Renewable Energy Stock on Watch: JA Solar Holdings Co. Ltd. (JASO)
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    Stock Alert for JA Solar Holdings Co. Ltd. (JASO)

    JA Solar Holdings Co. Ltd. (JASO) is a manufacturer of high-performance solar power products. It sells its products to solar manufacturers worldwide, who then assemble and integrate solar cells into modules and systems that convert sunlight into electricity for residential, commercial, and utility-scale power generation. The Company’s leading-edge solar production facilities utilize the most advanced solar cell manufacturing equipment. Shanghai, China-based JASO has two world-class solar cell manufacturing facilities, one located in Ningjin, Hebei Province, and the other in Yangzhou, Jiangsu Province. By the end of 2011, the Company’s annual manufacturing capacity for solar cells reached 3 GW annually.

    Share Statistics (13-Jan-12)   FY












    Symbol JASO Revenue, CNY 3.78B 11.76B 211.1% 3.62B 2.47B -31.8%
    Current price $1.82 Gross marg. 22.3% 21.7% -2.7% 22.5% -4.3% -119.1%
    52wk Range: $1.21-$8.57 Oper. margin 16.8% -11.2%
    Avg Vol (3m): 4,313,000 Net margin -5.1% 14.9% -392.2% 14.2% -15.2% -207.0%
    Market Cap. 299.67M              
    Shares Outstanding 164.66M EPS, $ -1.12 10.72 -1057.1% 3.12 -2.28 -173.1%

    Source:, SEC Filings.

    Investment Highlights

    Shares of JASO skidded as much as 10% Friday, snapping a four-day winning streak.  The Chinese solar power products maker, along with the rest of the solar sector, were boosted earlier last week after investors welcomed an upbeat report on Germany’s solar market.

    Germany, which represents a major sales market of several sector bellwethers, installed 7.5 GW of solar power last year — topping the prior year’s record of 7.4 GW.  As reported by Reuters, the country’s solar market remained stable in 2011 compared with the prior year, suggesting demand for modules remains high despite large cuts in support for the sector over the past two years.

    Solar stocks were also lifted on news of stabilizing prices for the industry’s key raw material, polysilicon.  Avian Securities analyst Mark Bachman said polysilicon was selling for about $30 a kilogram on the spot market after bottoming at around $24. Bachman, however, noted that solar cell and panel prices are still dropping and that more companies will need to go out of business this year to ease the industry’s massive oversupply.

    JASO shares have gained 38.6% in the last five days and 28.0% in the last month.  Year-to-date, the stock is down 76.1%.

    Recent Company News

    Late in December, JASO announced it has inked a deal with Solarhybrid AG, a Germany-based project developer and general contractor for turn-key utility-scale solar power projects, to supply 19 MW of solar modules to Solarhybrid’s Allstedt I solar power plant in Halle, Germany.

    JASO, which is the exclusive solar module supplier to the project, expects total module shipments to Solarhybrid to reach about 40 MW in 2011, including 19 MW of modules for the Allstedt I project.

    “Following a stringent supplier selection process, we are very pleased to choose JA Solar, a proven provider of industry leading solar products, as our partner for this project,” commented Tom Schroder, CEO of Solarhybrid.  “JA Solar’s cost-effective, high-efficiency solutions will enable us to maximize the return on investment in this project. With JA Solar’s support, we look forward to opening the Allstedt I power plant by end of this year.”

    Also last month, JASO said its high efficiency Maple solar cells have reached conversion efficiency levels of 18.5% in large volume production. The average conversion efficiency recorded for Maple cells in mass production is 18%, which is a new record for the Company and substantially higher than the industry standard average conversion efficiency for multi-crystalline solar cells of approximately 16.8%.

    Shares of JASO dropped $0.20, or 9.90%, to close Friday’s trade at $1.82.  Over the last 52 weeks, the stock has ranged from a low of $1.21 to a high of $8.57.  It is currently above  its 50-day moving average of $1.50 and below its 200-day moving average of $2.76.


    Financial Summary

    JASO reported revenue of RMB 2.5 billion ($388.0 million) in the third quarter of 2011, a decrease of 7.3% compared to RMB 2.7 billion ($418.5 million) in the second quarter of 2011, and a decrease of 31.6% from RMB 3.6 billion ($567.4 million) reported in the third quarter of 2010. The Company’s total shipments during the period were 445 MW, compared with shipments of 401 MW in the second quarter of 2011, representing a sequential increase of 11.0%. Compared with the same period last year, shipments grew 6.5% from 418 MW.

    The Company posted an operating loss of RMB 276.3 million ($43.3 million) in the third quarter, compared with operating loss of RMB 202.0 million ($31.7 million) in the second quarter of 2011 and operating income of RMB 669.3 million ($104.9 million) in the third quarter of 2010.

    Loss per diluted ADS in the third quarter of 2011 was RMB 2.28 ($0.36), compared with loss per diluted ADS of RMB 1.39 ($0.22) in the second quarter of 2011 and earnings per diluted ADS of RMB 3.14 ($0.49) in the third quarter of 2010.

    JASO had cash and cash equivalents of RMB 3.2 billion ($506.5 million), and total working capital of RMB 4.7 billion ($734.9 million) at September 30, 2011. Total long term and short term borrowings were RMB 4.5 billion ($703.9 million) and the face value of outstanding convertible bonds due 2013 was RMB 1.5 billion ($228.2 million) at September 30, 2011.


    Financial Strength (13-Jan-12)




    S&P 500

    Quick Ratio (MRQ) 1.20 0.86 0.76
    Current Ratio (MRQ) 1.71 1.13 1.12
    LT Debt to Equity (MRQ) 163.10 16.06 109.27
    Total Debt to Equity (MRQ) 172.46 20.83 148.45
    Interest Coverage (TTM) 1.91 4.45 25.95

    Source:, SEC Filings.

    Technical Analysis


    JASO is presently near its upper Bollinger Band. This suggests that it is at a high level relative to recent action.

    The MACD for JASO currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Jan13-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    Hanwha SolarOne Co. Ltd. HSOL 2.00 151.44M n/a n/a 0.15 0.19
    Suntech Power  Holdings Co. Ltd. STP 3.16 538.04M n/a n/a 0.18 0.22
    Semiconductor – Specialized Median       12.63 n/a 1.47 n/a
    JA Solar Holdings Co. Ltd. JASO 2.02 301.32M n/a n/a 0.18 0.23

    Source: Thomson Financial

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