Sebastian Liu - Investor Relations Director Chen Kangping - Chief Executive Officer Cao Haiyun - Chief Financial Officer Gener Miao - Vice President of Global Sales and Marketing.

Philip Shen - Roth Capital Partners Maheep Mandloi - Credit Suisse Brian Lee - Goldman Sachs Alex Liu - UBS.

Ladies and gentlemen, and thank you for standing by, and welcome to Quarter One 2018 JinkoSolar Holding Company, Ltd Earnings Conference Call. At this time, all participants are in listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions].

I would now like to hand the conference over to your speaker today, Mr. Sebastian Liu. Thank you sir, please go ahead..

Thank you, Operator. Thank everyone for joining us today for JinkoSolar's first quarter 2018 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's 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. Chen Kangping, Chief Executive Officer, Mr. Cao Haiyun, Chief Financial Officer, Mr. Gener Miao, VP Global Sales, and Mr. Sebastian Liu, IR Director. Mr.

Chen will discuss JinkoSolar’s business operations and company highlights, followed by Mr. Miao, who will talk about the sales and marketing, and then Mr. Cao, who will go through the financials. They will all be available to answer your questions during the Q&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. 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..

Thank you, Sebastian. Good morning and good evening to everyone and thank you for joining us today. We shipped 2,015 megawatts of modules during the quarter, a decrease of 18.8% sequentially and a decrease of 2.6% year-over-year.

Total revenues during the quarter was $728.1 million, a decrease of 28.1% sequentially and a decrease of 20.9% year-over-year.

Gross margins however increased to 14.4%, compared with 11.6% of last quarter, actual benefits from the drop in polysilicon prices and further optimization of our manufacturing costs as a result of continued technology improvements and reduced OEM usage.

Market sentiment was impacted by the new policy jointly issued by three Chinese ministries on May 31. The new policy aims at increasing the pace of grid parity, accelerating the removal of outdated capacity and releasing the pressure of new energy fund deficits.

Despite the strong initial negative action to the new policies, we expect demand in China to still hit 35 gigawatt plus in 2018 of which 13 to 14 gigawatts will begin in the second half of the year including approximately 7 gigawatts from Top Runner Program, 4 gigawatts from PV poverty alleviation projects, and 2 gigawatts from local government supported DG project in addition to other grid parity projects.

In addition, [indiscernible] market [growth] [ph] maybe once again, above our expectation.

The silver lining behind the new policy of that will actually benefit us over the long run we expect to say a decline in cost across industry chain long enough to further cut costs for both silicon and non-silicon to offset the impact of module ASP decline in the second half of the year.

We already have great visibility for the whole year 2018 with over 80% of our order book already filled of which most of them are overseas orders with fixed prices and a number of payments already made. Our production capacity is fully utilized now and will remain so during the second half of the year.

Therefore it’s safe to say that the new policy will have relatively limited impact on our operations. That said, our gross margin and net profit will improve in the second half of the year as a result of a further decrease of polysilicon price and our technology improvements.

We also believe the impact of new policy for the industry will be shortened and we are confident in our future business prospects and long term growth of the industry. I’ll let Gener go over the market details later, but I would like to highlight a few things here.

First, overseas orders [indiscernible] about 80% of our overall shipment as we benefit from our global footprint. We do not rely on a single market.

Second, solar has become increasingly competitive globally with demand driven by markets achieving grid-parity including resurgence demand in Southern European markets such as Spain, Portugal and Italy, as well as booming demand in new emerging markets such as Latin America, Middle East and North Africa.

We also expect that with further cut in cost, demand in India will rebound strong as well. Third, we remain optimistic about Chinese demand.

Looking to 2019 aside from Top Runner Program, poverty alleviation projects and DG project we also expect to see large amounts of grid-parity project combined with new business model appear in the second half of 2019.

On the technology front, we continue to develop new sources towards [indiscernible] of high efficiency technology, we are optimizing the cost structure of our product. Our integrated cost keep improving especially from mono wafers including improvements in argon recovery, diamond wire usage and wafer thickness.

During the quarter, we broke our own world record for P-type monocrystalline solar cell efficiency which hit 23.95%.

We also made substantial progress in the development of advanced hydrogenation and floating busbar technology, which we expect to apply across our mass production line [Indiscernible] Our [indiscernible] combined with light reflect film technology is also leading the industry in terms of capacity and quality.

