JinkoSolar Holding Co Ltd DR

Hello, ladies and gentlemen, and thank you for standing by for JNCO Solar Holding Co. Limited's fourth quarter 2025 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 today for today's call, Ms. Stella Wang, JNCO Solar's Investor Relations. Please proceed, Stella.

Thank you, operator. Thank you, everyone, for joining us today for Zinco Solar's fourth quarter 2025 earnings conference call. The company's results were released earlier today and available on the company's IR website at www.zincosolar.com, as well as our news services. We have also provided a supplemental presentation for today's earnings call, which can also be found on the IR website. On the call today from Zinco Solar are Mr. Lee Hsien-de, Chairman and CEO of Zinco Solar Holding Company Limited, Mr. Ken Lee, CFO of Zinco Solar Holding Company Limited, and Mr. Charlie Cao, CEO of Zinco Solar Company Limited. Mr. Lee will discuss Zinco Solar's business operations and company highlights. Since our panel, Mr. Jenna Miao, is currently on a business trip, I will deliver the remarks on sales and marketing in his behalf. Following that, Mr. Panley will work through the financials. After that, we will open the call for questions. Please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the US 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 Jingkong Solar's public filings with the Securities and Exchange Commission. Jingkong Solar does not assume any obligation to update any forwarding statements except as required under the applicable law. It's now my pleasure to introduce Mr. Li Xiangde Chairman and CEO of Zinco Solar Holdings, Mr. Li will speak in Mandarin and I will translate his comments into English. Please go ahead, Mr. Li.

董事长,可以发言了。 2025年,全球光环业在供需结构调整与贸易环境变化中经历了较大波动。 产业链盈利阶段性承压。 在这充满挑战的环境中,我们坚持稳健经营和技术盈利。 在推进N型TopoCom技术升级和高效率产品的迭代, 2025年全年组件出货量达到86个GW, 第七次威力行业第一。 单数组件价格持续低位, 高功率的产品出货量尚比有待提升, 漏火产能淘汰等因素影响, 全年经营业续能接待性重压, 同比有盈利转位亏损。 4G is due to the increase in raw material prices such as raw materials such as raw materials and the influence of exchange rate fluctuation, and the decrease in interest rates, and the expansion of interest rates. But what is worth noting is that we continue to promote the transformation from product suppliers to comprehensive energy solution solutions providers. The size of the output of energy products is increased in the same way, reaching 5.2 GW. Of which, there is a little GW of confirmed income. The global PV industry continues to experience volatility due to structural imbalances and a shifting trade environment in 2025.

impacting financials across the industrial chain. In this challenging environment, we maintained disciplined operations and our technological leadership continuously driving upgrades of our end-type top-com technology and iterating our high-efficiency products. For the full year 2025, total module measurements reached 86 gigawatts, ranking first globally for the seventh consecutive year. Impacted by persistently low module prices, the elimination of obsolete production capacity, and a still evolving product mix and high efficiency products ramp up, we incurred a net loss for the four year. In the fourth quarter, growth margin decreased sequentially and our net loss expanded due to rising costs of raw materials such as polysilicon and silver. as well as foreign exchange rate fluctuations. However, our energy storage business maintained its rapid growth trajectory, marking an important step in our ongoing transformation into an integrated energy solution provider. Seamless of ESS grows significantly year-over-year to 5.2 gigawatts in 2025, with approximately 1.7 gigawatt hours recognized as revenue. Our deepening penetration into high value markets is expected to more than double ESS shipments in 2026, serving as a primary driver for enhancing our profitability profile.

to lead the industry from the competition of size and price to the competition of quantity and value. The leading enterprises are actively thinking about the demand for high-quality development in the industry, promoting the gradual return of the price to the rational level. As a result, under the pressure of the cost of the price increase in the white silver bidding, the policy of discounting the export withdrawal to the gradual pull of the demand for export, the gradual price return to the 4th quarter has appeared to be obvious. Since the fourth quarter, government guidance supporting the high-quality development of the PV industry has continued to strengthen.

