Hello, ladies and gentlemen, and thank you for standing by for JinkoSolar Holding Co., Ltd.'s Fourth Quarter 2025 Earnings Conference Call. Operator instructions were provided. As a reminder, today's conference call is being recorded. I would now like to turn the meeting over to your host today, Ms. Stella Wang, JinkoSolar's Investor Relations. Please proceed, Stella.

Thank you, operator. Thank you, everyone, for joining us today for JinkoSolar's Fourth Quarter 2025 Earnings Conference Call. The company's results were released earlier today and are available on the company's IR website at www.jinkosolar.com as well as on newswire 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. Xiande Li, Chairman and CEO of JinkoSolar Holding Company Limited; Mr. Pan Li, Chief Financial Officer of JinkoSolar Holding Company Limited; and Mr. Charlie Cao, CEO of JinkoSolar Company Limited. Mr. Li will discuss JinkoSolar's business operations and company highlights. Since our Chief Marketing Officer, Mr. Gener Miao, is currently on a business trip, I will deliver the remarks on sales and marketing on his behalf. Following that, Mr. Pan Li will walk 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 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 JinkoSolar's public filings with the Securities and Exchange Commission. JinkoSolar does not assume any obligation to update any forward-looking statements, except as required under applicable law. It's now my pleasure to introduce Mr. Xiande Li, Chairman and CEO of JinkoSolar Holding Company Limited. Mr. Li will speak in Mandarin, and I will translate his comments into English. Please go ahead, Mr. Li.

The global PV industry continued to experience volatility due to structural imbalances and a shifting trade environment in 2025, impacting financials across the industrial chain. In this environment, we maintained disciplined operations and our technological leadership, continuously driving upgrades of our n-type TOPCon technology and iterating our high-efficiency products. For the full year 2025, total module shipments reached 86 gigawatts, ranking first globally for the seventh consecutive year. Shipments were impacted by persistently low module prices, the elimination of obsolete production capacity, and an evolving product mix as high-efficiency products ramped up. We incurred a net loss for the full year. In the fourth quarter, gross 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 solutions provider. Shipments of ESS grew 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. 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 phasing out of outdated capacity and the normalization of market competition, guiding the industry to gradually transition from competing on scale and price to competing on quality and value. Leading companies have actively responded to this directive, which has helped push module prices back to more 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 impact 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 continuing to command a premium. We continue to drive technological breakthroughs and lead the direction of industry innovation. As of the end of 2025, the maximum laboratory efficiency of our a-TOPCon cells reached 27.99%, while conversion efficiency of our a-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 Crystalline to apply AI in R&D for perovskite tandem cells and accelerate commercialization of next-generation technologies. 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 gigawatts, with these products commanding roughly a USD 0.01 premium compared to our conventional products. As our Tiger Neo, the third generation of the Tiger Neo series, sequentially scales up production volume and shipments 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. We continued to enhance our cost control capabilities across market cycles, offsetting the impact from raw material price fluctuations through supply chain optimization and technology 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 the Shanxi Super Factory, our vertically integrated production model continues to improve production efficiency and cost competitiveness, providing a replicable blueprint for our global manufacturing footprint. We view our energy storage business as a strategically vital second growth engine. We continue to strengthen our R&D for core technologies, enhance our system solution capabilities, and improve localized customer service and life cycle support. Leveraging our global PV distribution channels, we are steadily scaling ESS shipments and greater synergies between our solar and storage solutions are increasingly materializing. Currently, our signed and high-potential ESS orders exceed 10 gigawatt-hours in total. As the global energy transition advances and demand for grid flexibility increases, the role of energy storage within renewable energy systems 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. We continue to optimize our global manufacturing and supply chain footprint to enhance our ability to adapt to diverse market policies and customer needs. Our 2-gigawatt n-type module facility in the U.S. maintained 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 key markets to better address customer demand for high-efficiency products and solutions. 2025 marked the final year of the 14th Five-Year Plan, during which cumulative installed capacity of wind and solar power surpassed coal-fired power for the first time, becoming the largest source of electricity generation. At the same time, solar power generation has fully entered a market-driven 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. Recent volatility in global energy markets has highlighted the critical need for energy security and has reinforced the long-term value of renewable energy. Looking forward to the medium to long term, as the construction of new power systems advances and new load demand growth from data centers emerges, application scenarios for solar and storage will continue to broaden, enhancing the value of green power. Industry competition will gradually transition from being cost-driven to a model centered on technological innovation, product competitiveness, and the ability to deliver integrated solar-plus-storage solutions. 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 the industry landscape reshapes. Before turning over to Gener, I would like to go over our guidance for the full year of 2026. We expect new integrated production capacity to reach approximately 100 gigawatts by the end of 2026, including 14 gigawatts from overseas facilities. We expect module shipments to be between 13 gigawatts and 14 gigawatts for the fourth quarter of 2026 and between 75 gigawatts and 85 gigawatts for the full year 2026.