With demand for the high efficiency product increasing, we are fully prepared to provide our clients the highest quality, most reliable products with the highest output in the market as we continue to do well in industry leading technology.

Turning to manufacturing capacity, our internal wafer, cell and module capacity reached 9 gigawatt, 5 gigawatt, and 9 gigawatt, respectively.

By the end of the first quarter 2018 we expect to reach 9.7 gigawatts, 6 gigawatts, and 10.5 gigawatts respectively by the end of year, of which approximately 5.7 gigawatts will be mono wafer, approximately 3.5 gigawatts will be PERC cells.

We remain cautious about expanding our manufacturing capacity and it will continue to maintain our flexibility to balance the CapEx and the business growth. Looking at the second half of 2018 and 2019 the change in policy in China will create a challenging environment that created a market uncertainty and the lower domestic demand.

But as industry leader, our extensive global sales network and geographically dispersed manufacturing facility allow us to remain flexible and rapidly adapt to any policy changes. We are fully prepared for the market consolidations and new era of grid parity.

We will take full advantages of our brand, technology, and global infrastructure to expand our market share and further consolidate our leading position in the industry. Before turning the call over to Gener, I’ll quickly go over our guidance.

Based on current estimates, total solar module shipments will be in the range of 2.4 gigawatts to 2.5 gigawatts for the second quarter and 11.5 to 12 gigawatts for the full year. Thank you, Sebastian. With that, I’ll turn it over to Gener..

Thank you, Mr. Chen. We shipped 2,015 megawatts of Solar modules this quarter, slightly above the high end of our [indiscernible] guidance. Looking into the second half year, while the Chinese margin will be impacted by the new policy, we expect to see global demand remain healthy and strong.

We already have sufficient orders in the hand with full year visibility exceeding 18%. Our capacity utilization rates remains at 100% and new and emerging markets [indiscernible] growth momentum all of which leaves us confident to generate solid financial and the operational results for the entire year.

Looking at the geographic distribution of our shipments in the first quarter, the emerging markets including Middle East, Latin America and Africa accounted for approximately 40% of total shipments. The Asia Pacific region was the second followed by China, North America and then Europe. This demonstrates the result of our global reach.

Continued geographic diversification and [overlooking][ph] strategy which has also reduced our reliance on any single markets. Shipments in China will account for less than 20% of shipments this year with U.S. shipments expected to increase during the second half of the year as we began delivering for the big contract we have signed here. As Mr.

Chen just mentioned, despite the headwinds created by the new policy in China, we believe Chinese market we still reach 35 gigawatts for 2018. Our focus during the second half of the year will be on the Top Runner projects and poverty alleviation projects.

DG programs with solid business model or that are supported by the local governments are also expected to generate new demand. We remain cautiously optimistic about demand in China in 2019, before first even the current rate of the cost reduction which we believe will generate more grid parity projects coming online next year.

Second, local government supported DG and the residential markets still have lots of potential and third, resurgence of China market, biggest solar market in the world is now under estimated. Turning to U.S. markets, after gradually dragging down inventories in the channel during the first half, demand there has begun to increase again.

We expect the full year’s demand to reach 9 gigawatts this year and 11 gigawatts next year. ASPs in the U.S. market remains realistically stable as U.S. capacity remains limited, while our manufacturing facility in Florida is expected to begin delivering product in the second half of the year. The U.S.

market has continued to show strong vitality and a great potential despite the impact from Paris. The only uncertainty is the potential excavation of [Indiscernible].

Turning to the Asia Pacific region, as a result of aggressive early stage bidding, many products in India have been delayed, which resulted in a substantial amount of the unreleased demand. However, as the crowding impact in China intensifies after announcement of new policy along with falling ASP we expect that Indian markets to be in demand [ph].

The Australian market is stronger than expected as these utility projects start demand and we have over 1 gigawatt compact there secured. Japanese subsidies continue to fall as the bidding system there gradually step in and more self-contained projects pop up, which are creating new opportunities. The European market has significantly rebounded.

Aside of Germany and the new [Indiscernible] demand being driven from Southern European market with high energy parts effective spend where Solar is meaning energy [Indiscernible] grid and possible are now following the same pattern of the grid parity projects. We are very optimistic about our future market of prospects there.

Emerging markets such as Egypt, Jordan, the UAE, Saudi Arabia, Mexico, Argentina and Brazil continue to grow the forecast and are gradually becoming the main driver of global demand growth.