A series of policy measures have steadily accelerated the facing out of outdated capacity and a normalization of market competition, guiding the industry to gradually transition from competing on scale and price to quality and value. Leading companies have actively responded to this high-quality development directive, pushing module prices back to reasonable levels. In the first quarter of 2026, Driven by the pass-through of cost pressures from rising commodity prices, such as silver, coupled with the impacts of export tax rebates on demand, module prices rebounded significantly, sequentially. As the industry's competitive landscape continues to normalize and supply and demand dynamics marginally improve, module prices are expected to remain relatively stable With high efficiency and differentiated products continue to command a premium.

我们持续推动技术突破,引领行业创新方向。 截至2025年底,ENGINE.COM电子实验室效率达到27.79%, ENGINE.COM盖带矿结成的电子效率达到34.76%, We continue to drive technological breakthroughs

and leads the direction of industry innovation. As of the end of 2025, the maximum lab efficiency of our anti-TopCon cells reached 27.79%, while conversion efficiency of our anti-TopCon-based perovskite tandem cell reached 34.76%. As a global leader for TopCon technology, We held over 700 TopCon patents by the end of the fourth quarter, surpassing most of our competitors. Furthermore, we partnered with CrystalPi to drive the application of AI in R&D of Perl of Sky syndrome cell and accelerate the commercialization of next-generation technologies.

我们持续推动产品升级和信赖迭代。 It will not only improve product competitiveness, but also increase the output of high-power products with a capacity of more than 640 watts to 3 gigawatts. Compared to conventional products, there is a price difference of 1 US dollar. With the highest efficiency, it can reach 670 watts. The FIFO3 product series will gradually increase in quantity this year and accelerate penetration in diversified scenarios. The value of high-performance products will gradually be reflected in the advantage, and its price ability will continue to be released.

We continue to drive product upgrades and performance iterations, consistently enhancing product competitiveness. In the fourth quarter, shipments of high-efficiency products that exceed 640 Wp increased sequentially to approximately 3 GW, one US cent premium compared to our conventional products. As our TigerNew, the third generation of TigerNew series, which delivers maximum power output of 670 Wp, sequentially scales up production volume and shipment this year and accelerates market penetration across diverse application scenarios. The value proposition of our high-performance products will increasingly stand out and is expected to command a higher premium.

我们持续强化创业周期的成本控制能力 通过供应链优化技术升级 对冲原材料价格波动影响 您包同的技术开发符合预期 预计2026年将实现大规模放量 我们在智能端的努力也逐步体现成效 以3C超级工厂为代表的灯塔工厂项目 一体化贯通的生产模式 持续提升我们生产效率和成本的竞争力

We continued to enhance our cost control capabilities across market cycles, offsetting the impact from raw material price fluctuations through supply chain optimization and technological upgrades. Development of silver-coated copper technology is progressing as planned. with large-scale production expected to gradually ramp up in 2026. Our initiatives in smart manufacturing have already begun to generate initial results. Through our Lighthouse projects represented by Shanxi Super Factory, our vertically integrated production model continues to improve production efficiency and cost efficiency. providing replicable blueprints for our global manufacturing footprint.

所能业务方面,公司将其作为重要培育的第二增长曲线。 我们持续强化关键技术研发,提升系统解决方案的竞争力, 优化本土化客户服务及全生命周期服务响应能力, 同时依托光伏业务快速构建了全球渠道, 有序放大储能系统的出货规模 关注协同效应逐步前线 截至目前2026年 储能以前订单和高前订单 合计超过10GWh 随着全球能源转型推进 及电力系统对应灵活性需求的提升 储能在新型能源体系中的作用持续增强 展望2026年 我们将持续聚焦高价值市场的布局

We view our energy storage business as a strategically vital second growth engine. We continue to strengthen our R&D for our core technologies, enhance our system solution capabilities, and improve localized customer service and lifecycle support. Leveraging our global PV distribution channels, we are steadily scaling ESS treatments and greater synergies between our solar and storage solutions are increasingly materializing. Currently, our sign and high potential ESS orders exceeded 10 gigawatt-hours in total. As the global energy transition advances and the demand for greater flexibility increases, the role of energy storage within renewable energy system continues to strengthen. Looking ahead to 2026, we will continue to deepen penetration into high-value markets and explore application scenarios, including zero-carbon industrial parks and data centers.

