Hello, ladies and gentlemen, and thank you for standing by for Jinko Holdings Third Quarter 2026 Earnings Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question-and-answer session. 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 Holdings Investor Relations Manager. Please proceed, Stella.
Thank you, operator. Hello, everyone, and thank you for joining us today for Jinko Holdings Third Quarter 2026 Earnings Conference Call. The company's results were released earlier today and are available on the company's IR website at ir.jinkosolar.com, as well as on news wire services. We have also provided a supplemental presentation for today's earnings call, which can also be found on the IR website. Joining us today are Mr. Dimi Du, CEO of Jinko Holdings Limited, Mr. Craig Zhang, Acting CFO of Jinko Holdings Limited, Mr. Charlie Cao, CEO of Jinko Solar Company Limited, and Mr. Gener Miao, CMO of Jinko Solar Company Limited. Mr. Du will discuss the group's business operations, company highlights, and key product developments, followed by Mr. Zhang, who will go through the financials. Management will be all available to answer your questions during the Q&A session.
Please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our future results may be materially different from the views expressed today. Further information regarding this and other risks is included in Jinko Holdings' public filings with the Securities and Exchange Commission. Jinko Holdings does not assume any obligation to update any forward-looking statements, except as required under the applicable law. It's now my pleasure to turn the call over to Mr. Dimi Du, CEO of Jinko Holdings Limited. Please go ahead, Dimi.
Hello, everyone. This is Dimi Du, and thank you for joining JinkoSolar Holdings Third Quarter 2026 Earnings Call. Last Friday, we announced the completion of our name change to JinkoSolar Holdings Limited, and today is the first time we are speaking with you under the new name. For us, the change is not simply the adoption of a new name. It marks a new start point in our development. Our recent Jinko 2026 Global Tech Day underscored how quickly energy and technology are converging. From PV to energy storage, and from energy supply to ever-growing demand for computing power in the AI era, technological innovation continues to expand the boundaries of the energy industry. We believe that truly valuable innovation lies not only in pushing the limits of technology, but in bringing that technology into application, embedding across the industry, and creating long-term value.
Going forward, we will continue to focus on our core solar and energy storage business while taking a more open approach to opportunities in AI, advanced materials, commercial space, and other frontier technologies. We aim to connect our industry expertise with external sources of innovation to support technologies and companies with long-term potential through disciplined capital allocation and advance both industrial development and long-term shareholder value through ongoing portfolio management. Let me begin by reviewing the operational performance of our solar and energy storage business, and then update you on our strategic investments. In the third quarter, we continued to deploy an operating strategy that balances sales volume and profitability, advancing the iteration and upgrade of our high-efficiency products and the development of our energy storage business.
Benefiting from higher shipments of high-efficiency products, the continued cost optimization of Tiger Neo 3.0, and improved profitability in our energy storage businesses, our operating performance improved significantly both year-over-year and sequentially. Gross margin was 12.3% in third quarter, up approximately 8 percentage points sequentially and 5 percentage points year-over-year. Net loss and adjusted net loss both narrowed significantly on both a year-over-year and sequentially basis to $25.4 million and $1.2 million, respectively. Looking ahead, we will build on three core pillars, namely technical innovation, globalization, and AI transformation, to drive integrated solar plus storage development and to convert our technology, manufacturing capability, and global network into a stronger and systematic solution. Looking at the details, module shipments were 15 gigawatts in third quarter. With a strong brand and product capabilities, we continue to expand our footprint in high-value overseas markets.
In the third quarter, overseas markets were the primary destination for shipments, accounting for around 70% of the total. We continue to optimize our product mix, with the shipments of Tiger Neo 3.0 modules exceeding 5 gigawatts during the quarter and commanding a premium for approximately $0.01 per watt over conventional modules. We also made progress with the capacity ramp-up with Tiger Neo 3.0, with production cost continuously improving. We are well aware that technological innovation with real long-term competitiveness should not pursue an efficiency breakthrough alone. It must also meet customer needs across different application scenarios and deliver tangible economic benefits through scaled mass production. Recently, we launched the next-generation Tiger Neo 5.0 All-Black premium resi module based on the TAC technology platform, featuring power output of up to 510 watts and module efficiency of up to 25.52%.
