Shares of JinkoSolar (JKS 10.28, +1.06, +10.6%) are up big today after the Chinese solar manufacturer reported its third quarter results this morning.
The company beat on both the top and bottom lines, with earnings coming in at $0.76 per American Depository Share and total revenues rising 4.3% yr/yr to $974.8 mln. Gross margin rose to 14.9% from 12.0% in the third quarter of 2017 despite a decline in the average selling price of solar modules, and solar module shipments jumped 24.4% yr/yr to 2,953 megawatts, which is a new company and industry record.
JinkoSolar's CEO, Kangping Chen, noted that Chinese demand has softened after the government halted all subsidies for utility-scale solar projects earlier this year, but said business has continued to grow thanks to the company's "diverse global customer base and strong brand recognition." According to Mr. Chen, overseas module shipments accounted for nearly 80% of total shipments during the quarter.
As for the future, the company remains optimistic, with Mr. Chen saying "we are confident that Chinese and global demand next year will recover as the cost of solar energy becomes more competitive. This trend is irreversible."
JinkoSolar expects that module shipments will continue to grow in the fourth quarter, and is anticipating shipments to be in the range of 3.7 GW to 4.0 GW. However, the company did lower the top end of its shipment guidance for the full year, as it's now expecting 2018 shipments to come in at 11.5-11.8 GW -- down from the previous range of 11.5-12.0 GW.
Short-covering activity may be aiding JKS shares today, as roughly 30% of the float was sold short coming into the session. However, even with today's surge, JKS shares are down nearly 60% for the year, mostly due to the Chinese government's aforementioned policy decision. That compares to a 22% loss for China's Shanghai Composite and a nearly 20% loss for the Invesco Solar ETF (TAN 20.40, +0.32, +1.6%).