Operator: Okay. The next question comes from Philip Shen with Roth MKM. Please go ahead.
Philip Shen: Hi, everyone. Thank you for taking my questions. First one is a follow-up on Brian’s question regarding Southeast Asia AD/CVD tariffs that could be coming later this year. So I was wondering if you could talk about how you plan on managing the retroactive tariff risk. So I think you guys talked about increasing your shipments to the U.S. market or certainly having a high mix to the U.S. through 2024. Can you share how much of your shipment volume in ’24 could go to the U.S.? And then how do you plan on managing that retroactive risk that could be as early as May or July? Thanks.
Gener Miao: Yeah. For — firstly, for the volume-wise, we still stick to our previous plan that we are not intentionally increase or decrease our shipments in the U.S. because of the recent AD/CVD petitions. So that’s already within our — within the plan of this year. So if it’s definitely — because you know what’s happening in the last two years in U.S. to Jinko, that’s why this year’s total shipment numbers or the ratio of the U.S. market definitely will be higher than last year, that’s why we’re just saying that. And for this tariff risk retroactive or number-wise, we don’t have mature solutions right now, that’s why we are still — as I just answered Brian’s question, we are still talking to the lawyers and the customer to see what could be the best solutions. Right now, at least, I’m not aware of any good solutions on that.
Philip Shen: Got it. And how – thank you, Gener. How are your contracts structured? Meaning, oftentimes, there’s a change of law provision that may put the risk on to the customer. But does it cover tariffs? And so do you have the provisions in all your U.S. contracts so that the risk is on the customer or in this case, do you believe that the risk of retroactive tariffs may fall into your camp? Thanks.
Gener Miao: I don’t think we can disclose the details of the contract, but definitely, customers feel the risk as well. So even there are some language, which give the cash risk to the customer end. But definitely, the customer side has this the basic economics of the project financing, right? If it does go beyond a certain threshold, definitely, the project will not happen or as planned. That’s why we have to go through all those details with our customers, with their lawyers and even their financing providers to find out the best mutual solution for all parties. It’s not that easy to take one case — one solution for all.
Philip Shen: Okay. All right. Thank you, Gener. One last question on the U.S. market. What do you think is the amount of channel inventory in the U.S. We’ve seen a lot of shipments to the tune of about 5 gigawatts a month coming to the U.S. over the past year. Do you think there’s as much as 1.5 years of module inventory in the U.S. or do you think it’s much lower? Can you help us understand what you see? Thanks.
Gener Miao: We have reasons now saying that there’s, let’s say, oversupply in the U.S. market, even some players, either downstream or upstream try to get more modules before just not AD/CVD, but besides undeserved, right, so before any circa. We heard, we read the notes, but from our end, we have not been able to verify that directly from the customers or from some of our peers right now. But definitely, if we look into the numbers available in the market or some market energy report, we have seen a massive number of modules or solar product has been shipped to U.S. But the grid connection numbers might not support that big number. Definitely, we have the same question as you have right now.
Philip Shen: Okay. Thanks, Gener. Last question here for me on the fire that you guys disclosed over the weekend. Can you talk about the impact Shanxi is supposedly a key part of your margin, right? So you did say that there would be an impact in ’24. Can you quantify in any way? When do you think that facility could come back online, how destructive was the fire? Thanks.
Charlie Cao: Philip, the impact is still being evaluated. But Shanxi super factories, remember this year, we do two phases. Phase I is 14 gigawatts, Phase II is another 14 gigawatts. And the second phase, Phase II will stick to the original plan and are expected to start operation in Q3 for the Phase II and fully operational in early of Q4 this year. But we are talking about the Phase I, Phase I, the fire has the impact on the cell capacity, the 14 gigawatts, and we expect the cell capacity will be fully operational by the end of this year. And this is our original plan is by the end of the middle year. So it’s going to have some kind of impact two quarters roughly and estimated and 3 gigawatts to 5 gigawatts. So the impact is not significant.
It’s very — not significant impact for the cell. And so for the operational side, we have adjust our productions throughout the global facilities to minimize the impact to our customers. And for the cost side and the impact of the operation, we think it’s not significant However, for the losses of the fire is still evaluating, but the equipment is fully, get the insurance from the big insurance companies in China, and we’re working on it.
Philip Shen: Got it. Thank you very much for the color. I’ll pass it on.
Charlie Cao: Thank you.
Operator: Next question comes from Wade Wu (ph) with Jefferies. Please go ahead.
Alan Lau: Hello. Sorry, can you hear me?
Operator: Yes, your line is now open.
Alan Lau: Hey. This is Alan Lau from Jefferies. So, thanks management for taking my questions. So first of all, I would like to ask a follow-up the question from Philip on the — basically, how many — or what is the percentage of the contracts you have signed at least have the language that is passing through the potential liability of the delays in AD/CVD. The background of this question is because some of the peers suffered a lot last year, when they have procured high-priced polysilicon. And then later on, when they failed to deliver the shipment, they even have to pay penalties as per those contracts. So I wonder if those language is already there. And it’s only a matter of working with your clients to solve the problem? And is there any potential liability in delivering the obligations.
Gener Miao: Yeah. So again, I don’t think we can disclose that level of detail. But definitely, we are case-by-case working with customers on this AD/CVD risk as we always do, right? So we’ve got a lot of support from the customers regarding what has happened in the U.S. market in the last two years’ time. So definitely, we appreciate the support, and we are carrying that love for the future long-term partnership with most of our customers. That’s why we never want to end up with a lost, lost solution. So even if there’s a risk, we definitely go ahead with the customer to look into the solutions together. That’s why we can maintain our leadership in many markets, right?
