JinkoSolar Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
October 30, 2023

There are 9 speakers on the call.

Operator

Thank you for standing by, and welcome to the Third Quarter 2023 Genco Solar Holding Company Limited Earnings Please note this conference is being recorded. I would now like to hand the conference over to Stella Wong of Investor Relations. Please go ahead.

Speaker 1

Thank you, operator. Thank you, everyone, for joining us today for JinkoSolar's 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. Li Xian Du, Chairman of the Board of Directors and CEO of JinkoSolar Holding Company Limited Mr. Jenna Miao, Chief Marketing Officer of JinkoSolar Company Limited Mr.

Speaker 1

Pan Li, Chief Financial Officer of JinkoSolar Holding Company Limited and Mr. Charlie Cao, Chief Financial Officer of JinkoSolar Company Limited. Mr. Li will discuss the JinkoSolar's business operations and the company highlights, followed by Mr. Miao, who will talk about the sales and the marketing, and then Mr.

Speaker 1

Pan Li, who will go through the financials. They will all be available to answer your questions during the Q and A session that follows. Please note that today's discussion will contain forward looking statements made under the Safe Harbor provisions of the U. S. Private Securities Litigation Reform Act of 1995.

Speaker 1

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 as included in JinkoSolar's public filings with the Securities and Exchange Commission. JinkoSolar does not assume any obligation to update and a forward looking statement except as required under applicable law. It's now my pleasure to introduce Mr.

Speaker 1

Li Xian, the Chairman and CEO of JinkoSolar Holdings. Mr. Li will speak in Mandarin, and I will translate his comments into English. Please go ahead, Mr. Li.

Speaker 1

Conference. We are pleased that we were able to overcome the challenges we faced due to market volatility and deliver a strong Q3. We did so by leveraging our advantages in N type top com technology, extensive global operation network and advanced integrated capacity structures and our model shipments approximately 21.4 gigawatts, an increase of 107.9% year over year. Of total module shipments and module shipments to the U. S.

Speaker 1

Market recorded sequential growth in the 3rd quarter, all contributing to improved profitability. Year over year, our net income increased by 140.7 percent to US181.4 million dollars and adjusted net income increased by 215.1 percent to US184.6 million dollars Diluted earnings per ordinary share increased by 188 0.7 percent to US0.63 dollars and gross margin increased from 15.7 percent to 19.3%. Since the Q3, price declines in the supply chain have stimulated end market demand. For the 1st 9 months, Meanwhile, intensified competition brought by changes in supply and demand, accelerated technical iterations, High interest rates in some regions and geopolitical tensions caused some volatility in the global PV market, which tested all industry players. We believe that we, as the industry leader, will become even stronger as intensifies.

Speaker 1

At the end of the Q3, we became the 1st module manufacturer in the world to have delivered a total of 100 and 90 gigawatts solar modules covering over 190 gig countries and regions. Our capabilities in globalized sales, operations and management added by continuous R and D accumulation and innovation help us to build an all round competition barrier. We are confident in our ability to navigate through the volatility cycle, achieved healthy and sustainable profitability and increased our shareholders' value. By the end of the Q3, the mass produced efficiency of N type cell reached 25.6 percent and the N type module power output was 25 to 30 wattsp higher than similar P type modules. Demand for these products continued to increase globally As to the LCOE is lower, N type modules still returned a premium over similar P type modules and the premium continued to exceed the market's average.

Speaker 1

At the end of the Q3, we already had over 55 gigawatts of N type cell production capacity. And by the end of this year, N type cell production capacity is expected to reach about 70 gigawatts, a competitive capacity structure leading the industry. Recently, our integrated projects in Shanxi, China started construction Phase 1 and Phase 2 for a total of 28 gigawatts wafer cell and module integrated capacity are expected to start production in the first half of twenty twenty four. In addition, we are optimistic about the growth potential brought by Recently, our high efficiency 182n type top comp sales set a new record with maximum Thanks to our leadership in driving N type top count technology, N type top count product is expected to For now and in the future 3 to 5 years, we are confident to be ahead of the industry dynamically by about half a year in terms of power output, cost and product competitiveness through continuous technology iteration and leveraging our As a responsible global company, we continue to make progress in sustainable development. This excellent performance in corporate social responsibility, we received a high rating from Acrobatis, outperforming the mainstream PV companies.

