Hello, ladies and gentlemen, and thank you for standing by for JNCO Holdings' third 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, Ms. Stella Wang, JNCO Holdings' Investor Relations Manager. Please proceed, Stella.

Thank you, Operator. Hello, everyone, and thank you for joining us today for Jinko Holdings' 3rd Quarter 2026 Earnings Conference Call. The company's results were released earlier today and are available on the company's IR website at ir.jinkosolar.com, as well as on In-Virus Services. We have also provided a supplemental presentation for today's earnings call, which can also be found on the IR website. Joining us today are Mr. Jimmy Du, CEO of Jinko Holdings Ltd, Mr. Craig Jiang, Acting CFO of Jinko Holdings Ltd, Mr. Charlie Cao, CEO of Jinko Solar Co Ltd, and Mr. Gina Miao, CMO of Jinko Solar Co Ltd. Mr. Du will discuss the growth, business operations, company highlights, and key product developments, followed by Mr. Jiang, who will go through the financials. Management will be all available to answer your questions during the Q&A session. Please note that today's discussion will contain forward-looking statements made under the State Harbor provisions of the U.S. 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 Jinko Holdings' public filing with the Securities and Exchange Commission. Jinko Holdings does not assume any obligation to update any forward-looking statements, except as required under the applicable law. It's now my pleasure to turn the call over to Mr. Dimi Du, CEO of Jinko Holdings Limited. Please go ahead, Dimi.

Hello everyone, this is Timidu and thank you for joining Jinko Holdings third quarter 2026 earnings call. Last Friday we announced the completion of our name change to Jinko Holdings Ltd and today is the first time we are speaking with you under the new name. For us, the change is not simply the adoption of a new name, it marks a new start point in our development. Our recent Jinko 2026 Global Tech Day underscored how quickly energy and technology are converging. From PV to energy storage and from energy supply to ever-growing demand for computing power in the AI era, technological innovation continues to expand the boundaries of the energy industry. We believe that truly valuable innovation lies not only in pushing the limits of technology but in bringing that technology into application embedding across the industry and creating long-term value. Going forward, we will continue to focus on our core solar and energy storage business while taking a more open approach to opportunities in AI, advanced materials, commercial space, and other frontier technologies. We aim to connect our industry expertise with external sources of innovation to support technologies and companies with long-term potential. through disciplined capital allocation and advance both industrial development and long-term shareholder value through ongoing portfolio management. Let me begin by reviewing the operational performance of our solar and energy storage business and then update you on our strategic investments. In the third quarter, we continue to deploy an operating strategy that balances sales volume and profitability, advancing the integration and upgrade of our high-efficiency products and the development of our energy storage business. Benefiting from higher shipments of high efficiency products, the continued cost optimization of TOPCON3 and improved probability in our energy storage businesses. Our operating performance improved significantly both year-over-year and sequentially. Gross margin was 12.3% in third quarter of approximately 8% points sequentially and 5% points year-over-year. Net loss and adjusted net loss both narrow significantly on both year-over-year and sequentially basis to US$25.4 million and US$1.2 million respectively. Looking ahead, we will build on three core pillars. namely technical innovation, globalization, and AI transformation to drive integrated solar power storage development and to convert our technology, manufacturing capability, and global network into a stronger and systematic solution. Looking at the details, module shipments were 15 gigawatts in third quarter. With a strong brand and product capabilities, we continue to expand our footprint in high-value overseas market In the third quarter, overseas markets were the primary destination for shipments, accounting for around 70% of the total. We continued to optimize our program mix with the shipments of Tiger Neo 3 modules exceeding 5 GW during the quarter, and commanding a premium for approximately US$0.01 per W over conventional modules. We also made progress with the capacity ramp-up with Tiger Neo 3 with production costs continuously improving. We are well aware that technological innovation with real long-term competitiveness shall not pursue an efficiency breakthrough alone. It must also meet customer needs across different application scenarios and deliver tangible economic benefits through scaled mass production. Recently, we launched the next-generation TigerNEW 5 all-black premium residue module based on the TAC tech technology platform, featuring power output of up to 510 watts and module efficiency of up to 25.52%. Leveraging our core tech technology, we will focus on our global premium distributed market segment, particularly residential rooftop applications. We are planning to gradually ramp up production and shipments over the next two years. in line with the market demand and industry conditions. At the same time, we will continue to strengthen our network through relationships with installers and end customers and improve both product competitiveness and local service capability so that our technological advantages translates more effectively into a commercial value. We are pleased to see our energy storage business deliver growth in both sales volume and profit in third quarter. We recognize approximately 1.75 GWh of energy storage shipments as revenue, matching the total recognized for the whole of last year with the business also generating positive quarterly operating profits for the first time. We are actively advancing the application of our proprietary PCS products and continuing to explore opportunities in emerging scenarios such as data centers. Going forward, we will further optimize our geographic and order book mix and deepen the synergies between solar and storage across customer resources, sales channels, and technical services in order to deliver more sustainable growth and profit contribution. The TV industry is at a critical stage of supply and demand adjustment. As the relevant national authorities continue to promote the orderly and well-regulated development of the industry through stricter standards and higher technical and energy efficiency requirements, we expect these measures to support the gradual phase-out of less efficient capacity and competition to focus more on technological innovation, product quality, and customer value. We will maintain our operating strategy of balancing sales volume and profitability continue to optimize our product and order book and exercise strict control over capital expenditure in order to make the improvement in operating performance more sustainable we expect module shipments of between 16 gigawatts to 18 gigawatts in fourth quarter for full year 2026 We expect energy storage system shipments of approximately 10GWh By the end of 2026, we expect to have approximately 40GW of high efficiency capacity that meet level 1 national energy efficiency requirements. Alongside the progress in our core solar and energy storage business, we continue to invest in semiconductors, AI, Energy Storage and other frontier technologies in third quarter, with total and follow-on investments of approximately RMB 330 million, of which approximately RMB 254 million came from the company's own capital. This includes KiwiMore, a product of full-stack AI networking products and a solution specializing in advanced chiplets and chip interconnection technologies. and Textor, a company focused on the development and application of supercapacitor technologies. We also saw continued progress across our strategic investment portfolio during the quarter. SiliconFlow completed the second tranche of its Series B Plus financing round and its Series C financing round in September 2026. Stella Wang launched its StepX terminal brand and related AI terminal products in July for the extended application of its large language models in end-user devices. More recently, Adaspace Technology, another of our portfolio companies, passed a listing hearing of Hong Kong Stock Exchange. In terms of the portfolio management and value realisation, at the end of the third quarter of 2026, The fair value of our strategic investment portfolio was approximately RMB 2.05 billion. During the first nine months of 2026, our portfolio generated gains of approximately RMB 327 million, compromising approximately RMB 82 million in realized gains and approximately RMB 244 million in unrealized fair value gains. Over the same period, portfolio exit generated approximately RMB 386 million in cash proceeds. Notably, having divested a substantial proportion of our equity interest in Laplace in the first half, we completed the exit from our remaining equity interest in third quarter, generating additional cash proceeds of approximately RMB 38.7 million. Our initial investment in Laplace was approximately RMB 65 million, and the investment generated cumulative gains of approximately RMB 357 million. Looking ahead, we will remain selective in pursuing investment opportunities, balancing new investments against excess based on the operating performance and value realization path of each portfolio company, and improving capital utilization efficiency. By improving the performance of our core solar and energy storage business and progressively realizing the value of our portfolio, we remain committed to creating sustainable long-term value for our shareholders. This concludes my remarks and I will turn the call over to Craig.

