Hello, ladies and gentlemen and thank you for standing by for JinkoSolar Holding Company Limited Third Quarter 2013 Earnings Conference Call. At this time, all participants are in a 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 to Mr. Sebastian Liu, JinkoSolar’s Investor Relations Director. Please proceed, Sebastian.

Thank you, operator. Thank you all for joining us today for JinkoSolar’s third quarter 2013 earnings conference call. The company’s results were released earlier today and available on the company’s IR website at www.jinkosolar.com, as well as on the newswire services. We have also provided supplemental presentation for today’s earnings call, which can also be found on IR website. On the call today from JinkoSolar are Mr. Chen Kangping, Chief Executive Officer; Mr. Arturo Herrero, Chief Strategy Officer; and Mr. Zhang Longgen, Chief Financial Officer. Mr. Chen will discuss Jinko’s business operations and company’s highlights, followed by Mr. Herrero, who will talk about the company’s business strategies and Mr. Zhang who will go through the financials and guidance. They will all be available to answer your questions during the Q&A session that follows. Please be noted that today’s discussion will contain forward-looking statements made under 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 laws. Please be noted that to supplement its consolidated financial results presented in accordance with the United States Generally Accepted Accounting Principles, or GAAP, JinkoSolar use certain non-GAAP financial measures. The company believes that the use of non-GAAP information is useful for analysts and investors to evaluate Jinko’s current and future performances, based on a more meaningful comparison of net income and diluted net income per ADS, when compared with its peers and historical results from prior periods. These measures are not intended to represent or substitute numbers as measured under GAAP. The submission of non-GAAP numbers is voluntary and should be reviewed together with GAAP results. It is now my pleasure to introduce Mr. Chen Kangping, CEO of JinkoSolar. Mr. Chen will speak in Mandarin and I will translate his comments into English. Please go ahead Mr. Chen.

Thank you, Sebastian. Good morning and good evening to everyone and thank you for participating. I am extremely proud to report that JinkoSolar’s second consecutive quarter of profitability following robust quarter-over-quarter growth in revenue, module shipments, and net profits. We have picked up considerable momentum from the strategic investments we made during the downturn. During that time, we have successfully penetrated new markets, broadened our geographic reach and expanded our downstream business, which has already resulted in net profitability for the entire year, a goal we initially set for ourselves to complete by the end of 2013. We now look forward to closing out the year on an even stronger footing. JinkoSolar is now solidly among the leading global solar PV companies with gross margins, that have steadily improved to 22.3%. Thanks to our leading cost structure, improving global ASPs and growing profits from solar projects. I believe our strong operational and financial performance demonstrates management’s effectiveness and ability to execute its strategy. Having regained profitability for the second quarter and having achieved net profitability for the entire year a quarter ahead of the schedule, we are now devoting our substantial resources and attention to expanding our downstream business as we continue our transformation from a traditional manufacturer to a one-stop energy solution provider. The follow-on public offering of 4,370,000 ADSs we issued during the quarter is another vote of confidence by the market in our future and the direction we are headed. We raised approximately $67.8 million to further improve our working capital and cash reserves and are eager to put the cash to work. The capital will be used to supplement our working capital and invested into one of the most exciting business segments: our downstream projects. Our transformation from a traditional manufacturer to a one-stop energy solution…

Thank you, Mr. Chen. Thank you to all of you for attending our third quarter earnings call. As JinkoSolar’s Chief Strategic Officer, I am pleased to provide you with an overview of our successful business and highlight some of our achievements in the third quarter 2013. We are now seeing the success of the strong brand awareness, high-quality modules and excellent service that Jinko name now represents to the customers. According to our analysis based on several well-recognized sources, we can see a big decrease on the utility market, by largest percentage over the past year felling from 17, 18 gigawatts last year to approximately 10 gigawatts to 11 gigawatts expected in 2013. Despite challenging electrical markets since 2011, Jinko which has to succeed by adapting our business through market diversification and expansion into both consolidated and emerging PV markets. Our services now cover residential, commercial and utility segments. Our strategy has been to take local approach to each of these markets and countries where we identify interesting opportunities. Following this strategy, we have successfully reduced our exposure to the European markets and we are now focusing for the promising PV markets such as China, USA, South Africa, Japan, India and Latin America. We successfully anticipated the changes that have taken place in the market and have been investing heavily into new geographies, the proven resources and recruiting professionals in local countries as part of our local efficient strategy. In the third quarter, we continue diversify our customer base and develop relationships with new customers. So far, we have established strong commercial relationships with more than 250 customers across more than 30 countries. During the quarter, we improved our sales and deliveries across a range of markets. We continued the business in China, a key market for Jinko, where we…