Speaker 1

We are dedicated to providing clean, high efficient and reliable solar products and Energy Storage Solutions to more and more countries and regions making our contribution to global energy transition. Before turning over to Gener, I would like to go over our guidance for the 4th quarter and full year of 2023. By the end of 2023, they expect mass produced N type cell efficiency to reach 25.8 We are confident to exceed the full year module shipments guidance of 70 to 75 gigawatts with Enhybrid module accounting for approximately 60% of total module shipments. We expect our newer production capacity for mono wafers, Solar sales and solar modules to reach 85, 90 and 110 gigawatts respectively by the end of this year. For the Q4 of 2023.

Speaker 1

We are confident we will continue to lead the industry with our advanced technology and premium high efficient Products.

Speaker 2

Thank you, Ms. Li. Total solar shipments were 22.6 gigawatts in the 3rd quarter, with module shipments accounting for 95%. As we continue to improve product quality and further develop our client service network, Our brand influence continues to grow. By end of the Q3, our all time accumulative global solar module shipments exceeded 190 gigawatts, covering over 190 countries and regions.

Speaker 2

In response to market volatility, We flexible adjusted the geographic mix of our shipments during the quarter. The domestic market became the dominant area for our shipments according for around 40%. Shipments to emerging market remained stable sequentially, while Asia Pacific and North America increased compared to the last quarter. We are particularly pleased The shipments of high efficiency Tiger NIO modules exceeded 60% of total module shipments as Tiger NIO accelerated its market penetration, Thanks to higher efficiency and the high added value to customers, Tiger Neo products still carry a substantial premium compared to similar P type products and continue to outperform the industry average. In terms of prices, lower upper stream costs have been reflected in module prices, which decreased compared to the 2nd quarter.

Speaker 2

As prices declined, some clients have slowed the pace of new orders and some of the existing orders were delayed. However, lower module prices leading to greater economic benefits also drove plenty of demand, which fills the gap because caused by delayed orders. We adjusted prices and market strategy timeline to cope with market shifts and We are committed to maximizing the value of products and the services we provided to our clients. Recently, we signed 3.6 gigawatt module supply agreement with Entirentag Renew with Aqua Power Tiger Nio delivers at least 3% of power generation gain to clients, particularly as the climate Tower Generation and the Project IRR. As industry trend prices declined and started to stabilize, Large scale utility project accelerated the connection to the grid and we expect a new installation record in China this year.

Speaker 2

Session. With high demand certainty and the help of our high efficient product and services, We are confident that we will expand our market share. With that, I will turn the call over to Pan.

Speaker 3

Thank you, Gener. The significant growth in our module shipments, decrease in raw material cost as well as our continuous cost control helped our key financial metrics, including total revenue,

Speaker 2

dividend of $1.5

Speaker 3

per ADS, which is expected to be paid on or around December 6 this year. With the continuous expansion of our global industrial chain, meeting our commitment to shareholders. Let me go into more details now. Total revenue was $4,360,000,000 flat sequentially and up 16 3 percentage year over year. Gross margin was 19.3 percentage compared with 15.6 percentage in the 2nd quarter this year and 15.7 percentage in the Q3 last year.

