Chinese solar power products manufacturer
JA Solar Holdings Co., Ltd.
) share price surged 7.8% to $10.05 on Apr 14, 2014 from the
previous day's closing as it expects higher shipments in the
first quarter 2014. The company is expected to report the final
results in the first two weeks of May, 2014.
CANADIAN SOLAR (CSIQ): Free Stock Analysis
JA SOLAR HOLDGS (JASO): Free Stock Analysis
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JA Solar now expects first-quarter 2014 total shipment volume to
increase to 620 megawatt (MW) from the previous guidance of
580-610 MW provided during fourth-quarter 2013 earnings call. The
current estimate is also substantially higher than the prior-year
figure of 442.7 MW. However, quarterly shipment guidance is down
6.9% sequentially primarily due to slackness in the Chinese
demand as a result of seasonality.
In addition, JA Solar reaffirmed cell and module shipments
guidance for 2014. The company expects its cell and module
shipments in the range of 2.7 gigawatts (GW) to 2.9 GW, which is
up from 2.1 GW in 2013. An increase in shipments from Latin
America and the Middle East is expected to lead to the upswing in
shipment volume projection.
Also, JA Solar expects its quarterly gross margin to improve from
fourth-quarter 2013 level of 15.5%. A steady effort towards
cost-containment initiatives and strong shipment volume are
expected to play an important role for the surge in gross margin.
We note that JA Solar is progressing well on its utility-scale
solar projects, where it acts as an Engineering, Procurement and
Construction contractor. The company caters to a geographically
diversified customer base, spread across Asia, Europe, Africa,
and North and Latin America.
It is evident from past records that JA Solar has a strong order
book and wins contracts from both domestic as well as
international clients at regular intervals. In Mar 2014, the
company inked an agreement with U.K.-based large-scale renewable
project developer British Solar Renewables to deliver 7.8 MW of
high-efficiency full square mono solar modules.
We believe that strong solar product demand from Japan will act
as an important driver for increase in shipment. Moreover,
utilization of renewable energy is gradually increasing in
several South American countries including Chile, Guatemala and
Panama, which is expected to boost JA Solar's order book.
JA Solar currently has a Zacks Rank #3 (Hold). However, some
better-ranked stocks in the same industry include
Canadian Solar Inc.
JinkoSolar Holding Co., Ltd.
). While Canadian Solar and ReneSola hold a Zacks Rank #1 (Strong
Buy), JinkoSolar carries a Zacks Rank #2 (Buy).