4: where the module shipment was accounted for 95%, with a 78% increase year over year. The total annual module shipments were 44.5 GW, double the year over year.
Speaker 4: Regarding our regional markets, the shipments in China and Europe markets were the top two highest in 2022, accounted for more than 65% of the total amount.
Speaker 4: In terms of absolute numbers, the annual module shipments year-over-year growth in China were more than triple.
Speaker 4: The annual module shipments to Europe were double, and our growth in emerging markets was nearly double as well.
Speaker 4: In China market, due to COVID and cost concerns mainly brought by upstream supply, some projects that have not been connected to the grid last year have been delayed to 2023.
Speaker 4: Considering the cost from supply chain is dropping towards a more reasonable level, we expect our installations will increase in 2023. Europe will continue to expand PV installations due to energy crisis and the increasing electricity cost.
Speaker 4: As for US market, with the policy incentives brought by IERA and third-party institutions' high expectations of US market demand.
Speaker 4: We believe the project pipeline is sufficient there. In addition, we have seen the energy transformation accelerating in Latin America, Asia Pacific, the Middle East, and more and more regions and countries in the world, bringing more opportunities.
Speaker 4: In 2023, we will continue to pursue our global expansion strategy with Europe and China markets and continue to be our major ones.
Speaker 4: where the shipment would be accounted for over 50% of total amount. And the shipments to the US market were expected to recover gradually.
Speaker 4: Our shipment structure continues to optimize. This distribution generation business accounted for over 50 percent for the full year, improved compared to 2021. In terms of the products, our competitive anti-Tiger Neo modules shipments were around seven gigawatts with a premium remained within reasonable range.
Speaker 4: Until the year end of 2022, we have become the first module manufacturer in the world, shipped over 10 GW N-type module.
Speaker 4: We expect our proportion of N-type module shipments in 2023 to further increase to about 60%, which could further strengthen our leading position in N-type technology in the industry.
Speaker 4: Moreover, the global clean energy transition has started a new growth cycle for solar plus energy star into business.
Speaker 4: So far, we have already signed a framework agreement and a distribution agreement with multiple power developers and distributors around the world.
Speaker 4: In 2023, we will continue to expand the investment on cultivating our storage business to bringing our clients safer and more sustainable Solar Plus storage system solutions.
Speaker 4: In terms of price and orders, our order book visibility in 2023 has already achieved over 50 percent, with oversea orders as the major contributor. Propulsion of the high efficient and high premium N-type of new will be significantly higher than 2022.
Speaker 4: All this will keep our product competitive in this industry.
Speaker 4: By working through various challenges, a PV enterprise can grow up to be more resilient.
Speaker 4: Under this background, we at Jinko Solar are also continuously enhancing our capacities to handle risks and strengthen our marketing network and client relationship.
Speaker 4: We are committed to provide more reliable and high quality products and services to our clients, bringing them more economic value and this will also help us to further improve our global market share. With that, I will turn the call to Penn.
Speaker 3: General Jenner, we are pleased to have achieved strong fourth quarter results based on our solid operation and management strategy.
Speaker 3: against the backdrop of strong demand in the global market.
Speaker 4: Both solar shipments and total revenues increased significantly year-over-year.
Speaker 3: achievements of n-type modules which have premium and cost advantages.
Speaker 5: more than doubled sequentially in the fourth quarter, partially contributing to our improved profitability.
Speaker 5: In addition,
Speaker 5: We continue to enhance control over our operating expenses.
Speaker 5: Total operating expenses accounted for about 12% of total revenues in the fourth quarter, a significant decrease from over 15% last quarter.
Speaker 5: Operating margin was more than 9 times higher sequentially, increasing to 2.1% from 0.3% last quarter.
Speaker 5: times higher sequentially, increasing to 2.1% from 0.3% last quarter.
Speaker 5: at the 35 GW cell capacity put into production.
Speaker 5: in 2022 reaches full production in the coming quarters.
Speaker 5: Our integrated capacity structure is expected to improve further.
Speaker 5: At shipments of our competitive anti-product increase,
Speaker 5: We hope to gradually improve our profitability.
Speaker 5: Let me go into more details now. Purple revenues.
Speaker 5: was 4.4 billion, an increase of about...
Speaker 5: 56% sequentially and 85% year-over-year.
Speaker 5: Gross margin was 14.1% compared with 15.7% in the third quarter this year and 16.1% in the fourth quarter last year.
Speaker 5: The sequential and even yield decreases were made due to an increase in the cost of solar move to raw materials.
Speaker 5: and even your decreases were made due to an increase in the cost of solar module raw materials.