Speaker 3

The sequential and year over year increases were mainly due to the decrease in the cost of raw materials. Total operating expenses are accounted for 9.9 percentage of total revenues compared with 10.6 percentage in the 2nd quarter this year and 15.4 percentage in the Q3 last year, improving year over year. Operating margin was 9.4 percentage compared with 5 percentage in the 2nd quarter this year and 0 0.3 percentage in the Q3 last year, improving sequentially and year over year. Net income attributable to JinkoSolar Holdings ordinary shareholders was 100 and improving year over year. Excluding the impact of a change in fair value of the notes and long term investments and share based compensation expenses, the adjusted net income was 184,600,000 At the end of the 3rd quarter, our cash and cash equivalents were well off CNY 93,000,000 compared with CNY2.35 billion in the 2nd quarter.

Speaker 3

AR turnover days were 87 days compared with 79 days in the Q2 of 2023. Even 3 turnover At the end of the 3rd quarter, total debt was $4,230,000,000 compared to 4.7 $3,000,000,000 in the Q2 this year. Net debt was $2,290,000,000 compared to 2 point

Operator

to ask your question. Our first question today will come from Philip Shen of ROTH MKM. Please go ahead.

Speaker 4

Hi, everyone. Thanks for taking my questions. You guys had a pretty nice margin in Q3 Despite the collapse in module prices, it seems like you've been able to match your cost structure with your module pricing. So I was wondering, if you could give us your sense of how you expect module pricing to Similar margins in Q4 and Q1 versus Q3? Or do you think there could be potential for even margin expansion in Q4 and Q1?

Speaker 4

Thanks.

Speaker 5

Hey, Sven. This is Charlie. And we did very good in the 1st 9 months, including the 3rd quarter. Thanks for our strong order visibility. And we almost finished And it's we are expecting the ASP in Q4 is downward trend This is the Q3.

Speaker 5

And because we have more exposures to Chinese market in the 4th quarter, We expect gross margin is possibly slightly down quarter over quarter. And next year, we believe the module price will be relatively stabilized. And regarding the it's very important to us to next year, We look up as quickly as possible the sales orders, and we are in a good position. I think We have the largest end type in top capacities, and we have The most largest integrated capacity is out of China for the U. S.

Speaker 5

Market, and we expect to We are aiming to over 85% shipments of Topcar next year. So we We are confident we can deliver relatively better performance compared to our peers next year.

Speaker 4

Got it. Okay. So, Q4 margin could be down slightly because of the China mix. And in Q1, perhaps you could have some expansion beyond so growth or expansion of the margin in Q1 and Q2?

Speaker 5

It's too early to say, but this year, our performance in the U. S. Market is not so good Because the module was delayed, determined. And we expect next year, everything is getting That's significant, starting from next year.

Speaker 4

Great. Okay. Thank you. You mentioned, Charlie, just now the U. S.

Speaker 4

Shipments. And so I was wondering, in Q3, was there large benefits in margin And then also next year, I think in the past, you were talking about 10 gigawatts of shipments for the U. S. Market in 2024. But in your PowerPoint today, you highlighted 12 plus gigawatts by year end 23 of integrated capacity.

Speaker 4

So do you think 2024 could actually be closer to 12 gigawatts? And we can leave it there. Thank you.

Speaker 5

Next year, yes, our target is Over 10 gigawatt shipments in U. S. Market, and that's our biggest target. And The contribution earnings contribution from U. S.

Speaker 5

Market in Q3 is not good Because we shipped around 1.3, 1.4 gigawatts, but most of the modules was produced 6 to 9 months is a circle. And it's a relatively high cost and including the storage cost. So back to your question, it's improving quarter by quarter. I believe from the beginning of next year And the earning power from the U. S.

Speaker 5

Will be quite significant for JinkoS.

Speaker 4

Got it. So you were able to generate 19% margin in Q3 despite The highest storage cost and the high

Speaker 5

All right,

Speaker 2

all right, yes.

Speaker 5

Yes.

Speaker 4

That's very interesting. One last question and I'll pass it on. Can you compare the pre impairment margins in Q3 versus Q4 actuals? In other words, what is the like to like margin trajectory? Right.

