JinkoSolar Holding Co Ltd DR

Hello, ladies and gentlemen, and thank you for standing by for JNCO Solar Holding Co Ltd's second 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, Miss Stella Wang, JNCO Solar's investor relations manager. Please proceed, Stella.

Thank you, operator. Hello, everyone, and thank you for joining us today for ZincoSolar's second quarter 2026 earnings conference call. The company's results were released earlier today and available on the company's IR website at ir.zincosolar.com, as well as on use-while 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 JinkoSolar are Mr. Jimmy Zhu, CEO of JinkoSolar Holding Co Ltd, Mr. Janet Miao, CMO of JinkoSolar Co Ltd, Mr. Pan Li, CFO of JinkoSolar Holding Co Ltd, and Mr. Charlie Tao, CEO of JinkoSolar Co Ltd. Mr. Zhu will discuss JinkoSolar's business operations and company highlights, followed by Mr. Miao, who will provide an update on sales and marketing, and then Mr. Pan Li, who will go through the financials. Management will be available to answer questions during the Q&A session. Please note that today's discussion will contain forward-looking statements made under the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainty. As such, our future results may be materially different from the views expressed today. Further information regarding this and other risks is included in ZincoSolar's public filings with the Securities and Exchange Commission. ZincoSolar does not assume any obligation to update any overlooking statements except as required under the applicable law. It's now my pleasure to turn the call over to Mr. Jimmy Du, CEO of ZincoSolar. Please go ahead, Jimmy.

Hello everyone, this is Jimmy Du and thank you for joining JinkoSolar second quarter 2026 earnings call. It is an honor to take the role of CEO. I appreciate the trust the board of directors and management team have placed in me. Standing at this milestone of our 20th anniversary as we embark on the next stage of development, I look forward to working closely together to further enhance our operating performance and a strategic execution to drive sustainable high-quality growth. I will begin by reviewing our operational performance in the second quarter and then outline our key priorities going forward. In the second quarter, module shipments increased sequentially to approximately 16 gigawatts. Supply and demand imbalances across the PV industry remained dynamic. These pressures were further compounded by shifts in domestic and overseas policies with prices across the supply chain and industry probability remaining under pressure. As the cost of ramping up, our high-efficiency products remained evaluated during the quarter, together with impact of delivering certain low-value orders. Growth margin decreased sequentially during the quarter, while our net loss expanded. Facing this operating pressure, we optimized our order books and geographic mix Rationally manage utilization rates and continue to expand the proportion of high-efficiency products within shipments while introducing technologies that lower costs These measures are driving a gradual recovery in profitability The underlying pattern of PV industry competition is gradually shifting from capacity and shipment scale to effective supply, product value, and earnings quality The mandatory new national standard on energy efficiency for modules and inverters released in July will take effect in January 2027. The new standard set Level 3 energy efficiency as a minimum threshold for market access. Products that fail to meet these minimum thresholds will not be permitted for production or sale. Placing high-efficiency products in a stronger position for large-scale renewable energy project tenders Meanwhile, the implementation of market-based pricing for renewable power is pushing customers to increasingly focus on energy yield, reliability, and the lifetime value of modules. These changes are beneficiary to industry leaders with advanced manufacturing capacity, technological expertise, global delivery, and long-term service capabilities, which will accelerate the phase-out of inefficient production capacity. By the end of 2026, we expect to have more than 40 gigawatts of TOPCON 3.0 production capacity. Based on the new standard thresholds, these products are expected to meet level 1 energy efficiency requirements and strengthen or analyze production capacity for high-efficiency products to lead the industry. We continue to advance our product portfolio and build a solid base for next-generation technologies based on our TOPCON technology roadmap. In June, we unveiled our newest next-generation Topcon TigerNEW 5.0 modules. By optimizing multiple core technologies, the TigerNEW 5.0 achieved mass-produced efficiency of 25.91% and power output of over 700W, setting a new benchmark for Topcon product performance once again. ESS shipments in the first half of the year were 3.1 GWh. increased significantly year-over-year. Benefiting from our presence in high-value market, gross margin improved year-over-year in the first half of 2026. Due to uncertainties in timing of project delivery and other factors, recognized revenue remains in ramp-up stage. Approximately 1.5 GWh were recognized as revenue in first half, including more than 1 GWh in the second quarter. As project data rates increase, alongside ongoing enhancement of our in-house PCS, EMS, and other capabilities, we will continue to boost efficiency of both revenue recognition and profit realization, driving high-quality growth for our ESS business. Now, I will move on to our guidance for the third quarter and full year of 2026. We expect our annual integrated production capacity to reach approximately 100GW by year-end 2026, including approximately 14GW from overseas facilities. Considering demand dynamics in certain markets, we will place greater emphasizes on balancing shipment volume, profitability, cash flow, and order quality going forward, and adjusting guidance for full-year 2026 module shipments to between 60GW and 70GW. and high efficiency products accounting for over 60%. We expect module shipments to between 15 gigawatts and 17 gigawatts in third quarter of 2026. For full year 2026, we expect our energy storage system shipments to more than double year over year. As we continue to strengthen the competitiveness of our core solar and energy storage businesses, we are also building an investment platform through disciplined capital allocation and professional investment management that will act as a complementary driver for long-term value creation. Over the past several years, leveraging our deep industry expertise and long-term perspective on technological trends, we have made disciplined and selective investments directly or through fund platforms, focusing on strategic synergies, technological innovation and long-term value creation. Our earlier investment primary focused on the solar and energy storage value chain, In recent years, as AI drives demand for computing power and electricity demand, we have selectively expanded our investment scope to the AI ecosystem and other frontier technologies. To date, we have invested in more than 40 companies in total. As of June 30, 2026, we have invested an aggregate of approximately RMB 1.86 billion in cash. The original cash quotes The cash cost of the investment remaining in our portfolio is approximately RMB 1.5 billion, with a fair value of approximately RMB 1.99 billion as of the same date. Our investment portfolio has generated cumulative value appreciation of approximately RMB 880 million, comprising of approximately RMB 410 million in realized gain from exit and approximately RMB 470 million in unrealized fair value from remaining investments in the portfolio. During the first half of 2026, our portfolio generated gains of approximately RMB 490 million, comprising approximately RMB 110 million in realized gain and approximately RMB 380 million in unrealized fair value gains. In the first half of 2026, We divested a substantial portion of our equity interest in Laplace Renewable Energy Technology Co Ltd, receiving over RMB 300 million in cash proceeds. Since our initial investment in Laplace, the cumulative realized gain on this disposal exceeded RMB 250 million. This gain was recognized over multiple periods through fair value adjustments following its IPO in late 2024. with over RMB 100 million recorded in changing fair value of long-term investment upon settlement in the first half of 2026. In addition, Hangzhou Gold Electronic Equipment Co Ltd successfully completed its listing on Chinex Markets of Shenzhen Stock Exchange during the second quarter, creating an additional pathway for future value realization. Looking ahead, we will continue to maintain a disciplined approach to capital allocation, Supporting the long-term development of our core solar and energy storage business will remain our top priority. At the same time, we will continue to evaluate our existing strategic investments based on the operating performance, strategic synergies, and the long-term value creation potential of each portfolio company while remaining disciplined and selective in pursuing new opportunities. Through strengthening our core businesses, realizing portfolio value, and improving capital utilization efficiency, We remain committed to creating sustainable long-term value for shareholders. This concludes my remarks. I will now turn the call over to Jenna.