Thank you, Arturo. Good morning and good evening to everyone on the call. First, I would like to walk you through our financial results for the third quarter of 2013 followed by fourth quarter and full year 2013 guidance. As Mr. Chen mentioned earlier, total solar product shipments in the third quarter of 2013 were 518.9 megawatts. Total revenues in the third quarter of 2013 were $320.7 million, an increase of 11.2% sequentially and an increase of 47.6% year-over-year. Gross margin was 22.3% in the third quarter of 2013 compared with 17.7% in the second quarter of 2013 and 5.8% in the third quarter of 2012. The sequential increase in gross margins was primarily attributable to improving solar module ASPs and high gross margins generated from solar products. The year-over-year increase in gross margin was due to improvements in operating efficiency and continued cost reductions for the company’s polysilicon and auxiliary materials, and higher gross margin from electricity revenues of solar projects, which were partially offset by declines in solar module ASPs. In-house gross margin relating to in-house silicon wafer, solar cell and solar module production was 21% in the third quarter of 2013, compared with 18.3% in the second quarter of 2013 and 12.6% in the third of last year. Income from operations in the third quarter of 2013 was $39.9 million compared with income from operations of $25.4 million in the second quarter of 2013 and a loss from operations of $17.7 million in the third quarter of last year. Total operating expenses in the quarter of 2013 were $31.6 million, an increase of 24.1% sequentially and an increase of 2.3% year-over-year. The sequential increase was primarily due to the decrease in reversal of provisions for bad debt by $4.1 million and an increase in shipping and warranty…

Thank you. We will now begin question-and-answer session. (Operator Instructions) Your first question comes from the line of Philip Shen from ROTH Partners. Your line is open. Please go ahead.

Hi everyone. Thank you for taking my questions.

Hi Philip.

So the first question is on projects, with more than 200 megawatts coming online by the end of this year and now those 300 megawatts in ’14, can you update us on your plans for these projects, can you talk about us – talk about when you expect potential timing of the Jinko’s spinoff or other ideas that you may have? Thanks.

Philip to answer your question I think by the end of this year the total 213 megawatts total I think of 10 projects will be connected with the grid by the end of this year. So these projects will be fully run electricity by whole year 2014. During 2014, our plan is to add another 300 megawatts to 400 megawatts it’s upon our financial situation. So basically from now on we believe I think we are going planning to hold the project rather than to sell the project, because most – all the projects as we developed, so as we – and I think on the roadshow we also say that existing right now current 230 megawatts without leverage our average IRR is about 12%. So to be in the future yes, we will consider the window and the cash flow window and the possible to spin-off either in U.S. market or Hong Kong market it depends on the regulations and also capital market. But in the worst to maximize Jinko’s shareholders the value profit I think we will consider the timing and also the valuation in our go to the market.

Great, thank you Zhang. Let’s talk about ASPs, can you talk this about what you expect for Q4 ASPs I think you talked about in your prepared remarks potential upside to $0.63 in Q3 and then what do you see for ASPs beyond Q4 given the global supply and demand dynamics?

Basically I think Q4, I think you already know the ASP figure, I think basically compared with the Q2, we increased a lot I think. The major I think is take the geographical distribution is in the third quarter as also Arturo mentioned that around 46%, 45% in China, then Asia-Pacific is around 18%, Europe is 16% and North America is 10% and also other emerging markets. I think, especially in the U.S., Japan, the sales percentage continued to increase with the help of the ADS. And for the fourth quarter, because most of the contract is already signed, I think the top line is always signed actually before its earnings. So we think the ASP will be stable slightly increased maybe.

Okay.

Let me add that we are seeing quite stabilize on the pricing, the ASP globally, but also globally you have seen that global demands also have increased. So what we are seeing that the dynamics of the market has been changed for the last few months and there is no new or such a big oversupply also because some of our competitors has also out of the business. So it’s a good point that we probably will see ASPs getting stronger in the global business and some countries like, for example, Japan and a few of the first tenders in South Africa has been helping in the past quarter.

Arturo, how much longer do you see ASP strength for? I mean, do you see it going through Q1 and Q2 of next year as well?

Yes, I think so. The visibility we have today is much better than definitely one year ago. So we have already contracts signed for 2014 in some markets and we are seeing the demand is still strong, especially China, Japan, markets like South Africa for Jinko, especially USA and it helps also that in Europe there is high price for the agreement between the European Commission and the Chinese government. So definitely next year if we see the growth of emerging markets like South America, Africa and Middle East, definitely we will see much more demand that will increase the ASP at least for the next two quarters.