Leveraging our core TAC technology, we will focus on our global premium resi distributed generation market segment, particularly residential rooftop applications. We are planning to gradually ramp up production and shipments over the next two years in line with the market demand and industry conditions. At the same time, we will continue to strengthen our network through relationships with installers and end customers and improve both product competitiveness and local service capability so that our technological advantages translates more effectively into a commercial value. We are pleased to see our energy storage business deliver growth in both sales volume and profit in third quarter. We recognized approximately 1.75 gigawatt hour of energy storage shipments as revenue, matching the total recognized for the whole of last year, with the business also generating positive quarterly operating profit for the first time.
We are actively advancing the application of our proprietary PCS products and continuing to explore opportunities in emerging scenarios such as data centers. Going forward, we will further optimize our geographic and order book mix and deepen the synergies between solar and storage across customer resources, sales channels, and technical services in order to deliver more sustainable growth and profit contribution. The PV industry is at a critical stage of supply and demand adjustment as the relevant national authorities continue to promote the orderly and well-regulated development of the industry through stricter standards and higher technical and energy efficiency requirements. We expect these measures to support the gradual phase-out of less efficient capacity and competition to focus more on technological innovation, product quality, and customer value.
We will maintain our operating strategy of balancing sales volume and profitability, continue to optimize our product and order book, and exercise strict control over capital expenditure in order to make the improvement in our operating performance more sustainable. We expect module shipments of between 16 gigawatts and 18 gigawatts in fourth quarter. For full year 2026, we expect energy storage system shipments POD of approximately 10 gigawatt hour. By the end of 2026, we expect to have approximately 40 gigawatts of high-efficiency capacity that meet Level 1 national energy efficiency requirements. Alongside the progress in our core solar and energy storage business, we continue to invest in semiconductors, AI, energy storage, and other frontier technologies in third quarter, with total and follow-on investments of approximately RMB 330 million, of which approximately RMB 254 million came from the company's own capital.
This includes KiwiMoore, a producer of full-stack AI networking products and a solution specializing advanced chiplets and chip interconnection technologies, and TIGSTOR, a company focused on the development and application of supercapacitor technologies. We also saw continued progress across our strategic investment portfolio during the quarter. SiliconFlow completed the second tranche of its Series B+ financing round and its Series C financing round in September 2026. StepFun launched its STEPX terminal brand and related AI terminal products in July, further extending application of its large language models in end-user devices. More recently, Adaspace Technology, another of our portfolio companies, passed the listing hearing of Hong Kong Stock Exchange. In terms of the portfolio management and value realization, at the end of third quarter of 2026, the fair value of our strategic investment portfolio was approximately RMB 2.05 billion.
During the first nine months of 2026, our portfolio generated gains of approximately RMB 327 million, comprising approximately RMB 82 million in realized gains and approximately RMB 244 million in unrealized fair value gains. Over the same period, portfolio exits generated approximately RMB 386 million in cash proceeds. Notably, having divested a substantial proportion of our equity interest in LAPLACE in the first half, we completed the exit from our remaining equity interest in third quarter, generating additional cash proceeds of approximately RMB 38.7 million. Our initial investment in LAPLACE was approximately RMB 65 million, and the investment generated cumulative gains of approximately RMB 357 million. Looking ahead, we will remain selective in pursuing investment opportunities, balancing new investments against exits based on the operating performance and value realization path of each portfolio company, and improving capital utilization efficiency.
By improving the performance of our core solar and energy storage business and progressively realizing the value of our portfolio, we remain committed to creating sustainable long-term value for our shareholders. This concludes my remarks, and I will turn the call over to Craig.