We will continue to strengthen our leading position in the Latin American markets and seek more opportunities in Middle East where these Central [ph] exporting countries are increasingly determined to promote an event in the expectation of solar technology. ASPs during the quarter decreased slightly when compared to this last quarter.

ASPs may continue to decline in the second half of the year given the impact from China’s new policy such as [Indiscernible]. First, we – a huge demand of our overseas contract has already been signed and second, our cost will continue to fall as the prices across the entire industry spend decrease especially for a certain cost.

We are now in a good position to take advantage of this trend. Following our streak [ph] from last quarter of high level exposure within the NHK specials, in January JinkoSolar has – was the only single module manufacturer which featured on CNN's Marketplace Middle East renewables special that’s aired on CNN's TV channel internationally.

Continuous exposure from prominent media help us reach a wider audience outside of the solar industry helping to generate the long-term demand. In March, JinkoSolar's status as a market and technical leader in this industry continued to be recognized.

We received the “Top Brand” PV Seal in Australia and Germany by EuPD Research, which awarded us the Seal base on service on hundreds of installers on their module brands of preference. From the technical leadership perspective, we were named the winner of the polycritical end group PV module energy use simulation at all policy matters solar conquest.

Each third party destination from a highly expected institution demonstrates again the great technical performance of our PERC. In Q1, we attended a trade show and participated in 53 conferences. We also hosted 35 customer training and 38 co-marketing events with key partners across the globe.

Our active global marketing events continue to allow us to reach and educate new customers about JinkoSolar’s high quality products. Now, I’d like to turn it over to Charlie..

Thank you, Gener. I would like to walk you through our Q1 results. Total solar module shipments were 2 gigawatts, down 90% sequentially, and down 3% year-over-year. Total revenue was US$728 million, down 28% sequentially, and down 21% year-over-year. The sequential decrease was due to the decrease in shipment of solar modules.

Gross margin improved to 14.4%, compared to 11.6% in Q4 and 11.2% in Q1 2017. As a result of decrease in raw material costs and the use of OEM. Our blended cost improved to US$0.31 per watt compared to 33.6% per watt in Q4, benefitting from the decrease in raw material cost, especially the polysilicon price and technology improvement.

The operating expense represented 11.6% of total revenue, compared to 10.1% in Q4 and 10.3% in Q1 2017. The sequential increase of operating expenses is primarily due to the decrease of the module shipments. EBITDA was US$43 million, compared to US$45 million in Q4 and US$30 million in Q1 2017. Net income was US$0.6 million.

This translates into basic and diluted earnings per ADS of US$0.016. Non-GAAP net income was US$1.7 million. This translates into non-GAAP diluted earnings per ADS of US$0.048. Now, let’s move to the balance sheets. By the end of Q1, cash, cash equivalents and restricted cash were US$457 million, compared to US$424 million by the end of Q4.

The accounts receivables due from the third parties were US$637 million, compared to US$691 million by the end of Q4. Inventories were US$750 million compared to US$657 million by the end of Q4. The total debt was US$1.3 billion compared to US$1.1 billion. By the end of Q4, the net debt was US$829 million compared to US$718 million by the end of Q4.

At this moment we are happy to take your questions.

Operator?.

Thank you. [Operator Instructions]. Your first question comes from the line of Philip Shen from Roth Capital Partners. Your line is now open. Please go ahead..

Hi everyone. And thank you for the questions. The first is one is on your guidance based on your shipments for Q1 and your guidance, it looks like you expect to ship volumes in the second half to be meaningfully higher than the first half.

I think the mix will be something close to 40% in the first half and 60% is the second half? Gener, I think you've mentioned you are 80% booked. And so how strong are these bookings? In past cycles we have seen down cycles. We've seen contracts get canceled with the new ASPs that are lower.

Could you see any cancellations? Or if not why not? I think you guys have a bunch of prepayments and so forth, but maybe talk about how this time might be different if it is relative to cash down cycles and why it continues to expect your bookings to remain in place?.

Yes, Philip. This is Gener. Thanks for your questions. Actually from sales side, we have seen the impact from the policy of China's government.

However, the total market -- the segment – the total segment of our customers and mainly they are working in the utility level, which they play really long-term, and that's why we have secured sufficient and also solid contact with these players as a [indiscernible] instead of the [indiscernible] market deals.

