JinkoSolar Holding Company Limited EBITDA surged on 55.3% and EBITDA Margin increased on 2.3 pp from 3.6% to 5.8%
03/22/2019 • About JinkoSolar Holding Company Limited (
$JKS) • By InTwits
JinkoSolar Holding Company Limited reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 5.8% in 2018, 3.6% in 2017, 10.0% in 2016, 11.3% in 2015, 13.8% in 2014
- JinkoSolar Holding Company Limited has high CAPEX intensity: 5 year average CAPEX/Revenue was 15.8%. At the same time it's a lot of higher than industry average of 7.6%.
- CAPEX is quite volatile: $0m in 2018, $0m in 2017, $0m in 2016, $4m in 2015, $1m in 2014
- The company has potentially unprofitable business model: ROIC is 3.0%
- It operates with high leverage: Net Debt/EBITDA is 8.2x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 5.4%. Annual revenue decline showed slowdown in 18Q4 - revenue jumped on 21.5%. During 2014-2018 Revenue growth topped in 2015 at 54.9% and was decelerating since that time. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.3 pp from 3.6% to 5.8% in 2018. EBITDA Margin declined at -2.4 pp per annum in 2014-2018.
Gross Margin increased on 2.7 pp from 11.3% to 14.0% in 2018. Gross Margin followed a declining trend at -2.5 pp per annum in 2014-2018. SG&A as a % of Revenue increased slightly on 0.97 pp from 9.0% to 9.9% in 2018. During 2014-2018 SG&A as a % of Revenue bottomed in 2017 at 9.0%.
Net Income margin increased slightly on 1.1 pp from 0.54% to 1.6% in 2018.
Investments (CAPEX, working capital and M&A)
JinkoSolar Holding Company Limited's CAPEX/Revenue was 9.8% in 2018. JinkoSolar Holding Company Limited's CAPEX/Revenue decreased on 9.6 pp from 19.3% in 2015 to 9.8% in 2018. It's average level of CAPEX/Revenue for the last three years was 9.8%. Battling declining revenue the company made large investments to CAPEX (168% of EBITDA) but that didn't help at least in this year. CAPEX as a % of Revenue followed a declining trend at -5.0 pp per annum in the last 5 years.
Return on investment
The company operates at low ROIC (3.0%) and ROE (5.6%). ROIC increased slightly on 1.3 pp from 1.7% to 3.0% in 2018. ROE increased on 3.4 pp from 2.2% to 5.6% in 2018. ROIC declined at -1.9 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 8.2x and Debt / EBITDA is 10.4x. Net Debt / EBITDA dropped on 2.8x from 11.0x to 8.2x in 2018. Debt jumped on 23.4% while cash jumped on 61.0%.
JinkoSolar Holding Company Limited has short term refinancing risk: cash is only 23.5% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 8.7x and P/E 1.7x.
Management team
Haiyun Cao "Charlie" is a JinkoSolar Holding Company Limited's CFO. Haiyun Cao "Charlie" has spent 4 years at the company.