Speaker 5: Total operating expenses were $526 million.
Speaker 5: 21% sequentially and up 68% sequentially.
Speaker 5: Yo, what year?
Speaker 5: The increases were mainly attributed to an increase in shipping costs for solar modules and an increasing impairment loss on property, plant and equipment.
Speaker 5: Let income attribute to the Jinko Solar Holdings Ordinary Shareholder
Speaker 5: was about 103 million in the fourth quarter.
Speaker 5: Excluding impacts from a change in fair value of the notes, long-term investments and share-based compensation expenses. Adjusting net income.
Speaker 5: was 45 million, up 33% year-over-year.
Speaker 5: Now I'll brief you on our 2022 Full Year Financial Results. Total Module Achievement
Speaker 5: For 44.5 gigawatts doubled year over year and total revenues
Speaker 5: gigawatts doubled year over year and total revenues
Speaker 5: for 12 billion US dollars also doubled. For the full year of 2022,
Speaker 5: Gross profit was 1.8 billion US dollars and increased
Speaker 5: of 85% year-over-year. Gross margin was 14.8% compared to 16.3% last year. The decrease was mainly attributed to an increase in the cost of solenoid raw materials.
Speaker 5: of 85% year-over-year. Gross margin was 14.8% compared to 16.3% last year. The decrease was mainly attributed to an increase in the cost of solar module raw materials.
Speaker 5: Total operating expenses were 1.7 billion, increased year over year. Increase was mainly attributed to an increase in shipping cost for solar modules, an increase in impairment loss and disposal of PPE.
Speaker 5: and increase in share-based compensation expenses. Net income attribute to the Jinko Solar Holdings ordinary shareholders.
Speaker 5: their best compensation expenses. Net income attribute to the Jinko Solar Holdings ordinary shareholders was about $JS scheck.
Speaker 5: $96 million in the fourth quarter, excluding the impacts from the change in fair value of the notes, long-term investments, and share-based compensation expenses. Adjusting net income was $208 million.
Speaker 5: at 1.7 times year over year. Moving to the balance sheet, at the end of the fourth quarter, our cash and cash equivalents
Speaker 5: for 1.6 billion US dollars compared with 2.1 billion at the end of the first quarter and 1.4 billion at the end of the fourth quarter last year.
Speaker 5: US dollars compared with 2.1 billion at the end of the third quarter and 1.4 billion at the end of the fourth quarter last year. Air turnover days.
Speaker 5: for 73 days in the fourth quarter compared with 69 days in the third quarter this year. The 73 turnover days were reduced to 59 days in the fourth quarter compared to 117 days in the third quarter.
Speaker 5: Total debt was about US$4 billion and net debt was US$2.3 billion at the end of 2022.
Speaker 5: This concludes our prepared remarks.
Speaker 5: We are now happy to take your questions. Operator, please proceed.
Speaker 1: Thank you. If you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. If you wish to ask a question, please press star then one on your telephone and wait for
Speaker 1: If you wish to cancel your request, please press star then 2. If you're on a speakerphone, please pick up the handset to ask your question and we'll pause momentarily to assemble our roster.
Speaker 1: The first question will come from Brian Lee with Goldman Sachs & Company. Please go ahead.
Speaker 6: Hi everyone, this is Miguel on for Brian . My first question was just on the capacity expectations for 2023. You're guiding to the very strong growth in capacity for the year. What are your CapEx requirements for 2023 to support this growth?
Speaker 4: I think we are in the middle of a calculation right now. I think our team will follow up with you after the call for the further details of the CAPEX numbers.
Speaker 6: Okay, thanks. I appreciate that. And then my follow-up question was just on margins during the fourth quarter, given the overall decline in the market prices for polysilicon that was observed in the fourth quarter, could you just give more color on what drove the false
Speaker 6: the lower quarter on quarter gross margins, and then what are your expectations for polysilicon prices, and then also on margins through the first quarter of 23 and through the rest of the year? Thanks.
Speaker 4: For the polysilicon, I think overall we are observing oversupply of polysilicon in the long run. We believe the reason the turbulence is just the start of the market trend.
Speaker 4: But in general, we believe the polysilicon will go back to the market-based pricing. So that's what we believe in the long term. In short term, for sure, because of the different seasonalities and the behavior of, let's say, top players in the polysilicon industry, we still believe there might be some short-term challenge or turbulence. So that's what we believe in the long term.
Speaker 4: quarter by quarter if there's no big surprises in the market.
Speaker 5: Hope that answered your question.
Speaker 6: Yeah, if I could just squeeze in a follow up on that just on the 4Q margins, I guess what if the.