We do see some of the subcontracts being signed across this industry, but we do not see a significant volume from our customer side. We have very tiny amount of the contract has been impacted by this new policy mainly from China..

Okay, good. So you expect then most of your bookings, the 80% to be effectively - to remain effective.

Can you talk about the geographic mix of those bookings in the second half of the year especially; so I think China is only maybe 20% of the overall mix? Does it go even smaller in the back half of Q3, Q4? What is the overall geographic mix in Q3 and Q4?.

Currently, the number we have is what I can share with you and we saw is that we still see the emerging market take a big part of our shipments [indiscernible], and followed by U.S.

and also the Asia Pacific regions across the Asia region like Japan, like Australia et cetera, all those countries including India will contribute a big part of our plan to offshore. Those three parts will be the – let's say the main contributor in the second half shipments there..

Okay, great. I think as [Indiscernible] mentioned that your net profit and margin will increase in the back half of the year. With your stable bookings and supply chain pricing coming down so much, it seems like you might be able to expand your margins. So you guys had decent margins in Q1 of 14.4%.

What kind of margins do you expect for Q2? And more importantly what kind of margins you see for Q3?.

First, you're right. I think the policy put us at very good position to streamline the supply chain. And we are expecting a significant cost improvement starting from June this year.

So regarding the gross margin, because we have very solid booking and we discussed and we have already received a lot of prepayments and we think the most of the booking are executable. So, actually the gross margin we think in the second quarter is quite stable quarter-by-quarter.

But for the second half year we expect a moderate improvement for the gross margin. And it’s highly possible, gross margin will be over 13%..

Okay, great. That's great. So, you guys mentioned in your prepared remarks thank you, Charlie, that you're 100% utilized.

Is there a scenario especially as we, I mean, we're heading into Q3 now where you are able to procure wafers and cells more cheaply than you can produce? Is there scenario where you guys go less than a 100% utilized? I know you maintained your guidance here, but given the rapid reduction of ASPs and supply chain.

Is that possible to be able to procure more cheaply, buy the wafers and cells more cheaply than what you can produce? Thanks..

Yes. This is a good question. I think you're right, wafer and cells, the market price has been dropped dramatically in recent months. And – but if compared with Jinko, because we are the cost leader for the multi. At the same for the mono we have improved a lot in the recent quarters.

So if we compared our cost with the market price, we are still very competitive even for the wafer and the cell both for the multi and mono. But the good thing is because we still face capacity constraints and we need to leverage OEM continue in the second half year.

So the OEMs -- the cost is going to be squeezed a lot which will help us for the gross margin and profitability..

In the meanwhile, Philip, I think we have to look into this rational spot market price instead of short term emotional market, right. In the long-term we believe that some of these super low emotional spot market price is not [indiscernible]..

Okay. That's fair. And the last question as it relates to your cost structure, you talked about improving cost structure in the back half, you were about $0.31 for both in-house as well as blended for Q1.

What do you expect that to be in Q3 or – I think Q4 for the quarter? Not necessarily year-end, but what is the average Q4 in-house as well as blended cost structure given some of the pricing that you're seeing? Thanks..

In terms of cost improvement we are targeting I think a 20% improvement. And then roughly for the multi and mono products the cost will improve to 24% to 25%. And for the blended cost, because you know the way we expected the lower price was for the cell and OME module cost, I would expect US$0.01 higher in terms of the blended cost. .

Okay. So just to make sure I understand, Q4 cost structure it has to be US$0.24, US$0.25 and then the blended cost to be a penny higher.

And then when you look at 2019, does that -- can you continue that 20% type improvement is not what kind of year-on-year improvement would you expect in Q4 2019?.

Firstly, US$0.24 to US$0.25 is by the end of the year. It's not Q4 average number. And second one for the 2019, it's too early to evaluate the cost roadmap. But we expect because of the new policies in China and across the industry to respond and to make the China a lot -- to reach the grid parities particularly for the second half year 2019.

So we still think a lot of zoom in industry to improve the cost..

Okay, great. Thank you, Charlie, Gener and Cao Haiyun. I'll pass it on..

Thank you, Philip. The next question comes from Maheep Mandloi from Credit Suisse. Your line is now open. Please go ahead..

