With the price of photovoltaic modules not significantly improving for the time being, and the hematopoietic capacity continues to be under pressure, JinkoSolar's debt pressure is relatively high in the short term

Dong Lin, researcher at Punctuation Finance and Investment Time.com

In the adjustment of the photovoltaic industry cycle, the competition between leading enterprises has spread from the price war to the technology patent war.

At the beginning of 2025, JinkoSolar Co., Ltd. (hereinafter referred to as JinkoSolar, 688223.SH, JKS. US), a wholly-owned subsidiary, Shangrao Xinyuan Yuedong Technology Development Co., Ltd., filed a lawsuit against LONGi Green Energy Technology Co., Ltd. (hereinafter referred to as LONGi Green Energy, 601012.SH) and Jiangxi Shangwei Technology Co., Ltd., demanding that the infringement of the company's relevant invention patent rights be stopped immediately and that economic losses be compensated. At present, the case has been formally filed and accepted, and the trial will be held on February 13.

It is reported that the lawsuit involves a number of invention patents held by JinkoSolar, especially those closely related to TOPCon cell technology and module technology. As a representative company of TOPCon cell technology, JinkoSolar said that this move is an act to protect its intellectual property rights and defend its legitimate legal rights and interests, and the company will move forward with litigation in accordance with local legal procedures. In response, LONGi Green Energy responded that the company will actively investigate and respond, and if necessary, it will also file counterclaims against TOPCon and other technology products.

The photovoltaic industry is in a reshuffle trough cycle, the involution of enterprise competition is intensifying, and the N-type production capacity represented by TOPCon technology is expanding too fast, resulting in the rapid reduction of the cost advantage of advanced production capacity of leading enterprises. JinkoSolar's patent lawsuit is essentially based on a market strategy to maintain and expand its own advantages by hindering competing peers.

In terms of performance, in the third quarter of 2024, JinkoSolar's net profit attributable to the parent company only recorded 14.87 million yuan, and the weakening profitability led to a year-on-year decrease of 80.88% to 1.215 billion yuan in the company's cumulative net profit attributable to the parent company in the first three quarters. During the same period, the company's net cash flow from operating activities was -365 million yuan, a year-on-year decrease of 103.28%. With PV module prices not significantly improving and hematopoietic capacity continuing to be under pressure, JinkoSolar's debt is under pressure in the short term.

JinkoSolar's asset-liability ratio in recent years

Source: Wind

The technical wrestling behind the patent rights

At present, the photovoltaic cell technology on the market is dominated by three types of technologies: TOPCon, BC and HJT. Among them, JinkoSolar, Trina Solar (688599. SH), JA Solar (002459. SZ) occupies an absolutely dominant position in the TOPCon technology route. and LONGi Green Energy, Aiko (600732. SH) chose to bet on the BC class, and Risen Energy (300118. SZ) and other companies are more optimistic about HJT battery technology.

In terms of the number of patent applications and grants, JinkoSolar is the largest company. According to the company's disclosure, as of the end of June 2024, JinkoSolar has applied for nearly 1,000 patents related to TOPCon technology, and has obtained more than 460 TOPCon technology authorizations.

Researchers from Punctuation Finance and Investment Time have noticed that with the rapid development of the photovoltaic industry and the continuous innovation of technology, the value of patents has become increasingly prominent.

In January 2024, JinkoSolar officially announced that it would collect royalties for TOPCon technology patents. In March, JinkoSolar successively transferred some of its patents to Trina Solar and JA Solar. The company has said, "Encourage the industry to achieve a win-win situation through patent licensing and paid use, but will also resolutely crack down on the practice of 'not saying hello, using it'." ”

It is precisely by virtue of its first-mover advantage in the field of TOPCon that JinkoSolar surpassed LONGi Green Energy with a revenue of 47.251 billion yuan in the first half of 2024 and came to the first place in the industry. As of the end of the third quarter of 2024, JinkoSolar has shipped 73GW of modules, of which N-type module shipments have accounted for more than 85%, ranking first in the industry in terms of total shipments and N-type product shipments.

Looking at LONGi Green Energy, which regards BC technology as a magic weapon through the cycle, its performance is not satisfactory. According to the financial report, in the first three quarters of 2024, LONGi Green Energy achieved operating income of 58.593 billion yuan, a year-on-year decrease of 37.73%; The net profit attributable to the parent company was -6.505 billion yuan, a year-on-year decrease of 156%. Among the 92 companies included in the Wind PV sector, LONGi Green Energy's losses in the first three quarters ranked first among all companies.