Speaker 4

The margin

Speaker 5

is I know, I know. And we did have some impairment, inventory impairment in the Q2 by the end of the June. But we don't expect any additional Significant impairment for both Q3 and the Q4, we don't expect. And Everything is ordered, and we are in good position. And we believe our price is pretty nice If you compare our ASP with the small market price, and we don't expect the inventory impairment.

Operator

Conference. Our next question today is from Brian Lee of Goldman Sachs. Please go ahead.

Speaker 6

Hi, thanks for taking the questions. This is Grace on for Brian. I guess My first question, just a follow-up to the ASP questions earlier. Just wondering if you can talk about the ASP trends by Maybe end markets and by different geography. I'm just asking because we have heard that some of the markets like especially the DG market have seen really high channel inventory.

Speaker 6

So can you provide a bit more color on the ASP trends? Thank you. And I have a follow-up.

Speaker 2

Yes, sure. Normally we see a DG market is Relatively ASP higher than utility, that's what people are saying. But at the current stage, we see a Special situation in U. S. Market especially, right.

Speaker 2

So the U. S. Market because of many reasons, the DG market is More pressured than the utility market. That's what we have observed. I think personally, we believe a very important reason is Because of the, let's say, the supply side, right?

Speaker 2

So if the supply side is using a fully treatable, let's say, raw material or they are just Or they are just play the opportunity game on the spot market. So I guess that's one of the reason why we see Just oversupply in the U. S. DG market in such short term. For the rest of the world, we believe DG market is Relatively healthy.

Speaker 2

So we still see a strong DG market. Even for example, in Europe, right now, There are some pressures from the inventory side, but in the long term, we are still a big fan of European market, no matter its DG or utility. So We believe that's the pre remarked speech we have, so it is starting digesting. So it will take some time, but it will be there. That's what we believe.

Speaker 6

Great. Thank you. And then my second question on your shipment guide, your 4Q shipment guide of 23 gigawatts kind of implying a flattish quarter over quarter growth. But I think historically your 4Q is much higher than 3Qs. Is this driven by the orders delayed that you referenced on the prepared remarks?

Speaker 6

Or is there something else? And also, can you quantify how much

Speaker 2

So we are really provide a relative conservative numbers, which is I think is the high end of our annual guidance Which will be around 75 gigawatt. Still, on the order book side, we have more than what we need, But we still have some supply bottleneck. That's one of the reason why we continue to expand our capacity, try to fulfill all this Commitment we are making. So overall, we are fully confident that we can beat our, Let's say guidance if needed. It depends on the supply side and the market trend.

Speaker 2

And Your follow-up question is about if you're talking about next Q1 or next year's order book. Again, for this Next year's total demand side, we are fully confident that the market will go up by another 20%, even 25% compared With 2023. So in the key market, we still believe the high quality High efficiency n type top comp product is still in some of the let's say, somehow shortage. That's why we still have the confidence that we will continue to build up our order book and extend our market share next year.

Operator

Our next question will come from Rajesh Chaudhry of Intrinsic Edge Capital Management. Please go ahead.

Speaker 7

Good morning and congratulations on a very strong quarter in what was A very difficult environment for the industry. I have a few questions. I want to start by asking if there were any Charges, inventory related charges in the gross margin number in the second in the third quarter.

Speaker 3

Hello, Rajesh. The answer is no.

Speaker 7

Okay. And were there any charges in the selling and marketing or general and administrative expenses that were Yes. Was there any one time charges in the SG and A line items?