Thank you, Dimi. With our focus on high-efficiency products and high-value markets, the continued growth in revenue contribution from our energy storage business, and the unremitting cost control initiatives, we achieved a steady improvement in our financial performance. Gross margin was 12.3% in the third quarter, up 8.1% sequentially and 5% year-over-year. Loss from operations and net loss narrowed significantly both sequentially and year-over-year. Operating cash flow was approximately $91 million for the first nine months of 2026, as we continued to optimize our cash flow management. We will continue to balance sales volume and profitability and to control cash flow. We expect full-year operating cash flow to improve compared to last year. Now, let me walk you through our third-quarter financial results in more detail.
Please note that all year-over-year and sequential percentage changes in monetary figures are calculated based on an CNY basis, and the corresponding USD amounts are provided for reference only. Total revenue was $2.03 billion, up 10.2% sequentially and down 15.7% year-over-year. The sequential increase was mainly attributable to growth in revenue generation from our energy storage system and an increase in the average selling price of solar modules, while the year-over-year decrease was primarily due to a decrease in the shipment volume of solar modules. Gross margin was 12.3%, compared with 4.2% in the second quarter of 2026 and 7.3% in the third quarter of 2025. The sequential and year-over-year increase were mainly driven by continued cost optimization in our high-efficiency production lines, and the increased share of high-efficiency product shipments, and a greater contribution from higher-margin energy storage system revenue.
Total operating expenses were $261.2 million, down 10.2% sequentially and 32.3% year-over-year. The sequential decrease was primarily due to lower expected quality loss in the third quarter of 2026, while the year-over-year decline was mainly due to a reduction in the impairment of long-lived assets and lower expected credit losses. Operating expenses account for 12.9% of total revenue, compared to 15.8% in the second quarter of 2026 and 16% in the second quarter of 2025. The recovery in gross margin and the decrease in operating expenses together narrowed our losses from operations to $11.9 million in the third quarter. Operating loss margin was 0.6%, compared with 11.6% in the second quarter of 2026 and 8.7% in the third quarter of 2025.
Net loss attributable to Jinko Holdings Limited ordinary shareholders was $25.4 million in the third quarter of 2026, compared with $103 million in the second quarter of 2026 and $105 million in the third quarter of 2025, improving both year-over-year and sequentially. Excluding the impact of the change in fair value of long-term investments, gain from disposal of subsidiaries, impairment of long-lived assets, and share-based compensation expenses, adjusted net loss attributable to Jinko Holdings Limited ordinary shareholders was $1.2 million in the third quarter of 2026, compared with $134 million in the second quarter of 2026 and $57.5 million in the third quarter of 2025, improving both year-over-year and sequentially. Now moving to the balance sheet.
At the end of the third quarter, our cash equivalents, and restricted cash was $2.32 billion in total, compared with $2.1 billion at the end of the second quarter of 2026. Accounts receivable turnover days were 103 days, compared with 113 days in the second quarter of 2026. Inventory turnover days were 133 days, compared to 125 days in the second quarter of 2026. At the end of the third quarter, total interest-bearing debt was $6.73 billion, compared to $6.62 billion at the end of the second quarter of 2026. Net debt was $4.41 billion compared to $4.12 billion at the end of the second quarter of 2026. This concludes our prepared remarks. We are now happy to take your questions. Operator, please proceed.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Philip Shen with Roth Capital Partners.
Hey, guys. This is Oscar Chim on for Philip Shen. The first question is on margin for your core business. Just want to know, do you see further opportunities to improve your margin by optimizing your product and geographic mix in 2027, even if that could mean lower shipment volume versus 2026? What is your outlook for module ASP in Q4 2026 and 2027? I have follow-up questions. Thank you.