我们持续优化全球制造和供应链布局, 提升对不同市场政策与客户需求的适应能力。 美国两极化实行组建才能保持在较高利用力, 本土化制造和服务能力持续增强。

我们也在积极探索在重要市场的长期参与模式 以更好满足客户对高效产品和解决方案的需求。 We continue to optimize our global manufacturing and supply chain footprint, enhancing our ability to adapt to diverse market policies and customer needs. Our 2GW end-type module facility in the U.S. maintains high utilization rates. as we continue to strengthen local manufacturing and service capabilities. We are also actively developing new models for long-term engagement in K-markets to better address customer demands for high-efficiency products and solutions.

In the end of the year of 2025, Fengguang Leiji is the first power plant to become the first power plant At the same time, renewable energy is fully integrated into the market. The development logic of the industry is expanded to focus on operating capacity and value improvement. It proposes higher requirements for the technology and product competitiveness of enterprises. The recent global energy market fluctuations further emphasize the importance of energy security. It is also continuously strengthening the long-term value of renewable energy. In the long term, with the new electricity system, 2025 marks the final year of the 14th five-year plan.

during which cumulative installed capacity of wind and solar power surpass the qualified power for the first time, becoming the largest source of electricity generation. At the same time, solar power generation has fully entered a market driving phase. The industry's development framework is shifting from scaled expansion towards greater emphasis on operational capabilities and comprehensive value creation which raises the competitive bar for technology and products. At the same time, recent volatility in global energy markets has highlighted a critical need for energy security, reinforcing the long-term value of renewable energy. Looking forward to the medium to long-term as the construction of new power systems advances and a new load demand grows from data centers, for example, application scenarios for solar storage will continue to broaden, enhancing the value of green power. Industry competition will gradually transition from being cost and skill driven to a model centered on technological innovation, product competitiveness, and the ability to deliver integrated solar flat storage solutions.

我们将持续巩固技术零线优势 深化全球化布局 加快关注一体化发展 不断提升综合解决方案能力 在行业格局和重塑过程中 持续增强公司的长期竞争力及盈利能力 话题交给接待之前 我来介绍一下业绩指引 预计2026年底 我们的一体化产能将达到约100个GW 其中海外一体化产能是4个GW

We will continue to consolidate our technological leadership, deepen our global footprint, accelerate the development of our integrated solar plus storage strategy, and consistently improve our capabilities to deliver comprehensive solutions. This will steadily strengthen our long-term competitiveness and profitability as our industry landscape reshapes. Before turning over to Jenner, I would like to go over our guidance for the full year of 2026. We expect annual integrated production capacity to reach approximately 100 gigawatts by the end of 2026, including 14 gigawatts from overseas facilities. We expect the module measurements to be between 13 gigawatts and 14 gigawatts for the first quarter of 2026, and between 75 gigawatts and 85 gigawatts for the full year 2026. Thank you, Ms. Lee. We are pleased to report that both our robust global sales networks and strong product competitiveness drove quarterly and annual module measurements Once again, ranking first across the industry, total shipments were 26 gigawatts in the fourth quarter, with solar module accounting for nearly 93% of the mix. For four years, total module shipments were 86 gigawatts. Geographically, overseas markets remained our primary driver, accounting for about 60% of total module shipments in 2025. We actively capitalized on growing demand across Asia-Pacific and emerging markets, which together accounted for nearly 40%. Siemens to the US were in line with our expectations and accounted for approximately 5%. We continued to optimize our product mix, increasing the proportion of high-efficiency product Siemens and focusing on high-value application scenarios. These high-efficiency modules Highlighted by the TigerNEW, the third generation of TigerNEW series have earned widespread recognition for their higher power generation and a better LCOE. The order book for these modules has grown steadily since the fourth quarter, allowing us to command a premium over conventional products. As we continue to enhance our product competitiveness, Our brand reputation and customer recognition have strengthened in tandem. In beneath the latest global energy storage Tier 1 list for the first quarter of 2026, we are recognized as a Tier 1 energy storage provider for eighth consecutive quarter. Furthermore, we achieved an S&P Global CISC score of 78 points, the highest one among PV module companies. and we were included in the 2026 Certain Ability Yearbook. On the demand side, recent policy guidance and discussions during China's two sessions and subsequent industry forums have reinforced the strategic focus on energy efficiency, carbon reduction, and zero-carbon industrial parts. This provides a solid foundation for the continued growth in China's solar market during the 15th five-year plan. Globally, the ongoing global electrification process, the continuous growth of new power loads from data centers, and increased focus on energy security following recent energy crisis are collectively driving demand. Local solar and solar-plus storage solutions and their deployment flexibility are ideally positioned to address these issues. Enhancing energy system resilience and facilitating seamless incremental power demand for countries. By the end of the fourth quarter of 2025, cumulative global module measurements surpassed 390 gigawatts, with our sales network covering nearly 200 countries and regions. Notably, total cumulative measurements of our target new series exceeded 220 gigawatts, ranking first in industry, as we continue to reinforce our global market leadership and a strong customer base. 2026 marks our 20th anniversary, and we are using this milestone as an opportunity to further strengthen our product, brand, and customer service systems to continuously enhance our competitiveness in the global market. With that, I will turn the call over to Ken.