Financial and operational results
FY ended 12/31/2018
JinkoSolar Holding Company Limited ($JKS) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 9,979 | 15,454 | 21,401 | 26,473 | 25,043 | -5.4% |
| Gross Profit | 2,240 | 2,931 | 3,869 | 2,992 | 3,514 | 17.5% |
| SG&A | 1,193 | 1,666 | 2,213 | 2,372 | 2,488 | 4.9% |
| EBITDA | 1,380 | 1,752 | 2,137 | 941 | 1,462 | 55.3% |
| Net Income | 673 | 684 | 1,827 | 142 | 406 | 186.8% |
Balance Sheet
|
|---|
| Cash | 1,777 | 2,393 | 2,501 | 1,928 | 3,105 | 61.0% |
| Short Term Debt | 5,126 | 6,032 | 10,709 | 11,887 | 13,185 | 10.9% |
| Long Term Debt | 2,497 | 2,165 | 489 | 380 | 1,955 | 414.6% |
Cash flow
|
|---|
| Capex | 3,002 | 2,990 | 2,137 | 2,565 | 2,451 | -4.4% |
Ratios
|
|---|
| Revenue growth | 41.0% | 54.9% | 38.5% | 23.7% | -5.4% | |
| EBITDA growth | 36.3% | 27.0% | 22.0% | -56.0% | 55.3% | |
|
|---|
| Gross Margin | 22.4% | 19.0% | 18.1% | 11.3% | 14.0% | 2.7% |
| EBITDA Margin | 13.8% | 11.3% | 10.0% | 3.6% | 5.8% | 2.3% |
| SG&A, % of revenue | 12.0% | 10.8% | 10.3% | 9.0% | 9.9% | 1.0% |
| Net Income Margin | 6.7% | 4.4% | 8.5% | 0.5% | 1.6% | 1.1% |
| CAPEX, % of revenue | 30.1% | 19.3% | 10.0% | 9.7% | 9.8% | 0.1% |
|
|---|
| ROIC | 9.3% | 8.1% | 8.3% | 1.7% | 3.0% | 1.3% |
| ROE | 24.4% | 14.5% | 29.5% | 2.2% | 5.6% | 3.4% |
| Net Debt/EBITDA | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x | -2.8x |
JinkoSolar Holding Company Limited ($JKS) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 4,567 | 6,061 | 6,695 | 7,720 | | -20.9% | -23.5% | 4.3% | 21.5% |
| Net Income | 4 | 99 | 189 | 115 | | -94.1% | 109.0% | 1,574.5% | 410.9% |
Balance Sheet
|
|---|
| Cash | 2,578 | 2,300 | 2,689 | 3,105 | | 75.5% | 50.2% | 27.0% | 61.0% |
| Short Term Debt | 11,499 | 12,638 | 12,785 | 13,185 | | 12.4% | 16.6% | -1.7% | 10.9% |
| Long Term Debt | 707 | 856 | 1,433 | 1,955 | | 58.6% | 83.0% | 210.2% | 414.6% |
Ratios
|
|---|
| Gross Margin | 14.4% | 12.0% | 14.9% | 14.7% | | 3.1% | 1.5% | 2.9% | 3.1% |
| Net Income Margin | 0.1% | 1.6% | 2.8% | 1.5% | | -1.0% | 1.0% | 2.6% | 1.1% |
Peers in Semiconductors
Below you can find JinkoSolar Holding Company Limited benchmarking vs. other companies in Semiconductors industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
| MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
| SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
| Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
| Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
| |
|---|
| Median (67 companies) | 54.6% | 8.5% | 4.4% | 10.9% | 5.0% |
|---|
| JinkoSolar Holding Company Limited ($JKS) | | 54.9% | 38.5% | 23.7% | -5.4% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
| NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
| Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
| Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
| Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
| |
|---|
| Median (65 companies) | 46.4% | 47.7% | 48.0% | 49.1% | 51.0% |
|---|
| JinkoSolar Holding Company Limited ($JKS) | 22.4% | 19.0% | 18.1% | 11.3% | 14.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
| Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
| NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
| Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
| Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| |
|---|
| Median (66 companies) | 9.6% | 11.5% | 9.2% | 10.7% | 10.0% |
|---|
| JinkoSolar Holding Company Limited ($JKS) | 13.8% | 11.3% | 10.0% | 3.6% | 5.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
| Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
| First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.6% | 4.7% | 4.4% |
|---|
| JinkoSolar Holding Company Limited ($JKS) | 30.1% | 19.3% | 10.0% | 9.7% | 9.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
| Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
| Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
| Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
| NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.0% | 3.8% | 1.4% | 3.2% | 5.2% |
|---|
| JinkoSolar Holding Company Limited ($JKS) | 9.3% | 8.1% | 8.3% | 1.7% | 3.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
| Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |
| Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
| Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| Himax Technologies, Inc. ($HIMX) | -0.6x | 1.1x | -0.6x | 0.4x | 3.3x |
| |
|---|
| Median (45 companies) | -0.6x | -0.3x | -0.0x | 0.4x | 0.3x |
|---|
| JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