Thank you, Mr. Li. We are pleased to report that both our robust global sales network and strong product competitiveness drove quarterly and annual module shipments to once again rank first across the industry. Total shipments were 26 gigawatts in the fourth quarter with total modules accounting for nearly 93% of the mix. For the full year, 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% of shipments. Shipments to the U.S. were in line with our expectations and accounted for approximately 5%. We continue to optimize our product mix, increasing the proportion of high-efficiency product shipments and focusing on high-value application scenarios. These high-efficiency models, highlighted by the Tiger Neo III, have earned widespread recognition for their higher power generation and 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 a recent global energy storage Tier-1 list for the first quarter of 2026, we were recognized as a Tier-1 energy storage provider for the eighth consecutive quarter. Furthermore, we achieved an S&P Global Corporate Sustainability Assessment score of 78 points, the highest among PV module companies, and we were included in the 2026 Sustainability 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 parks. This provides a solid foundation for continued growth in the Chinese solar market during the 14th Five-Year Plan. Globally, the ongoing electrification process, the continuous growth of new power loads from data centers, and increased focus on energy security following recent energy crises are collectively driving demand. Local solar and solar-plus-storage solutions and their deployment flexibility are ideally positioned to address these issues, build healthy energy system resilience, and facilitate incremental power demand for countries. By the end of the fourth quarter of 2025, cumulative global module shipments surpassed 390 gigawatts with our sales network covering nearly 100 countries and regions. Notably, total cumulative shipments of our Tiger Neo series exceeded 220 gigawatts, ranking first in the industry as we continue to reinforce our global market leadership and 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 Pan.

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, $25 million higher than the target we set at the beginning of the year to reach positive full-year operating cash flow. Looking ahead, we expect full-year operating cash flow to remain positive. Looking at our fourth quarter financials in more detail: 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 solar 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 and 3.8% in the fourth quarter of 2024. The sequential decrease was mainly due to a higher revenue 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 $473.6 million, up 28% sequentially and 21% year-over-year. The sequential and year-over-year increases were mainly due to an increase in the impairment of long-lived assets in the fourth quarter of 2025. 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 2025 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 USD 201 million, a decrease of 86% year-over-year. Gross margin was 2.2% compared to 10.9% in 2024, primarily due to a decrease in average selling price of modules. Total operating expenses were $1.48 billion, down 23% year-on-year, primarily due to a reduction in shipping costs driven by lower volumes of solar module shipments and declining average freight rates in 2025 as well as lower employee compensation costs. Operating loss margin for the full year of 2025 was 13.6% compared with 3.6% for the full year of 2024. Excluding the impact of changes in fair value of convertible notes issued by JinkoSolar in 2023, changes in the fair value of long-term investments, share-based compensation expenses, the net loss resulting from an incident at one of our production facilities in Shanxi province in 2024, and the impairment of long-lived assets, adjusted net loss attributable to JinkoSolar Holdings ordinary shareholders was approximately $48 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 with $3.8 billion at the end of the third quarter of 2025 and at the end of the fourth quarter of 2024. Accounts receivable 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 $5.6 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.

Operator instructions were provided. Your first question today comes from Philip Shen from ROTH Capital Partners.

Wanted to get your outlook and assumptions for pricing for Q1 and Q2. In your prepared remarks, you said you expect the global ASP to be stable. But are you assuming $0.10 a watt 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 lower than Q4? And can it go higher from here? Are you guys hearing my question?

Sorry, Philip, this is Charlie. My phone was muted. Can you hear me now? Let's get back to your question. If you look at the price index and the market pricing, module prices have been rebounding over the last three to five months, reflecting cost inflation. I think most of the Tier-1 companies are more disciplined. Also, there's a backdrop of capacity rationalization. Specifically for Q1 and Q2 ASP, we expect quarter-by-quarter improvement and gradual recovery. It's a combination of price inflation pass-through and the fact that we are marketing next-generation Tiger Neo 3 high-efficiency products, which are commanding a price premium. As a combination, the market price is up and players are more disciplined, and we have a stronger mix of high-efficiency products.