Thank you, Jimmy. With our focus on high-efficiency products and high-value markets, the continued growth in revenue contribution from our energy storage business and the unremitting cost control initiatives, we achieved a steady improvement in our financial performance. Gross margin was 12.3% in the third quarter, up 8.1% sequentially and 5% year-over-year. Loss from operations and net loss narrowed significantly both sequentially and year-over-year. Operating cash flow was approximately $91 million for the first nine months of year 26 as we continued to optimize our cash flow management. We will continue to balance sales volume and profitability and to control cash flow. And we expect full-year operating cash flow to improve compared to last year. Now let me walk you through our third quarter financial results in more detail. Please note that all year-over-year and sequential percentage changes in monetary figures are calculated based on an R&B basis, and the corresponding US dollar amounts are provided for reference only. Total revenue was $2.03 billion, up 10.2% sequentially and down 15.7% year-over-year. The sequential increase was mainly attributable to growth in revenue generated from our energy storage system and an increase in the average selling price of solar modules, while the year-over-year decrease was primarily due to a decrease in the shipment volume of solar modules. Growth margin was 12.3%, compared with 4.2% in the second quarter of year 26, and 7.3% in the third quarter of year 25. The sequential and year-over-year increase were mainly driven by continued cost optimization in our high-efficiency production lines and an increased share of high-efficiency product shipments and a greater contribution from higher margin energy storage system revenue. Total operating expenses were $261.2 million down 10.2% sequentially and 32.3% year-over-year. The sequential decrease was primarily due to lower expected credit loss in the third quarter of year 26, while the year-over-year decline was mainly due to a reduction in the impairment of undone assets and lower expected credit losses. Operating expenses account for 12.9% of total revenue compared to 50.8% in the second quarter of year 26 and 16% in the second quarter of year 25. The recovery in gross margin and the decrease in operating expenses together narrowed our losses from operations to $11.9 million in the third quarter. Operating loss margin was 0.6% compared with 11.6% in the second quarter of year 26 and 8.7% in the third quarter of year 25. Next loss attributable to Jinko Holdings Ltd ordinary shareholders was $25.4 million in the third quarter of year 26 compared with $103 million in the second quarter of year 26. and $105 million in the third quarter of year 25, improving both year-over-year and sequentially. Excluding the impact of the change in fair value of the long-term investments gained from disposal of subsidiaries, impairments of long-life assets and share-based compensation expenses, adjusted net loss attributable to Jing Co Holdings Ltd. Ordinary shareholders was $1.2 million in the third quarter of year 26, compared with $134 million in the second quarter of year 26 and $57.5 million in the third quarter of year 25, improving both year-over-year and sequentially. Now moving to the balance sheet. At the end of the third quarter, our cash, cash equivalents, and restricted cash was $2.32 billion in total, compared with $2.5 billion at the end of the second quarter of year 26. Accounts receivable turnover days were 103 days, compared with 113 days in the second quarter of year 26. Inventory turnover days were 133 days, compared to 125 days in the second quarter of year 26. At the end of the third quarter, total interest-bearing debt was $6.73 billion compared to $6.62 billion at the end of the second quarter of year 26. Net debt was $4.41 billion compared to $4.12 billion at the end of the second quarter of year 26. This concludes our prepared remarks. We are now happy to take your questions. Operator, please proceed.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Philip Shen with Roth Capital Partners.