Hey, this is Charlie Cao talking. Looking to next year, 2027, we did, I think, have the opportunity to optimize the product mix, the shipment to different regions, including the segment utilities and the resi distributed generation segment. That will be the key driver for Jinko. We are on the track to have the mass production for the Tiger Neo 3.0. This year's the key products, and we believe next year we are in a good product mix and capacity mix. The next key task will be optimize the mix of the shipment to different customers, regions, and segments. If we're talking about ASP, we believe it's already bottom up, and we expect it's going to be stabilized with the capacity based on next year.
We strongly believe the current profit margin and the price is not sustainable, and we need to have a kind of recovery next year.
Okay. Second question, could you quantify any impacts of freight or elevated energy costs on your Q3 cost margins? Do you think those impact could persist into 2027?
It did have because shipment, particularly I think the most important significant impact is the shipment logistics cost, getting the Middle East conflict and the very high price for the oil and gas. We build a base case. It could be the high energy price will be last for few quarters, but second half year or next year, we believe it's going to get back to the normal status.
Okay, that's helpful. Last question for me. I'm interested in your strategic investment business. Now with the strategic investment becoming an additional value driver, how significant do you expect this platform to become relative to your core solar business over the next few years in terms of maybe capital deployment or earnings contribution? How is the management team allocating the time and resources between the core and investment business?
Before talking to details of strategic investment, I'd like to highlight two parts. Jinko Holdings is kind of holding companies. One of the assets is 55% roughly equity, China-based A-share, Jinko Solar, whose business is integrated solar and plus storage business. That is one of the key assets. From the Jinko Holdings company perspective, I believe from long term, it's just kind of the controlling shareholders. It's not going to have the plan to make the additional allocation of capital to the Jinko Solar manufacturing A-share business. On top of that, because they have the sizable resources and cash resources. In the last few years, they started to build a very strong investment teams. Starting from initially, it's kind of the focus on the key equipment and the material and kind of startup companies for the solar storage business.
Gradually, they expand the investment group scope to the AI, kind of large model companies and a lot of chip companies, the industries. Back to your question, they're not going to allocate additional capital to the manufacturing business. The focus will be the kind of strategic investment including traditional solar storage related and to more broad, high-tech sectors.
Okay, thank you. I will pass it on. Thanks.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Rajiv Chaudhri with Sunsara Capital.
Good morning. First of all, congratulations on a very strong performance across both storage and the basic module business. That is the first thing. The question I want to ask first is about storage, actually. You are suggesting that the shipments in the fourth quarter will be around 5.5 gigawatt hours to get you to the 10 gigawatt hours for the year. But in terms of recognizing revenues, you have a lot of revenues from last year that probably still have not been recognized, and your shipments this year have also been ahead of your revenue recognition. When you combine all that with a very strong shipment quarter in the fourth quarter alone, what sort of revenue recognition should we be expecting?
Is it going to be in the 6 or 7 or 8 gigawatt hours of revenue recognition, which would be three to 4x what you recognized in the third quarter? Can you give us a sense of that?
Okay. For the big picture, the storage business, it is kind of like the solution, turnkey business. It is going to go through a lot of procedures, shipment acceptance, and commissioning. Typically, different regions, it takes about six months to 12 months to fulfill the obligations and recognize revenue on the financial statements. It is a little bit late recognitions nature. Back to your questions, last year, 2025, we have 5 gigawatt hours shipments and 1 gigawatt hours revenue recognitions. The gap delayed last year from last year's 4 gigawatt hours. For this year, the shipment is 10 gigawatts, but we roughly estimate the revenue recognition could be 6 to 7 gigawatts. If you look at two year together, we have five plus 10, 15 gigawatt hours shipments in two years, and revenue recognition is roughly seven to eight.
There are roughly 7 gigawatt hours will be delayed to next year for commissioning and for revenue recognitions.
Great. Thank you. That also means that you will recognize about three to 4 gigawatt hours in the fourth quarter, is what you are suggesting?
