{"text":[[{"start":7.65,"text":"Record gold prices may be getting all the attention in commodities headlines lately, but similarly spiking prices for silver have been causing headaches for solar companies these days. That factor nearly drove JinkoSolar Holding Co. Ltd. (JKS.US; 688223.SH) back into the difficult position of spending more to produce each of its solar cells and modules than it could sell them for, just two quarters after its gross margin returned to positive territory."}],[{"start":38.15,"text":"The rising yuan, JinkoSolar’s home currency, also worked against the company’s gross margin, which dropped to just 0.3% in the fourth quarter of last year, well below the 7.3% in the third quarter and 2.9% in the second quarter, according to its latest results published on Thursday. Just as disheartening for investors, the company forecast its shipments would continue to decline this year, as its recently named CEO Cao Haiyun referred to 2026 as a “transition year.”"}],[{"start":69.3,"text":"Adding to its woes, the company and its peers took a hit from April 1, as China officially cancelled its yearslong tax rebate policy for exported photovoltaic products. That policy previously dropped the value added tax that solar companies had to pay for their products to 9% for exports from the standard 13%."}],[{"start":90.35,"text":"That rebate policy was just one of many Chinese government subsidies designed to promote the industry’s development for years – something Western countries often complained about, saying it gave Chinese manufacturers an unfair advantage over global competitors. China is eliminating the export rebate policy as part of a broader campaign to wean its companies from reliance on government support and end a destructive price war that has plunged most manufacturers into the red in the last year."}],[{"start":118.25,"text":"JinkoSolar was typical of the group, reporting a massive 1.5 billion yuan ($220 million) loss in the fourth quarter, more than triple its 477 million yuan loss a year earlier. Even on an adjusted basis, which excludes changes in the fair value of financial instruments and other non-cash items, the company’s net loss more than doubled in the fourth quarter to 838 million yuan from 431 million yuan a year ago."}],[{"start":146.65,"text":"JinkoSolar and its peers have been trapped in a downward spiral for most of the last two years after embarking on a government-encouraged building binge that led to massive overcapacity for the global solar panel sector, most of which is now in China. Now, Beijing is trying to correct the situation by encouraging companies to shut down older, obsolete capacity and guide the industry “away from pure competition on scale and price toward a focus on genuine quality and value,” said Chairman Li Xiande."}],[{"start":178.3,"text":"That process was already a painful one, as JinkoSolar and its peers shuttered older capacity and took massive write-downs in the process. Making matters worse were the yuan’s recent appreciation, combined with spiking silver prices that tripled at one point over the last year. While the price has fallen from peaks in January, it’s still more than double where it was a year ago."}],[{"start":199.85000000000002,"text":"Rising module prices"}],[{"start":201.85000000000002,"text":"JinkoSolar executives said the company has been able to pass some of its higher material prices on to buyers, and noted that its module prices have been rising for the last three to five months. But its low gross margin shows that the company must still absorb some of the higher silver costs itself."}],[{"start":219.55,"text":"Complicating matters is JinkoSolar’s drive to export more of its products as China slows a building binge that has made the country home to more than half of the world’s installed capacity for solar power. But the cancellation of export rebates, combined with the effects of yuan appreciation, will make those overseas sales less profitable."}],[{"start":242,"text":"The company got about 60% of its revenue last year from exports, and expects that figure could climb to about 70% this year. At the same time, the company forecast its overall module shipments will continue to fall this year, dropping to between 75 GW and 85 GW from the 86 GW it shipped in 2025."}],[{"start":263.75,"text":"None of that excited investors who were hoping for a quicker turnaround. The company’s U.S.-listed shares tumbled 12% on Thursday after the release of the latest results, though they are still up 35% over the last 52 weeks on hopes for an industry recovery."}],[{"start":281.05,"text":"Despite its market-leading position, with about 13% of the global market for solar modules, the company’s stock only trades at a dismal price-to-sales (P/S) ratio of 0.11. That’s slightly lower than the 0.16 for the smaller Canadian Solar (CSIQ.US) and is well behind the 0.53 for the more comparably sized Trina (688599.SH)."}],[{"start":305.75,"text":"Spiking silver prices, the rising yuan and government policy changes aside, JinkoSolar’s own performance largely continued to reflect industry trends in the fourth quarter. Its revenue fell 15.2% year-on-year to 17.5 billion yuan during the quarter, which wasn’t too exciting but marked an improvement from the 34% decline in the previous quarter. Its module shipments showed a similar trend, falling 4% year-on-year during the quarter to 24 GW, marking an improvement from a 17% decline in the third quarter."}],[{"start":339.05,"text":"One slightly bright spot for the company was its young energy storage system (ESS) business, whose products are used to store excess electricity generated by solar farms for use when the sun isn’t shining. The company said that business maintained a “rapid growth trajectory” last year with 5.2 GWh of shipments for the year. It added it expects the amount to more than double this year."}],[{"start":364.40000000000003,"text":"Energy storage systems are indeed a hot ticket right now, as reflected by the doubling of shares of Sigenergy Technology (6656.HK), another player in the space, in their Hong Kong trading debut on Thursday, as the company raised more than $500 million in its IPO."}],[{"start":382.55,"text":"But even energy storage systems are showing signs of becoming a bubble, as often happens in China as companies pile in to the latest hot area being promoted by Beijing. Accordingly, we wouldn’t hold out too much hope for energy storage systems as a cure for JinkoSolar’s current woes. Instead, the company will need to wait for prices to stabilize, and the headwinds of high silver prices and a rising yuan to ease, before its ship can finally stabilize. But that’s likely to take at least another year or two."}],[{"start":419.05,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1776449789_2028.mp3"}