Great. So we can see pricing improves. Can you quantify at all? So Q1, do we see $0.11? Q2, do we see $0.12? And then can you also speak to Q1 and Q2 gross margins?

We are not in a position to disclose detailed ASP guidance. But if you look at the market price for different products and regions, it's roughly in the range of $0.115 to $0.14 per watt, depending on product type and region.

Your next question comes from Rajiv Chaudhri from Sunsara Capital.

I have a few questions. First is on the gross margin impact of the three factors you mentioned: foreign exchange, the U.S. dollar rate, cost of silver and the cost of polysilicon. Can you break down for us the significance of each of these factors? If these factors had not shifted from Q3, what could gross margin have been in Q4 so we understand the impact?

If nothing had changed, we would expect Q4 margin to be stable or perhaps a little higher. However, Q4 faced some headwinds. Regarding magnitude: the biggest impact was commodities, particularly silver. The silver price rose significantly; market prices were up roughly 250% to 300% compared to prior periods, which was a material impact. The second factor was RMB appreciation against the dollar. Polysilicon prices were slightly higher in Q4, but that was a less significant impact compared to silver and currency.

Okay. So silver was #1, exchange rate #2, and polysilicon much less. Next, on depreciation and CapEx: what were depreciation and CapEx numbers for 2025, and what is your target for 2026?

Depreciation in 2025 was roughly USD 1 billion per year. CapEx in 2025 was also roughly USD 1 billion. For 2026, we expect to further cut CapEx to roughly RMB 5 billion, which is approximately USD 700 million. The investment last year was largely to upgrade roughly 40 gigawatts of capacity to next-generation technology, which we call Tiger Neo 3. We do not have major additional investment plans in 2026; remaining payments in 2026 are mainly outstanding payables to suppliers from past investments.

I see. On market share and market size: can you give an idea of what you think the market size was in 2025 so I can calculate your market share? Related, what market share do you expect in 2026 based on your guidance?

Last year we delivered roughly 86 gigawatts and were the top company in the industry. Our market share was roughly 13% to 14%. For 2026, we expect global demand to be a little flat or slightly down versus 2025, given that China reached a very high peak last year. Overseas markets should continue to grow in 2026, but overall the total market size could be a little lower compared to last year because of China-specific dynamics. We guided to 75 to 85 gigawatts for 2026; our market share should remain relatively stable. Our key operational targets for 2026 will be improved financial performance, healthy operating cash flows, and more focus on high-value customers in both the utility and distributed generation segments.

Would you expect the share of international shipments to be higher than last year in 2026?

Yes. We are trying to lower our exposure to the China market. China accounted for around 40% of our shipments in 2025. I expect China percentage to fall to around 30% or lower in 2026 as we increase shipments to overseas markets, particularly markets that are more disciplined and where customers are willing to pay for brand, quality, and high-efficiency products.

If some of the Tier-3 and weaker companies exit the market, shouldn't your market share grow in 2026 even if the overall market is down? Are you being conservative with your guidance?

This is not a conservative estimate; we view 2026 as a transition year. We do expect some Tier-2 and Tier-3 and even some larger players to face consolidation or liquidation issues. What we want to do is penetrate markets with customers who are willing to pay a reasonable price, where we can achieve reasonable profitability.

On the exchange rate: you experienced negative margin pressure because the dollar weakened against the renminbi and your products are priced in dollars globally. Would you consider shifting pricing to another currency so future RMB appreciation doesn't punish you?

We are trying to minimize currency risks. Price determination in sales orders depends on customers and their currency exposures. Many of our customers have PPAs priced in U.S. dollars, so pricing modules in dollars is a natural fit for them, but some customers are willing to pay in RMB and we encourage those customers to do so to reduce currency exposure. We also use currency hedging where possible. We periodically reassess exchange rate expectations and incorporate them into pricing for future sales orders.

Your next question comes from Alan Lau from Jefferies.

First, I would like to understand the company's view on potential collaboration with U.S. leaders on local plans in both space-based solar and large local 100-gigawatt deployments. I heard that Tesla and SpaceX have made progress. Will the company share updates on that front? Also, there's market discussion that China may be prohibiting or stopping the export of solar equipment. Would that impact such collaborations?