I think in the first nine quarters, for the first nine months, and we have roughly, I think, 3 gigawatt hours, a little bit over than 3 gigawatt hours for the three quarters. But the fourth quarter should roughly be, I think, three. One quarter is roughly equal to the last three quarters.
Okay. Next question I have is about the geographic distribution of module sales. Could you tell us about the sales that you had? I know you said 70% outside of China, but how much of it was in the U.S.?
For the third quarter, roughly, I think, let me do the calculation roughly. It is still 1 gigawatt modules a quarter in the third quarter.
Third quarter was 1 gigawatt. What do you expect the fourth quarter to be in the U.S.?
I think it is quite similar, close to 1 gigawatt.
Can you comment on your shipments into India? What kind of shipment did you do in India in Q3, and what do you expect in Q4?
Okay. I think I'm not maybe exact numbers, but the big picture, India has a trade barrier to China, made in China products. Our shipment, the module shipment to India is not so significant. We look at the big region, that is the Asia Pacific region. That is our big market, but India is very small, not so big.
I see. Okay. Moving on to the Previously, you used to break out the shipments of wafers and cells. You have not broken them out in the last two quarters. Is that because they are close to zero, or you have changed your reporting policy?
I think we didn't change the reporting policies, but the majority part, 90%, maybe 95% is module revenue. I think we did emphasize the wafer and cell revenue because typically it's kind of low-efficiency products.
Right. Okay. Final question is on the gross margin. There was a nice improvement in gross margin in Q3. I suspect that was even though the module margins were up very nicely, the gross margin in storage is still higher than the gross margin in modules right now?
Yes. The gross margin storage business roughly 15%-20%, which is the 10% the module gross margin, but the revenue contribution is not significant, roughly 5%-6%. I think that from margin perspective combined together from the module storage business, maybe 1%-2% impact.
I see. My final question is on the gross margin expectation for the fourth quarter. You said that Tiger Neo 3.0 modules exceeded 5 gigawatts in Q3. What kind of shipment number are you thinking for Q4?
You mean gross margin or shipments?
Well, shipments first, then related to that, I guess, would be the impact on the gross margin, right?
Yeah. We did have more the Tiger Neo 3.0 product shipments, and Q3 roughly 30%, and Q4 roughly 40%. So gradually increased 10%. That will be have impact on the gross margin as well. But Q4, the gross margin, we did see some pressure, particularly we expect relatively more shipment to China, as well as we have some contracts, long-term contract we signed in the beginning of this year. We may need to deliver by the end of this year. So, back to your question, but it is a kind of one-quarter impact, but we expect with relatively higher mix percentage from high-margin product did help the gross margin, but from the country shipments, with more shipment, China typically Q4 is the peak season for China. It have some kind
When you net it all out, and also you will have more shipments of storage, we should still expect gross margin to improve sequentially?
It did help. It did help, but anyway, we think Q4, we did face some pressure on the gross margin overall, particularly more shipments to China.
I see. The higher shipments to China will bring the gross margin overall down from the third quarter level?
It is depending on
Or it will not allow it to expand?
Yeah, there is a lot of factors. Particularly, if you look at the commodity price, it looks like some material cost is up, some is down. Anyway, we think Q4, we tentatively, we are giving more shipment to China. We face some headwinds for the gross margin.
I see. My final question is on shipping costs. Can you tell us what has been happening with shipping costs in Q3 and what we should expect in Q4?
It is stable, but it is on the high level, particularly for the shipment to the Middle East regions. It has kind of the ripple effect because the oil price is high. Now it is kind of $100, right? It is going to have impact on the overall shipment to different regions. But the most impact countries and regions is the Middle East, Red Sea, you know, the regions.
I see. Okay. Thank you.
Thank you.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. We will just pause for a moment to allow questioners to enter the queue. Once again, that is star one on your telephone and wait for your name to be announced. We are showing no further questions at this time. That does conclude our conference for today. Thank you for participating. You may now disconnect.