Hey guys, this is Oscar Chin on for Philip Chen. The first question is on margin for your core business. Just want to know, do you see further opportunities to improve your margin by optimizing your product and geographic mix in 2027? Even if that means, even if that could mean low shipment volume versus 26, and then what is your outlook for module ASP in Q4, 26 and 2027? And then I have follow-up questions, thank you.

This is Charlie Beacon talking. Looking to next year, 2027, we did, I think, have the opportunity to optimize the product mix, you know, Shenhua Li, Shenhua Li, Shenhua Li, Shenhua Li, Shenhua Li We believe next year we are in a good product mix and capacity mix. The next key task will be to optimize the mix of the shipment to different customers, regions, and segments. Talking about ASP, we believe it's already We strongly believe the current profit margin and the price is not sustainable and we need to have recovery next year.

Okay, and then second question, would you quantify any impacts of freight or elevated energy costs on your Q-frequency margins? And then do you think those impacts could proceed into 2027?

It did have because, you know, shipment, particularly I think the most important, you know, significant impact is the shipment logistic cost. The Middle East conflict and a very high price for the oil and the gas. But we build base case. It could be the high energy price will be lost for a few quarters, but second half year or next year we believe it's going to be, you know, get back to the normal status.

Okay, that's helpful. And then last question for me. I'm interested in your strategic investment business and then now with the strategic investment becoming an additional value driver like how significant do you expect this platform to become relative to your solar core solar business over the next few years in terms of maybe capital deployment or earnings contribution and then how is the management team allocating the time and resources between the core and investment business

Before talking to details of strategic investment, I'd like to highlight two parts. The Jinko Holding is a holding company. One of the assets is 55% roughly equity, so China-based, Asia, Jinko Solar, whose business is Jinko Solar. integrated solar and plus storage business. And that is one of the key assets. But from the JinkoSolar Holding Company perspective, I believe for long term, it's just kind of the controlling shareholders. And it's not kind of have the plan to make the additional allocation capital to the Jinco Solar Manufacturing Asia Business. On top of that, because they have sizable cash resources, in the last few years, they started to build up very strong investment teams. Initially, it's kind of focused on key equipment and the material and kind of startup companies for the solar storage business and gradually they expand the investment group scope and to the AI, you know, kind of large model companies and a lot of chip companies industries. So it's back to the question, they're not going to allocate additional capital to the manufacturing business and the focus will be the kind of strategic investment and including traditional solar storage related and to more board, you know, high tech sectors.

Okay, thank you. I will pass it on.

Once again, if you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. Your next question comes from Rajiv Chandri with Sensara Capital.

Good morning. First of all, congratulations on a very strong performance across both storage and the basic module business. So that's the first thing. The question I want to ask first is about storage, actually. You are suggesting that the shipments in the fourth quarter will be around five and a half gigawatts hours to get you to the 10 gigawatt hours for the year. But in terms of recognizing revenues, you have a lot of revenues from last year that probably still have not been recognized. And your shipments this year have also been Ahead of your revenue recognition. So when you combine all that with a very strong shipment quarter in the fourth quarter alone, what sort of revenue recognition should we be expecting? Is it going to be in the six or seven or eight gigawatt hours of revenue recognition, which would be three to four times what you recognized in the third quarter? Can you give us a sense of that?