Were you able to realize any of the lower market prices for polysilicon that we saw in the fourth quarter? Or I guess what drove the...
specifically in the fourth quarter what drove the lower gross margins. Thanks.
I think if you look into financial figures, the turbulence happened in the polysilicon prices in early Q1 this year will not be helpful for the Q4 margins. And if you look into the Q1 margins, we have to look into the overall polysilicon cost instead of short term, let's say one week or two weeks.
and cost structure improvement instead of polysilicon turbulence.
Because you have to think about the policy and inventory numbers, right? That number is a very important factor to the cost of the policy.
You have to think about the policy and inventory numbers. That number is a very important factor to the cost of the policy.
Okay, understood. Thanks. I'll pass it on. No problem. The next question will come from Philip Shin with Roth MKM. Please go ahead.
Hey guys, thanks for taking my questions. First, I'd like to address the U.S. market and the U.F.L.P.A. situation. I was wondering if you could talk a little bit about the U.S. market and the U.S. market.
if you could share how things are improving. So specifically, you know,
you expect to have you ramped up manufacturing in Southeast Asia for fresh shipments to the US when do you expect those new shipments to reach the US and what is the utilization of the Southeast Asia capacity set aside for the US. Thanks.
Phil, thanks for the question. For the U.S. market, especially regarding the U.F.L.P.A. inspections, we have seen the light at the end of the tunnel and we see the improvement, the efficiencies, the turnover days, etc. are gradually improving.
well you know the official CBT officials are becoming more and more professional in that perspective. We have seen the hopes but it's still not 100% smooth transactional let's say custom clearance yet but we are hoping that could happen soon.
So, regarding the question of the Southeast Asia factories of Shanghai, our factory has a high utilization rate, not only because of US market, I think mainly thanks to other markets who also have a strong demand for capacities or productions outside China. So our capacity is up and running almost in a...
Thanks, Jennifer. So when you say soon, are we talking about a couple months or are we talking about maybe six to nine months? Well, my perspective, I hope it could happen tomorrow, but it's not something I can handle or I can decide. So we are working...
other countries. Can you share which countries those might be and how they might be impacted once the US market opens up for you? Which markets would decline if you will.
One of the important sources, there are many names on the list, but one of the big market is Indian market. You know that Indian market has strong demand as well. While they have a high tariff against Chinese products, they have a strong appetite for the Southeast Asia products.
One of the important sources, there are many names on the list, but one of the big market is Indian market. You know that Indian market has strong demand as well. Well, they have a high tariff against Chinese products or they have a strong appetite for the Southeast Asia products.
And then shifting to your comment that the order book visibility in 23 has already achieved over 50% in large part from international markets. Can you talk to us about what your current contracting activity looks like for the US? Are you taking new orders yet?
or do you have to get through, remind us how much backlog you have to get through before, you know backlog created by the trade situation before you can maybe take the orders.
Based on what we have right now, we are not capable to take new orders because we have a lot of backlogs which is big enough for us to, for the factory running under the current status of the CVP approval rate.
However, we have a faith that everything will get better because once the approval rate and efficiency back to normal, I think we are hoping to allocate more capacities to US market which will help us to solve the backlog pipelines and the commitment to our clients.
in the U.S. Can you talk about how you expect panel pricing to trend through the, not just this year, but also in the future years? I know you're not contracting fresh, but I know you guys probably are very much in touch with your customers. With the ramp up of the U.S.
IRA manufacturing capacity in the US, how much do you think panel prices decline as we get through 2024, 5, 6, 7, but you also have the other forces of UFLPA and other trade actions. What is your view on module pricing in the coming years?
manufacturing capacity in the U.S. How much do you think panel prices decline as we get through 2024, 5, 6, 7, but you also have the other forces of U.F. L.P.A. and other trade actions. So what's your view on module pricing in the years? Thanks. In the U.S.
Well, Phil, you know that we are not picking new deals at the current stage in U.S. markets, so I'm not in the right position to discuss fair market numbers, but I can confirm there are many rumors in the market that U.S. market price is big enough or let's say high enough for many.
Let's say, more size suppliers who have not suffered or experienced the UFLPA inspection. We believe there are big room to correct the right market price in the future, given the UFLPA inspection complexity of the UFLPA.
than one. Our next question will come from Rajiv Chaudhry with Sunseer Capital. Please go ahead sir.
Yes, good morning. I have a few questions. The first question is on the cost of polysilicon. You mentioned that was the primary reason why gross margin went down from Q3 to Q1. I'm wondering if you can give us an idea of what your polysilicon cost was, the cost embedded in Q4.
earnings result versus Q3, either in Remnimbee or in terms of the percentage increase from Q3 to Q1. That's my first question.