Great. And Arturo, what do you see for Q1, historically it’s a seasonally soft quarter, but do you expect some potential strength, do you see some channel demand coming through given the strong markets through the end of this year, what are your thoughts in Q1?

Yes, I think there is a continuation. So there is not a big change as we saw other years before when winter was coming. Now, it’s quite stable, because there is timing of complementary demand coming from markets when Europe is in cold winter, right or China also is in the winter, but there were concerns that still whether it will be okay and we will still be seeing some demand coming, especially as I was telling you the contracts we have already signed in South Africa will help a lot for the Q1.

Great. One last question, I will jump back in queue. Can you talk to us about 2014 shipments, I know you haven’t given official guidance, but any kind of color that you can provide would be helpful?

I think to answer your question, 2014 we will give the guidance in Q4 earnings release. Basically if you look our Q4, I think guidance that you can, because I think the demand just like Arturo said also in 2014 so far, our capacity almost half is already I think contracted out. So basically we were very optimism in 2014. We will give guidance in the next earnings release.

Okay, thank you Zhang, Arturo and the rest of management team. I will turn back in queue.

You are welcome.

Your next question comes from the line of Brandon Heiken from Credit Suisse. Your line is open. Please go ahead.

Hi team. Congratulations on the quarter.

Hi, Brandon.

Thank you.

Can you help us understand the different milestones and the hurdles for developing the distributed generation projects in your pipeline versus the utility scale projects, it looks like you have 400 megawatts of distributed generation and 700 megawatts of utility projects in the pipeline?

Okay. Basically I think for the solar farms, the distribution between the solar farm and distributed projects is it’s good to point that we have to find the consumer, for example, to the buyer, the final buyer, user, the utility user. So basically for the two projects you say you have more extra step of work, you have to find that you say who is the final user to pay the general fee, see then the government, they are top at, if we can give you $0.42, etcetera I think distributed right now, the projects most is running in China is in Eastern Coast area. For example, the projects announced in Xinjiang Province, basically the economic zone is 220 megawatts, that project is strategic right now the contract, because to develop that project should be step by step is solid, because you have to sign contract to see who is the final user, investor that you generated then they pay the (indiscernible) fee, for example, right now in Xinjiang Province is $0.70 to $0.75, then the governments give you extra if you can cover $0.42. So if you add together, it’s around $1.17 whatever in that range. So it should be high than right now solar farm divided in the four areas in China. But solar farm is easier to I think to do to install to implement it, because as soon as we got approval got connected with the grids, you don’t worry about the sale, so you now connect with the final consumers. So basically I think to us, I think we in the majority of our future is skewed in the solar farm and therefore distributed projects yes, we also will do that, but we are very cautious and prudently in order to do that. Is that answering your question?

Yes, I think so.

It is around 10% to 20% in kind of our total I think the downstream projects.

I am sorry, what is 10% to 20%?

I think in the future maybe distributed projects maybe accounted for our downstream, I think around the 10% may be 20%.

Got it, okay. And have you heard any updates from the government on when the monthly feed-in tariff payments are expected?

I think so far we already connect you see as this quarter I am not sure you read the announcement basically TWC audit also starting this quarter to recognize the electricity revenue based on our curve you see principals and starting this quarter. Basically we already collected you see all the fees by the end of December last year and this year we will also step some projects is already collecting this year fees. Basically the governments right now is incurred to pay the fee feed-in tariff on time, but maybe some projects like one month, two months or even three months delayed, but the overall guidance is government is going to pay the feed-in tariff on time (indiscernible).

Okay. And do you have any new plans for capacity expansion?

That I think you can see the pipeline is almost right now the solar farm is 700 megawatts, distributed projects is 400 megawatts and it’s not only the projects you see we have in the pipeline, but also we have to consider our CapEx, the cash flow consider all the situations, so, so far we think we believe you see our own planning is underway.

Okay, thank you guys.

Then by the end of this year, yes, we were connected 230 megawatts then maybe also around 50 to 100 megawatts will be under construction maybe even more.

I guess my question was on the capacity, manufacturing capacity, have you decided on when that if there maybe expansion?

The manufacturing side I think as of September 30, we have the capacity on the ingots, wafer, cell is 1.5 gigawatts and on the module is 1.8 gigawatts. And basically as the last time, we also right now is looking for some distressed assets on the wafer and the cell settlements. If it’s appropriate, if it’s efficiency we will also increase without too much we will also to expansion slightly. But on the module side we will continue maybe by the end of this year to continue to increase maybe to 2 gigawatts or even above 2 gigawatts.

Great thank you.