Speaker 4

We did have

Speaker 5

some roughly, I think, maybe 20,000,000, 25,000,000 Regarding the one of the module contracts a long time ago, so it's one time. I think it's in other operating expenses, not in the G and A expenses, but we did have some

Speaker 7

Okay. And Going back to the gross margin, I'm trying to understand What your cost of polysilicon was for the quarter? And The number I'm coming up with is around $16 on average, dollars 16 per kilo on average

Speaker 5

Rajiv, we don't disclose the number, but you can look at the index and the China Poly roughly, I think, in the range of RMB 60 per kg to RMB 90 per kg. And by the polysilicon, auto China is kind of, I think, 2x

Speaker 7

Yes. Actually, DQ Energy just reported their ASP for the quarter was Actually, dollars 7.60 So that is actually closer to RMB 50 per kg.

Speaker 5

Yes. You're right. You're right. You can't Well, there's a public index, right, for the poly and the entire business. But think about we have the inventory Tomorrow days is roughly 60 to 80 days.

Speaker 5

We have production lead times, right? You need to think about the time difference and to do the calculations, but you can do the calculation based on the trend, but The detail, the numbers, I think we have the supply chain advantage compared to marketplace, But we have different mix and for the U. S. Market versus the market out of U. S, it's The poly price is different.

Speaker 7

So, Tali, is it fair to say that because you have 60 to 80 days of inventory That your poly prices are always lagging the spot market by 60 to 80 days?

Speaker 5

Yes, you can do the estimation

Speaker 7

Okay. My other question is about competition. At the prices where modules are right now, what percentage of The industry players between Tier 2 and Tier 3, do you think are losing money right now? And what percentage of these companies are Cutting back on their production because they are below their the pricing is below their cash costs.

Speaker 5

Yes. We are We have seen this situation in recent single months For different utilization rates for different players in the industries. For the Tier 1 integrated companies Like JinkoS, we have order visibility is very good mix For the N type versus P type. And we have good management of cost. So For some orders with relatively low price, we are able to continue to deliver, I think, the variable margin of gross profit for the Tier 2, Tier 3 players, Even some, let's say, they are not integrated, they are not international companies, they are reducing their utilization rate.

Speaker 5

So

Speaker 4

it's going to be different. It's going to be different in

Speaker 5

the situation and for different companies. I think the Tier 1, Top tier company will take advantage to get more market shares.

Speaker 7

Right, right. Do you see that happening already that the Tier 3 companies are cutting back their production right now?

Speaker 5

Yes. They are doing the utilization for Tier 2, Tier 3.

Speaker 7

So it is reasonable to think that your ASPs are going to be much higher than the spot market prices Because you are selling into the utility market, which is more contract driven and a lot of the spot prices that Tier 3 companies are selling into

Speaker 5

It's fair to say that, but different company have different mix to Different countries and different mix to the DG Research utilities and different product mix. So I think for JinkoSolar Holdings and we are combined together, our small our module price is Relatively higher than the market price. It's not market based, the small price you see you saw from the public

Speaker 7

Speciation in the Q3 and the EBITDA for the Q3?

Speaker 4

I think we have disclosed the EBITDA.

Speaker 5

So including the details breakdown, and you can look at, I think, You can look at the PBT and we have detailed numbers. It's roughly US600 million dollars You can look at the details, including the calculation.

Speaker 7

I see. Okay. Sorry, I have not had a chance to look at that. Can you also talk about what percentage of the market, not JinkoSolar, but the market this year will be Topcon And what the percentage will be next year in terms of how much stock will be produced by the other companies?

Speaker 2

This is

Speaker 5

the 1st year for N Time Top to penetrate the market. And we think that the overall, the market size, it's 20%, 25% this year, but we deliver 60%. And next year, it's possible Nthai will achieve 60%, 70%. But we are able to achieve, I think, over 85%.

Speaker 7

So if the market this year is over 400 Gigawatts. You're saying that Topcon this year is over 100 gigawatts?

Speaker 2

Let me take it as the last follow-up. So roughly, we The total industry output of the PopCom will in this year will be somewhere around 100 to 110 gigawatt. And so across which JinkoS will contribute around 70 gigawattish. So next year, the number definitely will be more than doubled for the Total industries, we're expecting somewhere around 400 gigawatt, but definitely JinkoS will take a Main part of it, but definitely not as big as this year.