I don't have any information or comment on potential wider policy changes in China. Regarding the U.S. plans you mentioned, public information suggests ambitious plans, including very large deployments driven by rising electricity demand from AI and data centers. Some U.S. parties have visited Chinese manufacturers, including Jinko. From Jinko's perspective, we are a pioneer and innovator in TOPCon technology and have strong capabilities to build integrated capacities, digitalization, and robust manufacturing. We are open to exploring corporate opportunities with partners in different countries, but we have no specific further information to disclose at this time.

Understood. Regarding patent litigation: there has been discussion about patent claims raised by First Solar. Is this impacting your U.S. shipments?

We do not expect any disruption or material impact to our ongoing business in the United States from First Solar's litigation. We have engaged experienced lawyers and do not believe we infringe the relevant patents of First Solar; we have researched our production process thoroughly. A couple of years ago, we engaged in a Section 337 investigation with another solar company and remained in the final stages. We have done significant preparation work and are confident there will not be an adverse impact to our U.S. operations.

Switching to the U.S. tariff safe-harbor and the manufacturing requirement: are there sufficient projects already safe-harbored for this year? Any progress in sourcing partners for long-term compliance or local investment?

There is a significant amount of downstream safe-harbored projects that will move to construction and commissioning over the next two to three years. For compliance related to our manufacturing in Florida, we are in final stages of negotiations with potential investors. If there are any significant developments, we will make announcements. We expect closings in the next couple of months.

On ESS, the Chairman guided to potentially doubling shipments. Which regions will drive that growth? Any AI data center-related deals being negotiated?

For storage business, we are in early-stage discussions with several potential customers in the AI data center sector and hope to finalize some deals by the end of this year. In terms of geography, China currently represents roughly 10% to 15% of our ESS sales. Our focus will be Europe, Latin America, the Middle East, and Asia Pacific. In the U.S., last year we shipped around 600 megawatt-hours, and we are building our teams there. We hope to make significant breakthroughs in the U.S. market in 2026 as well.

Is there an expected gross margin target for the ESS side of the business?

We estimate ESS gross margins in the range of 10% to 15%. We have a good backlog, and the industry is facing some cost pressure, but we are managing exposures and expect margins roughly in that range.

On shareholder returns, what's the plan for buybacks or dividends this year?

We will consider a combination of share repurchases and dividends, but the magnitude has not been determined. We will make decisions based on cash allocation between equity investments and shareholder returns. The U.S. holding company has around USD 200 million in cash, and we are evaluating investments, including in solar-related robotics and other industries. We intend to allocate between equity investments and shareholder returns and expect to have sufficient cash to return to investors, potentially in the range of 50% annually of available excess cash, though the exact amount is to be determined.

Your next question is a follow-up from Philip Shen from ROTH Capital Partners.

I wanted to ask about the perovskite outlook. You highlighted your lab efficiencies; what's your perspective on when perovskite could be commercialized at scale in your capacity footprint? Are we looking at 2 to 5 years, or beyond 5 years?

In the lab, our perovskite tandem technology has achieved promising results. For commercial mass adoption, there is still considerable R&D and scaling work to do. We believe commercialization could be in the 3 to 5-year timeframe, but it is not in the very near term.

Regarding shipments to the U.S., your deck shows 5% of shipments went to the U.S. What is your expectation for U.S. shipments in 2026?

We expect shipments to the U.S. to be in the 5% to 10% range of total shipments in 2026. There is some variability due to cell supply constraints, but our target is around the midpoint of that range.

When you say 'midpoint,' do you mean roughly 7.5%?

Yes, the midpoint is roughly 7.5%.

Can you talk about the source of your non-fossil sales? Are you sourcing from the Middle East or where are they coming from?

In general, we source from several different suppliers and manufacturing locations across continents, including Africa and other regions. We are able to secure some production from a diverse set of suppliers.

Regarding the war impacts: are there any impacts to your business? You have a large manufacturing facility planned in Saudi Arabia. Any thoughts on that?

For the Saudi joint ventures, we have not yet broken ground; we are still in early preparations and awaiting implementation of local policies. We have not made significant investments there yet. The recent conflict has some short-term impacts on shipments to certain Middle Eastern countries due to logistic challenges. It has also affected costs—for example, higher oil prices push up costs for chemicals and logistics. However, we don't believe these are long-term impacts. There may be short-term disruptions in some countries, but we can manage and work with customers to reschedule or adjust logistics.

How much of your shipments to the Middle East did you plan for 2026 pre-war as a percentage of full-year shipments?

Pre-war, we planned roughly 20% of shipments to the Middle East for the year, but some countries are more impacted than others. In the short term, perhaps half of that exposure may face challenges.

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