Thank you, Stella. In the challenging fourth quarter, we achieved a 20.9% sequential increase in solar module shipments, and a slight sequential increase in total revenues. Our operating efficiency improved significantly from last quarter. Operating cash flow was approximately $470 million in the fourth quarter and $280 million for the full year 2025, hitting the target we set at the beginning of the year to reach positive full-year operating cash flow. Looking ahead to 26, we expect full-year operating cash flow to remain positive. Looking at our fourth quarter financials in more details, total revenue was $2.5 billion, up 8.3% sequentially and down 15% year-over-year. The sequential increase was primarily driven by an increase in solo module shipments, while the year-over-year decrease was mainly due to a decrease in average selling price of modules. Gross margin was 0.3% compared with 7.3% in the third quarter, 25%, and 3.8% in the fourth quarter, 24%. The sequential decrease was mainly due to a higher unit cost for products sold, while the year-over-year decrease was mainly due to a decrease in average selling price of modules. Total operating expenses were $73.6 million, up 28% sequentially and 21% year-over-year. The sequential and year-over-year increases were mainly due to an increase in the empowerment impairment of long-lived assets in the fourth quarter of 25. Total operating expenses accounted for 18.9% of total revenues compared to 16% in the third quarter. Operating loss margin was 18.6% compared with 8.7% in the third quarter. Now let me briefly review our 25 full-year financial results. Total module shipments were 86 gigawatts, down 7.3% year-over-year. Total revenues were about 9.4 billion, down 29% year-over-year. The decrease was mainly attributed to the decrease in the average selling price of solar modules. For the full year, gross profit was US dollar 201 million, a decrease of 86% year-over-year. Gross margin was 2.2% compared to 10.9% in 24, primarily due to a decrease in average selling price of modules. Total operating expenses were $1.48 billion, down 23% year-over-year, primarily due to a reduction in shipping costs driven by lower volumes of solar module shipments, and declining average freight rate in 25, as well as lower employee compensation costs. Operating loss margin for full year of 25 was 13.6%, compared with 3.6% for the full year of 24. Excluding the impact of the changes in fair value of convertible notes issued by Jingguo Solar in 23, changes in the fair value of the long-term investments, share-based compensation expenses, the net loss resulting from a fire incident at one of our production facilities in Shanxi Province in 2024, and the impairment of the long-lived assets Adjusting net loss attribute to Jinko Solar Holdings, the ordinary shareholders were about $4.8 million in 2025. Moving to the balance sheet, at the end of the fourth quarter, our cash and cash equivalents were $3.3 billion compared even at the end of the third quarter of 2025. at $3.8 billion at the end of the fourth quarter of 2024. Air turnover days were 94 days compared with 105 days in the third quarter. Inventory turnover days were 75 days compared to 90 days in the third quarter. As these metrics show, operating efficiency is steadily improving. At the end of the fourth quarter, total debt was about $6.7 billion compared to $5.56 billion at the end of the fourth quarter of 2024. Net debt was $3.44 billion compared to $1.76 billion at the end of the fourth quarter of 2024. This concludes our prepared remarks. We are now happy to take your questions. Operator, please proceed.