Thanks for taking the questions. This is Maheep from Credit Suisse. Just regarding the cost structure, could you talk us where you see that cost reduction is coming from? Because that's almost US$0.06 to US$0.07 cost reduction from your current structure, probably US$0.01 or US$0.02 comes for polysilicon side.

Could you just help us understand like what is driving that cost reduction for this year?.

I think Maheep, and you know the polysilicon has been down dramatically, right. You know the price turn down [ph] to a certain down as for multi and the mono. So it's contributing around US$0.02. And for the [Indiscernible] cost we think it's around US$0.02, US$0.03..

Is that because of shifting to mono or mono PERC? Or is it just efficiency improvements across all technologies?.

Excuse me.

Could you just repeat the question?.

Yes.

The US$0.02 to US$0.03 reduction for non-silicon, is that driven by higher efficiency or new technologies? Or is that for both multi as well as mono?.

I think the combination or the efforts from the industry and including technology, production efficiency, the polysilcon cost improvement and as well as the new materials..

And on the cost structure, you said 24 to 25, is mono significantly higher or is it in line with multi cost structure OEM?.

Mono product cost would be higher than the traditional multi..

That's -- Maheep just a mixed one. So its not concrete number, it just a mix of number we're having on. It's not a detailed number..

Sure. That makes sense. And just switching gears to the U.S market and so last week the IRS ruled over here, the tax credits would now be available technically through 2023 as long as the project starts construction in the respective tax credit years.

So I'm sure this probably too early for you, but have you seen developers pushing out deliveries to later year so that they can avoid import tariffs in the U.S and still take advantage of the tax credits after 2021?.

Yes. Our team really [Indiscernible] and we talked to some of our customers. I think in general the customers will execute the plan they have right now, because it's already on the way – on the road. And they don't have plans to pull them back.

And therefore for the long-term I believe such policy or such decision will generally be positive to the solar industry as a general, because it will further extends installation timing by another I'd say, even two years time and also it will encourage more developer to start their development cycle investments in order to get more projects on line.

So in general we believe its kind positive to the solar industry as a whole. Meanwhile we don't see a significant delay from our customer end..

Got it. And then just on your – sorry go ahead..

Sorry, Maheep, I just to supplement. If you look at this cost structure, the cost we are talking about it did not include a warranty cost, shipping cost, which depending on different regions; it's usually in the range of US$0.01 to US$0.03. So that's settlement..

That's fair enough, yeah. Sorry, on the U.S. contracts, do you have multiyear gigawatt, multi-gigawatt shipment contracts in the U.S. market.

Could you just talk about the nature of those supply contracts like these fixed volume or fixed prices or this fixed duration and what flexibility do the developers or you have on these contracts?.

Yes. So Maheep, we are not in a position to disclose the details of it. But from what we have planned and what we have seen is the plan from our customer and it’s very solid, and their financial model and the project execution plan is very reliable. That's what we can say..

Got it. And in your prepared remarks you spoke about the China market picking up in second half of 2019 and in 2020 and potential with the IRS you'll also have more demand in early 2020s as per your remarks.

So are you – when do you plan to expand capacity to address these markets? Or when do you think that decision will come in? And the other side you just like how this impact consolidate your remarks and consolidation, like when do you see potential consolidation in the industry?.

We believe the industry will consolidate perhaps we think it could happen in 2019, and particular for the capacity with other technology, and for the companies we now trending and the global sales capabilities..

Got it. And could you touch up on capacity expansion plans to address the China and the U.S.

demand?.

You mean this year or next year?.

No.

Yes, either way, either this year or later year?.

Yes. For next year it's too early. And we need to evaluate the market situation..

Yes. This year we're – it's our plan. You can just say it's our plan of the capacity by the end of the year which just announced [ph] that. So, we are quite now quite stick to that plan..

Okay. And just last question from me.

Like how much your capacity addition are you're seeing from competitors or peers on the poly, wafer or cell in 2018 and 2019?.

Sorry, can you repeat. I miss you for the first part..

Yes.

Just trying to understand, how much capacity expansion are you seeing in other companies in the industry this year or next year in the polysilcon wafer, cell supply chain?.

I don't – Maheep, this is Gener. I don't think that there will be too many new capacity expansion plans. I think according to what our peers have announced that their expansion plan -- it might be possible some of the expansion plan will be postpone or even put on hold for a while given the current market [Indiscernible] assets.

So for the detail number we do not have – at least I don't have a number on my hand right now, but I think the market – as the capacity expansion plan will be….