Sorry, Q3 to Q4. Thank you, Rajeev. We are talking about the policy that can apply to the cost components, right? Yes. Yes.
If you can give us a more granularity on how much it went up from Q3 to Q4 and what the gross margin might have been if the polyethylene cost had been flat for example.
That would give us an idea of how the cost numbers are playing out. I think our training is likely to the public, the policy compliance from the public like on the private level.
or other properties available on my side. And if you look at the trend of the polysilicon, it's reached to a peak from October to November and in December because of this stock.
and the China rush, the end of the rush and the party is done dramatically. But because of the production instruments, the positive impact is going to be reflected to the first quarter. So it's really, you know, the party has reached their peak.
from the cost perspective in Q4. And I think, you know, it's a, last wait.
I think 10% to 15% quarter by quarter increase if you look at the trend.
Okay, so you're saying that or you're implying that to shift product modules in November , December , you had to buy poly in October , November when the prices were very high. And so the benefit of the lower price of poly in December .
to the extent that you are going to get a benefit will be felt much more in Q1 because that's when that product gets shipped out. So 10 to 15% increase in the cost of poly from Q3 to Q4 would mean that the gross margin would have gone up from Q3 to Q4 if the cost of poly had stayed flat.
You're right, you're right. The policy compliance assumption is stable and I think the gross margin is up, Q4 versus Q3. The party is significantly up and drives down the...
the 12 times the gross margin in Q4. But I think the most important for the company business is we are doing investment in N-type starting the beginning of 2022. And we reach to 35 gigawatt N-type capacity.
you know, present or last year. And with more n-type shipments and polysilicon, now the supply is sufficient.
is on the downward trend. And we have significant sales order pipelines in Q23, and we think we are in a good position to drive the company's growth, including the revenue growth margin net profitability.
So would you say that from here onwards if the price of polysilicon continues to come down, whether it comes down slowly or rapidly, we don't know, but if it keeps on coming down every quarter, that we should expect improvement in gross margins on a steady basis quarter by quarter?
Yes, if you know, year basis, in this industry we are optimistic on our probabilities. It's not only the polysilicon, our compiler is...
is improving a lot. We have good products, we have very strong R&D teams and we have funding, global sales and marketing and we have very solid supply chain teams and drive app, you know the overall performance.
improving a lot. We have good products, we have very strong R&D teams, and we have funding, global sales and marketing, and we have a very solid supply chain teams and drive up the overall performance.
Can you also talk about the capacity that you had for wafers, cells, and modules at the end of 2022?
I think we disclosed in the presentations, right, and the 65, 55, 70 gigawatts by the end of last year. And we continue to expand our end-time capacity and total capacity will reach to, I think, 25, 95, 90 gigawatts by the end of this year.
Can you also talk about the trends that we should expect in operating expenses in 2023 versus the fourth quarter of 2022? For example, you should incur less costs.
to 200 basis point improvement in operating expenses in 2023 versus the fourth quarter?
Hey, Zhejie, can I say – sorry. Zhejie, I think you know, they are pretty expensive. You know, U.S. companies compose a lot of key components. One of the most important things is saving, which is, you know –
It's going to improve a lot. The global economy is, the impact to the shipping logistics is not so significant. We expect a 6.7% cost.
will improve a lot. On top of that, our US, the US ALPA, will improve step by step, and we have an incredibly significant, unexpected storage cost for the shipment to the US market. And that will...
we expect significant improvements. As well as even in our management teams, we are expecting our overall.
Let's say the labor in facing states will expect to increase to 30%.
And so that's going to be, I think, you know, a little bit with the expansion.
60 to 70 gigawatt.
which is 45 gigawatt, roughly 50% increase on the top flight, and shipment cost improvement and some Delta Thank you.
We expect the operating instances will be downward change over a quarter.
Also, can you talk a little bit about what trend you see in the GNA in the general and administrative expenses? They went up a lot in 2022 compared to 2021.
What sort of growth do you see in those expenses going forward? We have some obsolete, let's say one of the items like we dispose of obsolete equipment.
And for the small size, you know, the equipment to produce small size modules. And we granted stock options. We have one of the stock option-based compensation experiences. So that is the...
the key reasons for the GNA expenses increase year over year.
for the GNA expenses increase year over year.
are DNA experiences increased year over year?
Thank you, Charlie. Welcome. Again, if you have a question, please press star, then 1. Our next question will come from Alan Lau with Jeffries. Go ahead.