Thank you. If you would like to ask a question, please press star 1 on your telephone and waive your name to be announced. If you would like to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Philip Shen from Roth Capital Partners. Please go ahead.

Hi, everyone. Thank you for taking my questions. Wanted to get your outlook and assumption for pricing for Q1 and Q2. I think in your prepared remarks you said you expect the global ASP to be stable, but are you assuming 10 cents a lot in Q1 and Q2? And then can you also talk about your gross margin cadence as we get through the year? Do you think Q1 is a low, you know, is it lower than Q4?

And can it go higher from here? Thanks. Hello. Are you guys speaking?

Did you guys hear my question?

Oh, sorry. Phillip, this is Charlie. I'm using my phone. Can you hear me?

Okay. Hey, Charlie. Yeah, I can hear you now. Okay.

Let's get back to the question. And, you know, if you look at the price index, the market pricing, and I think the module price, and it's rebounding in the last three to five months, and reflecting the cost-inflating, and as well as I think most of the tier one companies is more disciplined, and as well as there's a act of anti-involution. And if talk to specifically Q1 and Q2, the HP we expected, you know, quarter by quarter, the SP will improve and, uh, gradually. And, uh, it's a combination of the, uh, uh, the pricing, fishing, uh, inflation as well as, you know, we, uh, marketing the next generation tiger near street, you know, high inflation products. And, uh, that is, uh, I think we get a lot of attention from our customers and there is a price premium. So it's a combination. I think the market price is up and players are more disciplined and we have more mix on the high inflation products.

Great. And so we can see the pricing improved.

So can you quantify at all? So Q1, do we see 11 cents? Q2, do we see 12? And then can you also speak to Q1 and Q2. Thanks, Charlie.

Yeah, I think we're not in a position to disclose the detail, ASP, for looking. But if you look at the market price, I think you're right. It's kind of the price level, depending on different products and different ratings. It's roughly in the range of, I think, $11.5 or maybe $2. you know, depending on different market, different products in different regions.

Okay, and then the question. Thank you. Thank you.

Your next question comes from Rajiv Chaudhry from Sunsara Capital. Please go ahead.

Good morning. I just have a few questions. The first one is on the gross margin impact of the three factors you mentioned in Q4, the foreign exchange, the US dollar rate, cost of silver, and the cost of polysilicon. Can you break down for us the significance of each of these factors and just give us if these factors had not shifted from Q3, what the gross margin could have been in Q4, so we understand what the impact was?

Yes, I think, you know, so back to the questions, I think if nothing changed, I would expect the Q4 margin should be stable or maybe a little bit higher, you know, in the fourth quarter. But first quarter, there's some headwinds. You are talking about if we look at the magnitude, the first one will definitely be the commodities, particularly the silver. And I think the market price is up 250. 50% to 300%. That's a dramatic change. And second one will be the RMB, you know, appreciations. And the polysilicon is not, the price is a little bit higher in Q4, but it's not significant impact.

Okay. So silver was number one, the exchange rate number two, and polysilicon much less. Great, thanks. Next question is on depreciation and capex. What were the depreciation and capex numbers for 2025 and what is your target for 2026?

The depreciation per year in 2025, it's roughly one, sorry, one billion US dollars one billion US dollars and the per year okay so and and the the the the car parks and in 2025 I think it roughly it's the same number number it's a one billion US dollars it's a totally different number okay it's a coincidence and definitely it's an event six we uh we you know we will further cut the capex is roughly uh i think you know roughly five billion rmb and the roughly 700 million us dollars and we we make the investment on the you know capex particularly the last year it's uh the the purpose is upgrades the uh roughly 40 gigawatts capacities to the next generation technology. We call it Tiger Nier 3. But we don't have any, you know, additional investment plan in 2026. By 2026, the payment is the outstanding, you know, the payable to the suppliers.