Slow down..

Yes. Will be slow down quite significantly..

But probably we think polysilicon, the CapEx expansion will be compared to other parts of the --- polysilcon expansion will be well deliver, because it still in the process of domestic polysilicon to replace overseas polysilicon..

Got it. Thanks for taking my question..

Thank you..

Thank you, Maheep..

Thank you, Maheep. [Operator Instructions] Your next question comes from Brian Lee from Goldman Sachs. Please go ahead..

Hey, guys. Thanks for taking my questions. Maybe first one just going back to an earlier question, the 2018 volume guidance, you haven't changed it here. It implies 50% to 60% year-on-year growth in the back half off of a pretty flattish first half trajectory.

And as recently as Q1 you were talking about China being your biggest market, obviously there's been a policy shift there. You've taken your view down in China by, looks like 10 plus gigawatts versus what you are thinking three months ago.

So question is just where is the confidence coming from that you can grow that much in the back half for the year and you don't have to change this full year guidance view? And it seems like something is offsetting the weaker China that as of three months you weren't thinking who is going to be that down on year-on year-basis.

So just trying to reconcile how the guidance isn't changing when your biggest market as of three months ago per your comments on the call has changed quite dramatically?.

Yes. So Brian, this is Gener. So our firstly, if you look into our Q1 geographic mix, you will see the presentation on China is much lower than the other key markets. So that's why we are seeing you know -- even if there's a headwind from the China new policies, and we feel we are confidence about our guidance.

And the secondly regarding the China demand itself, our plan to be focused on the demand from China especially from the Top Runner Program together with the poverty alleviation programs are still there. And those two mains demand drivers are still not be impacted too much.

And you know the canceled or the decreased demand from this DG market together with some managed [ph] DG market and some standard or the normal ground-mounted [ph] projects where we have not been plan for the year of 2018 to much even at the beginning. So that's where our confidence comes from..

Okay. Fair enough. Maybe just staying on China for a moment, you mentioned the 35 plus gigawatt view for 2018. I know there is policy factors that could come into play that aren't transparent yet for 2019, so it’s a bit early. But you talked optimistically about 2019 in China.

What's your general view on what demand could look like if you think about the different buckets, Top Runner, PV Poverty Alleviation. And then I wanted to drill down into grid parity projects a bit.

How big do you think that bucket of demand could look in 2019 from these unsubsidized volumes in China?.

I think – personally, I'm a big fan of China market for 2019 and 2020, because really this new concept market will be a huge one. If we look into the number I think the China 2019 number, the floor number everyone knows will be 21 gigawatt, but I think it will be highly possible to go up to 30 plus even 35 plus gigawatt against by 2019.

And by 2020 I think the number will be even greater than 2019, sorry 2020 will be even greater than 2019. And mainly if you look into this unsubsidized market and you will see a huge market potential because the benchmark price now, is that I'd say, RMB0.35 per kilowatt hour.

However even we look into this year's Top Runner Program in Qinghai province, the lowest base price is already like US$0.31, it's already below benchmark, right. So I think that happened before the new policy.

After the new policy with such a huge chunk of this decrease of the market price, I think that we'll further accelerate grid parity market in China and the government will be very happy to see..

Okay. That's helpful. Maybe one….

Just one – Hi, Brian, this is Sebastian. And there's a one part of the demand we haven't discussed yet. This is the residential because as all we know that residential market is within the quota by the new policies, but in fact we already hear lots of rumors about the policy there maybe some new policies about the residential ones.

So we know that last year it's almost two gigawatt over residential projects, so still quite potential for this segment of demand..

Okay. That's helpful. Thank you for that. Just on grid parity, one last question on that.

What do you -- the RMB0.35 per kilowatt hour that's helpful from a benchmark perspective? What are you generally assuming is the crossover point for installation cost to get to those grid parity levels on large scale solar in China? And then what are the embedded returns you think that will entice developers to build on subsidized basis, whether unlevered or levered, any color that would be helpful?.

That would be a complicated question Brian, because the benchmark prices are different from different products. The RMB0.35 I meant – I just mentioned is from Qinghai province. Actually if you're looking to some Eastern Coast province the benchmark is even is over RMB0.40, so that varies a lot.