Speaker 7

Right. Okay. Okay. Thank you. Finally, one last question on the interest bearing debt.

Speaker 7

You made a point that the interest bearing debt came down in the 3rd quarter. Is that something that we should expect will continue in Q3 Q4 and Q1?

Speaker 3

Yes. We have gradually decreased The debt, because our earnings increased gradually, yes.

Speaker 5

The operating cash flow for Asia Company, We generated, I think, record numbers this year. For the 1st 9 months, it's around RMB 11,000,000,000 Operating cash flows, that's significant improvement. So for the leverage, the total debt we're expecting to continue

Operator

Our next question today will come from Alan Lau of Jefferies. Please go ahead.

Speaker 8

Thank you. So first of all, congratulations to the company in the very impressive results in 3Q and Other peers are actually having declining profits quarter over quarter. So some of the questions on the details As to whether how is the U. S. Shipment situation?

Speaker 8

So How much has the company shipped to the U. S? And what is the view on 4Q shipment to the U. S? And

Speaker 5

Yes. We just talked about the earning contribution from the U. S. For JinkoSolar Holding Company Limited

Speaker 4

Earnings Conference. Yes. We just talked about the earning contribution from the U.

Speaker 5

S. For JinkoS in Q3. And We have smooth shareings, let's say, with CVP starting from July. And the Q4, we delivered roughly 1.3, 1.4 gigawatts. And we're expecting stable No, shipments in Q4 versus Q3.

Speaker 5

And because our normal inventory was detained in the first half year. So we shipped a relatively high volume in Q3. And Q4, we Our production returned to normal standards, and We shift to we shift around similar numbers. But contributions earning contribution will quarter by quarter improve. 3rd quarter contribution is not so big because of the inventory was produced 6 or 9 months ago.

Speaker 5

The cost, storage cost, production cost is relatively higher. But next year, we are expecting With strong earnings from U. S. Shipments.

Speaker 8

Understood. So What you mean is because you have locked in the module price through the contract. And then as the input price is now declining, so you expect U. S. Market will actually

Speaker 2

So if you look at

Speaker 5

the market, the market, the module is high because It was only can be supplied from the capacity out of China. There is No FLPA issues for the industry in the last 12 months. And for JinkoS specifically because our inventory Conference It was produced a long time ago. And we get the process very smooth and starting from July. And the older relatively older inventory, the cost is really up higher.

Speaker 5

So earning gross margin contribution Yes, we're in a good position.

Speaker 8

Understood. I think that is very positive point that A lot of investors have not fully appreciated this. Thanks a lot for the clarity on this. And then my next question is, so Efrain has been talking about the inventory in Europe. So how do we see it?

Speaker 8

And Around how many days or months of inventory we have in Europe?

Speaker 2

Yes. So approximately in Europe market, that's a main DG based market. So in that kind of segment, in my opinion, that's normally around 2 months of the Local inventory plus the logistic time maybe 1 month to 1.5 months should be reasonable. So total together, If you're taking from the manufacturer point of view, on average, it should take us 3 to 3.5 months of the volumes That's a normal or let's say the standard inventories across everyone. If you look into the seller's point or distributor's point, that's normally approximate 2 months of the inventory.

Speaker 8

Understood. So you think the current level is actually at 2 months and it is actually

Speaker 2

No, no, no, no. I'm saying for a DG based distributor generated driven market, That's the market standard, let's say, right? As a current data, especially you mentioned in Europe, I think you know that because of the prices falling, so the end customer is having the hesitation to wait until the market price come into that at lower level. So that slowed down the, let's say, the sales volume at the end customer That's the reason why from the channels or the inventories point of view, the inventory is higher than the, let's say, normal situation. However, in my opinion, the end customers and market end demand is still there, but it's just to create some But I believe it takes maybe 1, 2 more months' time to observe, Digest all the inventories across the whole channel, but the demand is still robust in Europe.