Regarding the impact of this patent lawsuit, some analysts in the industry believe that if JinkoSolar wins the lawsuit, its market position in the field of TOPCon technology will be further consolidated, while LONGi Green Energy may face the loss of market share and the pressure of technological transformation. At the same time, other PV companies may therefore be more cautious about patent issues to avoid similar disputes.

In the long run, this lawsuit will help to increase the importance of intellectual property rights in the photovoltaic industry, and prompt enterprises to strengthen technological innovation and patent layout. Under the guidance of national policies, enterprises will pay more attention to the acquisition and use of patented technologies in a legal and compliant manner, so as to promote the high-quality development of the industry.

90 billion debt topped

Looking back on 2024, under the combined effect of fierce market competition and continuous technological progress, the photovoltaic market will reach a new high in terms of production capacity and installed capacity, while the price and output value of the industrial chain will continue to decline, the differentiation of enterprise operations will intensify, and the industry will enter a stage of deep adjustment.

Against this backdrop, JinkoSolar's operating performance is under increasing pressure. In the first three quarters of 2024, the company achieved revenue of 71.77 billion yuan, a year-on-year decrease of 15.66%; The net profit attributable to the parent company was 1.215 billion yuan, a year-on-year decrease of 80.88%.

Researchers from Punctuation Finance and Investment Time Network noted that in the first three quarters of 2024, JinkoSolar received a government subsidy of 1.595 billion yuan, which has exceeded the net profit level in the same period. In addition, JinkoSolar's own inventory amount is too high, which also leads to the company's large provision for price decline, as well as interest expenses from tens of billions of loans, which further squeezes the net profit margin.

In addition, JinkoSolar's cash flow from operating activities has turned from positive to negative against the backdrop of fierce competition brought about by overcapacity, and the company's debt risk has also increased.

According to the financial report, as of September 30, 2024, JinkoSolar's net cash flow from operating activities was -365 million yuan, a year-on-year decrease of 103.28%. The company's total liabilities were 90.719 billion yuan, of which the total interest-bearing liabilities represented by short-term loans, long-term loans and bonds payable were about 31.6 billion yuan, and the monetary funds were 26.67 billion yuan in the same period. As of the end of the third quarter of 2024, JinkoSolar's debt-to-asset ratio was 71.89%, down from 73.17% in the first half of the year, but still higher than the industry average.

On the financing side, JinkoSolar's RMB 9.7 billion fixed increase will be terminated in July 2024, and RMB 2.5 billion of the plan will be used to supplement liquidity. In October of the same year, the company announced again that it planned to issue GDRs (Global Depositary Receipts) overseas and list them on the Frankfurt Stock Exchange, raising a total of no more than RMB 4.5 billion (or equivalent in foreign currency) for the 1GW high-efficiency module project in the United States and the 14GW integrated production base construction project in Shanxi Phase II, and to replenish working capital or repay bank loans.

It is worth mentioning that on January 27, JinkoSolar will usher in the lifting of about 6.897 billion restricted shares, with a market value of 49.034 billion yuan, accounting for about 68.93% of its total share capital, ranking among the top among more than 150 A-share restricted shares.

In the secondary market, as of January 10, 2025, JinkoSolar's share price came out of the "12 consecutive yin" and closed at 6.37 yuan per share (no reinstatement, the same below). Since then, the company's share price has rebounded, with a market value of 66.134 billion yuan as of January 15. You must know that JinkoSolar landed on the Science and Technology Innovation Board in January 2022, and its market value once exceeded 170 billion yuan in August of that year, compared with the company's market value evaporated by more than 100 billion yuan in two years.

Regarding the current stock price, JinkoSolar said in response to investors' questions that the company attaches great importance to and pays attention to changes in stock price and market capitalization, but the stock price in the secondary market is affected by various factors such as the external environment, industry cycles and short-term funds. At the same time, the company will continue to improve its capabilities in technological innovation, globalization, and refined management, continue to enhance its core competitiveness, and hope that the company's intrinsic value can be better reflected.

JinkoSolar's stock price trend since its listing (yuan/share).

Source: Wind