I see. Thank you. Okay. And the other question is on market share and size of market. Can you give us an idea what you think the market size was in 2025? And obviously that will allow me to calculate your market share. But related to that is a question of your guidance and the market share that you expect to get in 2026.

Last year, we delivered roughly 85 gigawatts, the top one in the industry. I think roughly we get 13%, maybe 13% to 14% market share. And we expect 2026, the global demand is a little bit flat, or maybe down a little bit, a small percentage, given last year China reached to the were high peak, over 300 gigawatts. But the overseas market continued to grow in 2006. And it's kind of the short-term, you know, the market size, the total market size, a little bit down in 2006 because of China's specific situations. But for the next year, long-term, we are optimistic. If you look at the conflicting Middle East. I think more and more countries, including China, have more determinations to push more renewable energy. And the energy independence and securities will become more first priorities for a lot of governments. And for 2006, we guided 75 to 85 gigawatts. It's a flat with last year, maybe a little bit lower, reflecting the total market size in 2026. I'm talking about, you know, in 2026, the total market could be a little bit lower compared to last year. And basically, I think the market share will be relatively stable. But the key operational target will be improve, significantly improve our financial performance and maintain our healthy operational cash flows. And we will more focus on the high value customers and both from the utility segment and the DG segments as well.

I see. So would you expect in this scenario that the share of international will be even higher than last year in your sales?

I think so. I think so because we are trying to lower our exposure in China and Definitely, China last year took around 40% of our shipments in 2025 for Jinko. And I expect, you know, 2026, China, the percentage will be lowered to 30%, maybe a little bit lower. And we get more market share from the overseas market, particularly the markets with, you know, more more disciplined and the customer like to pay for the branding, the qualities, and the high-increasing products.

So, Charlie, if some of the Tier 3 and the weaker companies are getting out of the market, shouldn't we expect your market share to grow in 2026, even if the market overall is down? Are you just being very conservative here?

No, unfortunately, it's not a conservative estimation. And we think, you know, this year is kind of the, how do you say, transition year. And next year, we are looking forward to a lot of good opportunities. And we believe, you know, this year, you're right, a lot of Tier 2, Tier 3 even opportunities uh relatively bigger guys will be facing uh i think degradation issues or maybe consolidation issues and we what we want to do is we penetrate their market with you know with customers who is willing to be you know they pay a reasonable price and we are able to you know get our I think, reasonable, you know, probabilities.

Charlie, final question. On the exchange rate, you know, obviously, you experienced a negative margin pressure because the dollar weakened, sorry, the dollar weakened against the renminbi. And your products are priced in dollars globally. Would you consider shifting that into pricing globally in RMB so that in future, as the dollar continues to weaken against RMB, that you are not punished for it? Because it seems to me that it makes sense to consider this as a strategic rethink.

We're trying to diversify, minimize the risk of fluctuations in currencies. And if you look at it, you know, the, the price, you know, determinations in your sales orders, it really depends on, you know, the, the customers, how they views, uh, their exposures. Uh, most of customers, I think the PPA is still us dollars. So it's a kind of natural hits when they pop out of the modules from the, uh, module makers about some, you know, customers willing to pay, you know, in RMB, denominated, and we are encouraging, you know, the customers who is willing to switch to the RMB to a little bit lower the exposure, you know, currency exposures. And on top of that, I think the currency hedging, we are continuing to do that. It's a little bit difficult, but we're trying to minimize the impact. And for the pricing impact, we periodically reassess the possible, you know, the the exchange rates and put into the pricing for the future sales order. Thank you.

I see. Thank you. Thank you very much.

Thank you. Your next question comes from Alan Lowe from Jefferies. Please go ahead.

Hello. Can you hear me?

Yes. Please go ahead.