Speaker 8

Thanks in Europe because I think people have been focusing a lot on DC market in Europe. And Actually, inventory is mostly related to DG, but how about utility market in Europe?

Speaker 2

In utility segment, not only in Europe, but across the whole globe, there's barely any inventories, A real inventory, right. So most of the inventory under the utility segment is more build a way And you just goos deliver on-site, but it's not a free inventory you can redirect to sell to others, right? So That's why even on accounting basis, it is defined as inventory, but from a sales point of view, it is not available to So, right. It's just a way to tell you the right timing or it's on the way to the destinations, right. That's why not only Europe, but across the whole world, That's more or less the situation in utility.

Speaker 2

Even if there's some inventory on the accounting basis, but it should not be risky Too much. Yes.

Speaker 8

I see your point. I think I would like to know how is the demand in utility side of things like In U. S. Or in Europe as well? Because will the decline in module prices stimulate more installation in the utility side?

Speaker 8

And how does that compensate with the interest?

Speaker 2

Yes. So Firstly, the demand side, definitely we see there's some more attractions for the end customer to continue to develop more solar projects in The segment because IRR is becoming more and more attractive. The yield is higher and higher. So however, it's a cycle, right? So when you develop a project, it doesn't happen at day 1.

Speaker 2

It takes 12 months, 18 months, sometimes even 24 months, even more to have all this to finish also the whole development cycle, Even early financing to close the financing part to be ready to place orders to the module side. So it takes pretty long cycle. So my simple answer is yes, we see a very promising future, both U. S. And Europe, but it takes some time To have all those pipelines released to become a real order for the manufacturer like JinkoS.

Speaker 2

And secondly, for your question is regarding sorry, I forgot your second question.

Speaker 8

How does that compensate the increase in interest rate? Because in some of the earnings call in U. S, yes, because Banks like JPMorgan and Bank of America are saying that

Speaker 4

the increase

Speaker 2

in interest rate and also But I checked some key clients of us. And most of them, their feedback is positive. Sure. Because for the existing projects, even if their financial is closed, So normally, they secure a fixed interest rate across the whole life cycle of their projects, investment cycles. So for them, it's safe.

Speaker 2

And even with the module price coming down and they have more, let's say, returns for their investments or the interest rate doesn't hurt That part. And for the ongoing projects, because the interest rate is higher and most of the clients can pass The majority of the interest rate higher interest rate cost to the end customers, to the PPA customers who more attractive PPA price than before. But definitely, that won't be 100%, but that's my I share that point from the customer

Speaker 8

Thank you. That's definitely part of the some of the cases may happen. Thank you. So I think, yes, my final question will be in relation to what is your view on What is the progress of your U. S.

Speaker 8

Expansion capacity? And what is your view as of now as to The chance of getting the IRA subsidies because there has been quite a lot of market chapters as to There are some lobbying happening in Washington, etcetera, to target against Chinese players. So would like to know, do you have an update on those?

Speaker 2

No, we don't have a clear we are waiting for this detailed guidance official detailed guidance released as well. So I think it's still not finalized yet. So we are waiting for that as well. But for the U. S.

Speaker 2

Market, we believe that's a very promising market. We're Still holding our bullish positions on that, and we are trying to do whatever we can to serve the U. S. Market. But We will take more actions once all these details got released.

Speaker 8

So your plan will complete by the end of this year, right?

Speaker 2

We will see. We will see. But the previous plan stick to what we have. And if there are if your question is regarding whether we have new plans, we have to wait until the detailed guidance release.

Speaker 8

So your plant in Jacksonville, your 1 gigawatt plant will be completed on time, right?

Operator

Concluded. We thank you for attending today's presentation and you may now disconnect your lines.

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