Second, regarding the returns or the [Indiscernible] price, I think that varies a lot as well because it depends on the land cost, connection cost et cetera, but in general we believe that the current or the last round of the Top Runner Program has successfully viewed our business model to prove that the grid parity market is there and it won't be that difficult to access..

Okay. Couple of questions on pricing from me and I'll pass it on, just maybe housekeeping.

What was the ASP average for Q1? And then we're sitting here in late June, so what's the assumption for Q2 on average ASP for the quarter and then second-half pricing?.

Brian, I think we do not disclose ASPs any more, but what we can see is the Q1 ASPs are slightly lower than Q4, very tiny changes, where I'd say single-digit even low single-digit percentage change. And the Q2 compared with Q1 will be another slight decrease again.

And for the second half ASPs, definitely it will decrease because the market price falls, but you'll see our cost is decreasing as well. So the margin looks better than the first half..

Okay. Maybe just one follow-up there. You have 80% booked. It sounds like with the prepayments and clarity on pricing, the 20% that's uncontracted today, I'm sure you're working on the coding activity for that.

How much lower are the quotes coming in on that on contract capacity after having digested the current state of the state in terms of supply demand and what real-time pricing is doing? Just curious how strong is the locked-in pricing relative to what you're seeing in the real time pricing level?.

I got your question. Let's say this. After this China new policy announcement we have seen the market price has been dropped approximately 15%. That's what we have seen. That's mainly from China.

And is that number helpful for you?.

Yes. That's helpful..

We are not coaching frequently now in China, because now we think the market definitely – the price -- it's not rationale, so we'll wait and see. We already had lots of orders on hand, so we'll keep our flexibility and see what happen in the second half of year until the market closed down. So that's our strategy. We are not in hurry..

Yes. You are not in a rush to lock in pricing. I guess on the flip side what we've seen in past downturns is that customers can be somewhat reluctant to step in when they think pricing can keep going lower than the whole catching or falling nice phenomenon.

Are you seeing customers waiting on placing new orders because they think they might be able to get better pricing the longer they weigh out?.

It really depends on their pipeline or their projects status, right? Some of them might have the flexibility to say to wait for another couple of weeks or even months, but some of them they may face it without of – they may face the pressure of this COD [ph] timing, construction schedule etcetera.

So they might have to make some decisions now or in the middle. That’s why we still see some of deals are happening in this market..

Okay. Thanks a lot guys. I’ll pass it on. Appreciate it..

Thank you..

Thank you, Brian..

Thank you, Brian. Your next question comes from Alex Liu from UBS. Your line is now open. Please go ahead..

Yes, thank you for taking my questions.

So I have two questions, first one is that about your exchange loss, so what’s your strategy now to offset potential movements in the currency and any chance there in the second half to recover some of the exchange loss? And the second question is about your view about the global demand, so what’s your estimate about the global demand this year especially for the emerging markets like India, Middle East? Thanks..

Sure. For the first question foreign currency exchange, and you know the first quarter particularly in January the RMB appreciated by 3% to 4% and we had around 50% but you know if you look at export 80% is overseas sales revenues. And we still get hit in the first quarter.

RMB has been depreciated a lot in the recent months, so we are expecting we will recognize a lot of gains from foreign currency transactions and we will continue to monitor foreign currency transactions and it’s good you know when RMB depreciated its good for both gross margin as well as the foreign currency gains.

And at the same time we have hedged some portions and based on our assessment for the currency movement..

For the second question we assumed in general this year, global demand were in place by a double digit property which grew 17 gigawatts the whole year for the overseas market..

Sorry – your shipment or the global demand. I mean, what’s your view on….

Global demand..

Okay, got it. Thank you..

Yes, so if the logic is – sorry the logic is to say that global demand and even China sales can decrease let’s say by 15 gigawatts, higher but new lower price will further accelerate or pull in some demand upon other emerging markets who were waiting for a low price reaching their targets previously. So that’s a kind of an offset, let’s say..

What’s your estimate about the India demand? And of course, based on your other growth from there..

Not only India. India is one of them, but lots of markets will do the same, because if they have their own budget waiting for the module price or the system cost they are reaching their target price..

Okay, thank you..

Did I answer your question?.

Yes. Thank you..

Thank you..

Thank you, Alex. As there are no more questions in queue, I would now like to hand the call back to your speaker today, Sebastian, please go ahead..

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

Ladies and gentlemen, that does conclude our conference for today. Thank you all for your participation. You may all now disconnect..