That means we are not evenly to increase our capacity. Basically we will increase our module capacity faster than our capital intensive investments on the sale and waiver settlements.

Okay, thank you.

Your next question comes from the line of Colin Rusch from Northland Capital Markets. Your line is open. Please go ahead.

Thank you so much. Thanks for taking the question. Can you talk a little bit about the development of the African market as well as the Latin American market, it looks like there are some very sizable projects notably one in Uganda that looks like its started construction or slated for construction here in ’14 through 2016 and the potential for those markets, obviously they are fairly immature markets but if you can talk about how you see those two continents turn into overall over the next couple of years I appreciate it?

Okay, this is Arturo. Yes, I will answer your question. Mainly being in charge, I am focusing a lot on the emerging markets right now will give us a lot of visibility in the short, mid and long-term. So what I can answer to you is that we have (indiscernible) already having very high level meetings with government in Uganda as you mentioned, also in Kenya and in other African countries where we are seeing some huge potential for the next future. The only thing is that this process definitely will not happen easily and will not happen in the short-term. And the main reason is because there is a lack of financing and even if the governments are very keen to support the price of electricity in some of these countries is quite low. And they don’t have the financing support unless there are international companies from Europe or international banks supporting these initiatives. We are seeing also some good development in – outside Africa in countries like Middle East or like South America where there are still more possibilities in terms of financing but also there is long way to go in terms of negotiation for PTAs. So countries like Chile is material we are very active there, we have already installed over 2 megawatts and we are in big tenders where there is PTA possibilities and we will see them coming especially in the second half of next year. So countries like Mexico, Brazil will take be a little bit longer but definitely the next two years will be very interesting for these emerging markets.

And can you talk a little bit about the potential for micro-grid projects in some of these regions, are these only big large grid connected products or are you starting to see real legitimate micro-grid products trying to move forward?

Well, there are three different segments where we are also identifying opportunities and being very active with our partners. One is the largest utility connected grid projects that as I told you they are huge. There are some projects of 50 megawatts, 80 megawatts like in South Africa the ones we are used to in these markets. But then there is also opportunities with industrial companies like mining, they are negotiating right now with our developers with companies that we supply the modules to. And in this negotiation between the mining companies and developers from Europe for example we are reaching agreements of PTAs for 15 or 20 years. So in these cases, there are medium-sized projects where I think there are much more probabilities to team on board and to be connected in next few months. And finally, the third segment is residential and only we have seen residential demand in countries where there is kind of recognition for self consumption net metering, like for example in Brazil or in Mexico.

Okay, thanks so much.

You’re welcome.

Thank you.

Your next question comes from the line of Paul Strigler from Esplanade. Your line is open. Please go ahead.

Hello.

Hello Paul.

Hi, I didn’t recognize my name. Just a couple of questions on your Chinese projects, Zhang did you say you have spent $70 million in CapEx in the quarter and does that include solar project investments?

No this is, okay. $70 million is just as the CapEx, okay it’s not including the project under construction, is that clear. The projects under construction is the current assets. So as of September we totally invested around I think $220 million on the project side. So that $50 million in theory is to increase the module capacity and also other maintenance in our CapEx.

Great. And then just a couple of modeling questions on the projects, I know it costs you guys about $1.30 to $1.50 or $1.60 per watt just to build the projects, but you are also capitalizing other costs into there, what I the – what are you capitalizing on the balance sheet per watt for cost?

Okay first of all I am not sure that the financial figure you come from. For the 230 megawatts by the end of this year if we totally completed, okay cost per watt is around like RMB9 is around $1.50. As soon as we are finished we generate electricity, so we move the assets from current assets project under construction to fixed assets. So with being recognized the general recognized – for example this quarter we recognized I think a total yesterday around $6.53 million revenue. Of course, of which partially is before I think Q3, so then we also to take the depreciation cost as the cost of revenue. Is that clear?

Yes, and then one last modeling question when I think about the cost of goods on that electricity sale, what’s the useful – how long are you depreciating that dollars – RMB9 per watt over, what’s the useful life?

It’s 20 years, yes.

Alright, great, thanks guys. Great quarter.

Thank you.

Thank you.

Once again…

No I think is it clear, question basically in Q3 if you look our gross margin total is 22.3% excluding that the downstream products, the revenue and the cost because the product side is gross margin and is above 60% and then excluding that purely the manufacturing side, our gross margin is 21%. Next question?

(Operator Instructions)

Okay, so on behalf of the entire JinkoSolar’s management team I want to thank you for your interest and participation on the call. If you have any further questions or concerns please feel free to contact us. Have a good day. Thank you and good luck.