Yeah. Yeah, thanks Charlie. Thanks for taking my question. So, first of all, I would like to understand the company's view on its potential collaboration with the US leader in its local plan in both the space-based solar and also its a huge local 100 gigawatt deployment. Heard that Ghana was on the ground with some progress. So we'd like to know if the company would share updates on that front. And another thing is recently seems there's market discussion on China may be prohibiting or stopping the export of solar equipment as well. So would this impact that collaboration? Thank you.

uh thanks for the questions and for the second question i didn't have any uh information to comment and uh i know there's some kind of message even pop uh popular news from uh overseas media channels and uh but for the i think you are talking about you know the us you know the tesla spacex and It's probably information Elon Musk is making very bullish and plan to build and 100 gigawatts by Tesla and 100 gigawatts by SpaceX. And I think it's why they have such a bullish plan. I think particularly from Tesla perspective, I think the public news show, okay, because, you know, the AI, it is, you know, there's a lot of demand for electricity, renewable energies, and the U.S. is lack of the electricity, and the renewable energy will be the final solutions. And I think, you know, we... Tesla, I think they have visited a lot of equipment suppliers and the manufacturing, including Jinko Solar. They have decided the technology could be Topcon, but we don't have any further information to disclose. But again, Jinko is a pioneer and innovators for the Topcon technology. And we have, I think, the most powerful capabilities to build integrated capacities, digitalizations, and have a very strong, powerful patents as well in the goal. And we are quite open to explore the corporations' opportunities and with partners in different countries. And you can, so that is the information I think I can share. But in summary, I think the probably information show, okay, the Tesla space has a plan to build capacities. They are doing a lot of work, including building Chinese manufacturing. But we, from Dingo perspective, we didn't have any,

further information to discuss and but we are open you know for the business opportunities opportunities if any thank you thank you good luck for the um yes for the potential chance or collaboration but and then to follow up um uh is there any um what's your view on the um uh pattern popcorn pattern lawsuit raised by First Solar. So are you seeing this is impacting your shipment in the US or it's not really affecting shipment for now?

Yeah, we don't expect any, you know, disruptions or impact in our business and ongoing business in the United States and uh, the first solar litigations and we have been actively engaged, uh, experienced lawyers and, uh, to, uh, to fight, uh, to fight, you know, and, uh, we, we don't believe we infringe the relevant patents of first solar. And, uh, we did research for the production process. We don't believe it's, you know, it's, uh, uh, it, it, it, it is relevant. And, uh, On top of that, we have a very solid experience a couple of years ago to deal with 337, with Hangua Solar, and with Wayne in the final. But again, we do a lot of preparation work, but we are confident there is no impact for our operations in the United States.

Understood, clear. So switching here to the FEOC-related issues, I would like to know, I think probably for this year, there are sufficient projects already safe harbored for this year. So wonder if you may share with investors on your plan on meeting the FEOC requirement going forward, like is there any progress in sourcing partner, et cetera?

yeah and i i think there's a lot of the safe harbor you know the downstream projects and the project will uh will get you know uh get through the constructions and the connections you know next two or three years and for the uh landfill compliance for the manufacturing in our Florida facilities, and we are in the final stage, and we're still negotiating with potential investors. And if there is any significant make-through, we will make the announcement. And we expect it to be closed in the next couple of months.

Understood, that's very good news. And then I would like to switch gears to ESS. I think the chairman has guided on the shipment that in 2006, the shipment may be doubled. I wonder if you might share in which region those shipment is going to be and is there any AI data center related deals that is being negotiated or in discussion?

For the storage, yes, it's finished. And AI DC is definitely a very hot topic and we are actually in the early stage and the discussion with a few potential customers. And we plan and I think we hopefully we are able to finalize some deal by the end of this year. And for the storage shipment by regions, and China really take our small percentage, and it's roughly 10 percent to 15 percent. Our focus will be the Europe, Latin America, and some projects from Middle East and the Asia-Pacific regions. So that's the breakdowns. In the U.S., last year we shifted around 600 megawatt hours, and we are building solidify our teams, and hopefully we can make significant breakthrough in the U.S. market in 2036 as well.

Understood. So is there an expected gross margin target on the ESS side of the business?