Thanks a lot for taking my question. So I would like to ask again about on the 4Q results. Because the A share results actually show a very strong quarter over quarter earnings growth, almost doubled, where it is at the US level.
the net, just the net income actually declined. So how should we reconcile the difference between these two? And is there any further share-based expenses in there or just what is the difference between the two levels?
First, the A-Shares accounting is under the PRC gap and the US is under the US gap and the consolidation rate is different.
the US entity holds only 58% of the equity of the ACF. Under that, under US GAAP, and we have, for the 2022, we have significant difference on the income tax incentives.
relating to the deferred tax assets. Because of the USFLAPPA, we had significant loss on the overseas entities and on the USSCAN, we did not recognize the
the cumulative losses under the different tax assets. And under the PRC gap from the beginning, we did not recognize, you know, so there's a significant difference on the income tax expenses. And there is, additionally, we have some difference on the accounting for the...
welfare benefits for the employees and it's based on the different accounting policies.
Under US GAAP we have separate items like the change in value, fair value, convertible bond and for the long term equity investment we go for the ecosystem investment we record it under the fair value gains and the adjusted income including that to items as well.
So back to your questions, I think that it's one of the coming time accounting difference for the Q4.
you know, you call you benefit, you know, welfare account.
Ally, So there's quite a significant interest in it, in the packs or and also R ask another relative eager question on the on fect SME, because the company has made significant averic saining.
3Q and actually RMP has depreciated in 4Q but seems there's an effect loss. So is it because of the hedging issue or why is that?
So what are we talking about for which one item on the...
For an exchange loss.
OK. For the 2022 overall, I think we did significant work on the foreign exchange heads. On a net basis, we recognized the net gain.
There are some fluctuations quarter by quarter. And Q4, the net gain is relatively smaller, which is Q3 because the RMB depreciated a lot. You know, you may have a Q3 last year.
is quarter by quarter. And I think Q4, the net gain is relatively smaller, which is Q3 because the RMB depreciated a lot. We had Q3 last year. wee Q1, how
Switching topic to this technology, what would you expect the unit net profit or the ASP premium of top con versus perk coming into first queue because shipment percentage is higher and the anti-ship should have even higher contribution to.
the type of it. So can you share with us? The premium is roughly 1.5 cents, US cents.
Our efficiency is pretty good, leading the industry and the product provides additional value to the customers. We think it's 1 to 1.5 US cents premium.
you know, the price and make them. So is it fair to say the accounting issues
will not exist going forward and we have declining freight costs plus living costs and also the ASP premium is also high then we should expect a strong first quarter in terms of the cross margin.
We expect the Ghost Margin expansion in the first quarter.
we have more integrated levels and the n-type, the percentage, I expect to reach to 50%.
and the polysilicon is downward trend. And so, you're right, we expected in the first half of the year, the closing margin is in expansion stage.
in downward trend. And so, you're right, we expect it in first half years that the growth margin is in expansion stage.
Thank you. My last question is, what is Jinko Solar's plan in the U.S. because it has 400 megawatts already and some of the Chinese peers have already started construction for expansion in audio capacity. So what are the plans for Jinko Solar for now in the U.S.?
We are doing a very solid analysis evaluation for expansion in the U.S. and we are optimistic because the IRA is going to be – I think it's very attractive in the scheme. And that's fast as you ask Marcus.
So it's expected strong demand. So we are in the final evaluation stage. We have already 400 megawatts capacity. And we will expand very quickly.
Thanks a lot Charlie for replying my question.
The next question will come from Erma with Citigroup. Please go ahead. Thank you, management, for taking up my call. So I have two more questions regarding on the untyped product capacity. So my first question is about the current unit product cost in that work.
of your n-type Topcom modules compared to the perc ones? And what is the target level by end of this year? And my second question is about the capacity. So how many new n-type capacity that you would like to build this year? And so adding in addition to the...
35 gigawatts by end of 2002. Yeah. That's my question. Thanks. In terms of the N-type modules integrated path versus the P-type, and we have reached to the priority, let's say the same cost for N-type versus the P-type by end of last year.
And this year, because of the polysilicon is downward trend, which will have some negative impact. But we will continue to improve the efficiencies and implement new process materials.
And we expect we will maintain the same cost structure and the end of the year for the entire v-type.
The N-type, you know, by the end of last year we have certified, you know, the N-type, right, and the fail, and by the end of this year we will have certified the N-type.
have I think 55 gigawatts N-type TopCon to capacity.
So come pass it
Okay, thank you.
This concludes our question and answer session as well as our conference call for today. Thank you for your participation. You may now disconnect.
or question and answer session, as well as our conference call for today. Thank you for your participation. You may now disconnect.
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