On July 20, Jinko Power, a clean energy supplier and services provider, disclosed that the company plans to raise up to 3.45 billion yuan ($510.2 million), which will be used for photovoltaic power generation projects and to replenish working capital or repaying bank loans.
Jinko Power was established in July 2011 and listed on the main board of the Shanghai Stock Exchange on May 19, 2020. It is mainly engaged in photovoltaic power station development, operations and related EPC (engineering, procurement, and construction) businesses. By the end of March this year, the company had built photovoltaic power stations in more than 20 Chinese provinces including Jiangsu and Xinjiang. In 2021, the output value of the EPC business of photovoltaic power stations was 356MW, an increase of 56.83% compared with 2020.
Jinko Power, however, also bears great pressure on component costs. In 2021, the construction volume of the company’s EPC business increased. Due to sharp price increases of raw materials, the cost of photovoltaic modules increased, which led to a decrease in the gross profit margin of EPC business of photovoltaic power plants. The gross profit in 2021 was only 0.22%, a decrease of 3.99% from the previous year. In addition, the development, operation and transfer business of photovoltaic power plants also experienced a decline in gross profit.
Financially, in the first quarter of this year, the company’s main income was 573 million yuan, down 18.81% year-on-year. The loss attributable to shareholders of listed companies was 59.8481 million yuan.
Some insiders have pointed out that this is not necessarily the best time to expand photovoltaic power projects. China’s carbon peaking and carbon neutrality goals provide policy support for photovoltaic power construction, but the cost pressure caused by supply chain imbalance in the short term is restricting the growth of installed capacity and operating profit of the company’s photovoltaic power stations. This will then affect the bidding and construction arrangements of the company’s self-sustaining power stations and EPC projects.