JA Solar Holdings Co. Ltd.
) announced a loss of 58 cents per American Depositary Share
(ADS) in the second quarter of 2013, narrower than the Zacks
Consensus Estimate of a loss of 62 cents. The company also
managed to cut its loss on a sequential as well as year-over-year
basis. Loss per ADS was $1.91 in the year-ago period and 86 cents
in the sequentially preceding quarter.
The narrower loss came on the heels of higher-than-expected
shipments. Strong demand in the high average selling price market
of Japan led to the growth. During the quarter, the company also
diversified its geographical presence. Europe accounted for 20%
and the Americas accounted for about 8% of its total shipments
JA Solar's revenues in the reported quarter were $258.1 million,
comfortably ahead of the Zacks Consensus Estimate of $252.0
million. However, revenues decreased 12.3% from $294.4 million in
the second quarter of 2012, and 5.5% from $273.3 million in the
first quarter of 2013.
Gross profit was $21.0 million, compared with $14.0 million in
the year-earlier period and $16.3 million in the first quarter of
Total operating expenses declined 33.0% year over year and 12.6%
sequentially to $26.4 million.
Total shipments in the reported quarter were 463.7 megawatt (MW),
comfortably exceeding the high end of the company's forecast of
410 MW to 430 MW. Shipments climbed 11.0% from 417.8 MW shipped
in the year-ago period, and 4.7% from 442.7 MW in the first
quarter of 2013.
Japan is the main revenue driver for the company despite
intensifying competition. JA Solar also remains proactive in the
domestic market with the Chinese government boosting its target
to 35 gigawatt (GW) of cumulative solar installations by 2015.
The company has also made major progress in accessing new markets
like Thailand and Australia.
At the end of the reported quarter, JA Solar had a cash balance
of $354.8 million with $111.5 million of total working capital.
Total long-term bank borrowings were $576.8 million, of which
$328.0 million were due in one year.
JA Solar expects third quarter 2013 deliveries between 450 MW and
470 MW. For 2013, the company reaffirmed its total cell and
module shipments of 1.7 GW to 1.9 GW.
JA Solar is one of the most cost-efficient solar producers in the
world, with a geographically diverse customer base as well as
silicon wafer supply agreements in place to feed its production.
Positive factors include ongoing expansion programs, improving
operating efficiencies, and higher conversion efficiency. JA
Solar is steadily expanding its customer base worldwide in
several geographic end markets including the U.S., Canada, Italy,
Japan, Australia, China and India.
However, Chinese solar product manufacturers, like JASO,
LDK Solar Co. Ltd.
Suntech Power Holdings Co. Ltd.
), are facing the brunt of U.S. anti-dumping duties. The U.S.
Department of Commerce (DOC) imposed these tariffs to tighten
Chinese solar-products supply in the U.S. and encourage domestic
players to tap the growing renewable U.S. market. Given the
situation, we expect domestic contract to bring some relief to
the company's growth prospects.
Recently, JA Solar announced plans to develop three solar power
projects in eastern China's Hebei province. Located in Xingtai
City's Lincheng, Neiqiu and Xingtai counties, these projects will
have a capacity of 300 megawatt (MW) in total. The company has
already won approval for the first 50 MW in the Lincheng County
project. The company expects to receive development rights for
Neiqiu and Xingtai counties by the end of this year. China aims
to double its generating capacity by 2030, with half of all new
plants having renewable sources of power.
Shanghai, China-based JA Solar Holdings Co. currently has a Zacks
Rank #3 (Hold). A promising company in the space,
) looks attractive with a Zacks Rank #1 (Strong Buy).
JA SOLAR HOLDGS (JASO): Free Stock Analysis
LDK SOLAR CO (LDK): Free Stock Analysis
SUNPOWER CORP-A (SPWR): Free Stock Analysis
SUNTECH PWR HLD (STP): Free Stock Analysis
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