JA Solar Holdings Co. Ltd.
) has entered into an agreement with an affiliate of China Power
Investment Corporation ("CPI") - CPI Huanghe Hydropower
Development Co. Ltd. - for the supply of solar modules.
JA SOLAR HOLDGS (JASO): Free Stock Analysis
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Per the deal, JA Solar will supply 96 megawatt (MW) of solar
modules to CPI Huanghe Hydropower, which are likely to be
utilized in two solar projects in China's Qinghai Province. The
company has already started deliveries of the modules and expects
to wrap it up by the end of this month.
Situated in Gonghe County in Qinghai's Hainan Autonomous
Prefecture, these two projects have a capacity of 320 MW and 200
MW, respectively. The first project is a hybrid hydro-solar power
station that is expected to be the biggest of its kind worldwide.
This station will work in collaboration with the existing
Longyangxia Hydro Power Station in order to boost uninterrupted
energy generation. Both projects are scheduled to begin
commercial operation by October.
JA Solar − the largest solar-cell producer by capacity - 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.
Last month, the company posted second quarter 2013 results.
Although JA Solar incurred a loss in the reported quarter, it
managed to cut its loss on a sequential as well as year-over-year
basis. 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.
JA Solar is also steadily expanding its customer base worldwide
in several geographic end markets including the U.S., Canada,
Italy, Japan, Australia and India. Europe accounted for 20% and
the Americas accounted for about 8% of its total shipments last
In the domestic field, JA Solar would stand to gain from 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
However, the U.S. Department of Commerce's (DOC) imposition of
tariffs on Chinese solar product manufacturers has impacted solar
players like JASO,
LDK Solar Co. Ltd.
Suntech Power Holdings Co. Ltd.
) among others. This action by the DOC is mainly to constrict
Chinese solar-products supply in the U.S. and encourage domestic
players to tap the growing renewable U.S. market.
Hence, weak demand and a global supply glut of wafer and module,
resulting in falling average selling prices are headline risks.
JA Solar has also registered declining revenues for seven
consecutive quarters now. In such a situation, we believe
domestic contracts, like the latest one, will bring some relief
to the company's growth prospects.
JA Solar Holdings Co. currently has a Zacks Rank #2 (Buy).
Another attractive stock in the solar space is
) sporting a Zacks Rank #1 (Strong Buy).