We estimate to be 10% to 15%. We did have a very good backlog last year, and the industry is facing the increase of the price of lithium But we're trying to manage and minimize exposures, but we estimate could be a range of 10% to 15%.

That's right. I think my last question is on the shareholders' return. I wonder if the company, what's the pace of the buyback of the company? Is there any further shareholders' return program for this year?

I think we will continue to make the investment return in the combination of the share purchase and the dividend. And it could be, you know, the magnitude we have not determined, but it will definitely do that.

So I think in the past it was around The plan was around 200 million per year, but I'm not sure if this is still the plan or a different situation in the industry for now.

These are U.S. holding companies, and I think now the U.S. company has roughly 200 million U.S. dollars in cash, but we try to make some investments. including solar, robotics, and some relevant industries. So we need to allocate between equity investment and shareholder returns. We have sufficient, I think, cash to return the investment and to return to the investors maybe in a range of 50 to 100 million a year.

That's very clear. So thanks a lot for taking my question, Charlie. Thank you. Thank you.

Thank you. Your next question is a follow-up from Philip Shen from Roth Capital Partners. Please go ahead.

Hey, thanks for letting me jump back in here. Hey, I wanted to ask about the perovskite outlook. You guys have highlighted your efficiencies there in the laboratory and was interested in getting your perspective on when perovskite could be commercialized in your capacity footprint. Are we looking at maybe two to five years, or do you think it's beyond five years? Thanks.

We did make some through the, you know, laboratory for the probabilistic, probabilistic, probabilistic technology and its rating graph is 34 to 45 percent. But talking to commercial mass productions, we think it still have a lot of R&D, you know, work to do. It could be in the next maybe three to five years. And, but it's not, definitely it's not in the near term.

Yeah, okay. Thanks, Charlie. And then in terms of your shipments to the U.S. market, I think you had in your deck 5% of your shipments went to the U.S. What is your expectation for shipments to the U.S. market in 2026? Thanks.

It's 5% to 10%, and it's a little bit of a challenge because of the shortage of the you know solar cell in supplies and but we are trying to you know to to reach to the at least the metal point the midpoint of the five to ten percent is that what you mean yes yes yes got it okay

Can you talk about the source of your non-FEOC cells? Are you sourcing them from the Mideast or where are they coming from?

Thanks. In general, there are several different players and manufacturing, I think, in Africa, in different continents, and I think we are able to secure some of the productions from the suppliers.

Okay. Thanks. And then in terms of, um, the war, uh, just wanted to see if there are any impacts, uh, to the business at all. Um, and then, you know, uh, you have your large manufacturing facility, your building in Saudi Arabia. So want to see if, uh, uh, you have any thoughts on that. Thanks.

Thank you. Thank you. Thanks for the question. I'm the, The Saudi joint ventures, we didn't make any, I think, you know, the big one. It's still in early preparations and waiting for the implementations of the policies, the local policies. So we didn't make any investment and significant investment in the joint ventures. And the Middle East conflict, it's... It has several impacts, but I don't believe it's long-term. Firstly, it will have impact on our shipment to the Middle East, and we take a sizeable market share in the Middle East, and given the logistic challenge, we need to re-plan, work with our customers, we schedule the shipment plans. There is a significant push for the oil price, and it's kind of the fundamental cost for a lot of materials, particularly the chemicals, as well as the logistic cost. So there is some kind of push for the cost from shipment cost, EVA, but we are trying to manage it, you know, you know, level. But I don't believe it's a long-term, but short-term, there's some kind of impact that we can get.

Right. Charlie, how much do you plan, like, what's the plan for shipments to the Mideast before the war? What percentage of your 26 shipments were you thinking?

You mean by year? A year, right?

Yeah, for the full year, like pre-war, were you thinking like 20%?

Yes. I think it's roughly 20%. But it's not impacting all the countries. But it impacts some countries in the short term.

Right.

Right. So in the short term, maybe half of that is maybe challenged by the war?

Yes.

Okay. Okay. Thank you very much. I'll pass it on.

Thank you. Thank you.

There are no further questions at this time. That does conclude our conference for today. Thank you for participating you may now disconnect.