Okay. For the big picture, the storage business is kind of be like the solution, you know, turnkey business. So it's going to go through a lot of procedures, you know, shipment acceptance and commissioning, you know, typically different regions it takes about six months to 12 months to for failed obligations and recognized revenue on the financial statements. So it's a little bit of late recognitions nature. And so back to your questions, and last year, 2035, we have five gigawatt hours shimments and one gigawatt hours revenue recognitions. So the gap delayed last year from last year's 4 gigawatt hours. For this year, the shipment is 10 gigawatts, but we roughly estimate the revenue recognition could be 6 to 7 gigawatts. So if you look at it two years together, we have 5 plus 10, 15 gigawatt hours shipments in two years. and revenue recognition is roughly seven to eight. So there's a roughly seven gigawatt hours will be delayed to next year for commissioning and for revenue recognition.

Great, thank you. That also means that you will recognize about three to four gigawatt hours in the fourth quarter is what you're suggesting.

I think in the first nine quarters, for the first nine months, we have roughly, I think, three giga hours. A little bit over three giga hours for three quarters. But the fourth quarter should roughly be, I think, three. One quarter is roughly equal to the last three quarters.

Okay, next question I have is about the geographic distribution of module sales. Could you tell us about the sales that you had? I know you said 70% outside of China, but how much of it was in the U.S.?

For the third quarter, roughly, I think, let me do the calculation roughly, It's still one gigawatt. One gigawatt minus a quarter in the third quarter.

So third quarter was one gigawatt. And what do you expect the fourth quarter to be in the U.S.?

I think it's quite similar.

Close to one gigawatt.

Okay. And also, can you comment on your shipments into India? What kind of shipments did you do in India in Q3, and what do you expect in Q4? Okay.

I think I have a number, maybe, you know, a number, but, you know, China,

So our treatment, the moderate treatment to injuries is not so significant. But we look at the big region, that is the Asia Pacific region, that is our big market, but injuries were small, not so big.

I see. Okay. Moving on to the... Previously, you used to break out the shipments of wafers and cells. You have not broken them out in the last two quarters. Is that because they are close to zero, or you have changed your reporting policy?

I think we didn't change the reporting policies. And... But the majority part, 90%, maybe 95% is module revenue. So I think we did emphasize the way for us to sell revenue because typically it's kind of low inflation product.

Right.

Okay. And final question is on the gross margin. There was a nice improvement in gross margin in Q3 and I suspect that was even though the module margins were up very nicely, the gross margin in storage is still higher than the gross margin in modules right now?

Yes. The gross margin The storage bin is roughly 15-20%, which is 10% of the module's gross margin. But the revenue contribution is not significant, roughly 5-6%. So I think that from a margin perspective, combined together, from the storage bin, it's maybe 1-2% impact.

I see. And my final question is on the gross margin expectation for the fourth quarter. You said that Tiger Neo 3.0 modules exceeded 5 gigawatts in Q3. What kind of shipment number are you thinking for Q4?

You mean gross margin or shipments?

Well, shipments first, and then related to that, I guess, would be the impact on the gross margin, right?

Yeah, yeah, we did have more the TigerNear3 product shipment, and Q3 roughly 30%, and Q4 roughly 40%, so gradually increased 10%. That way we have impact on the gross margin as well. But the Q4, the growth margin, we did see some pressure, particularly we expect relatively more shipment to China, as well as we have some contracts, long-term contracts we signed in the beginning of this year. We may need to deliver by the end of this year. So back to your question, but it's kind of one and others. We expect relatively higher mixed percentage from high margin product. We did have the close margin, but from the country shipment, with more shipment, China typically Q4 is the peak season for China. It has some kind of

So when you net it all out and also you'll have more shipments of storage, we should still expect gross margin to improve sequentially?

We did hope, we did hope, but anyway we think Q4 we did face some pressure on the gross margin overall, particularly more shipments to China.

I see. So the higher shipments to China will bring the gross margin overall down from the third quarter level? Or it will not allow it to expand?

There's a lot of factors, particularly if you look at the commodity price, it looks like some mature cost is up, some is down. Anyway, we think Q4, we tend to be giving more shipment to China. We face some headwinds for the gross margin.

I see. My final question is on shipping costs. Can you tell us what's been happening with shipping costs in Q3 and what we should expect in Q4?

It's stable, but it's on the high level, particularly for the Sherman to the Middle East regions. It has kind of the ripple effect because the oil price is high. Now it's kind of $100, right? And it's going to have impact on the overall Sherman to different regions, but the most impact

Thank you.

Once again, if you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. We will just pause for a moment to allow questioners to enter the queue.

Once again, that's star 1 on your telephone and wait for your name to be announced.

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