Back to top

Analyst Blog

JA Solar Holdings Company Ltd. (JASO - Analyst Report) 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.

JA Solar – the largest solar-cell producer by capacity – has already attained 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.

JA Solar caters to a geographically diversified pan-continental customer base, which spans Germany, Italy, the U.S., Spain, India, Korea, China and Japan. The company also effectively uses its locational advantage in China, with Chinese low-cost solar module manufacturers contributing a substantial portion of its revenues.

Chinese solar product manufacturers, like JASO, LDK Solar Co. Ltd. and Suntech Power Holdings Co. Ltd. , are facing the impact of anti-dumping duties being imposed in the U.S. The U.S. Department of Commerce (DOC) rolled out these tariffs to tighten the Chinese solar-products supply in the U.S. and encourage domestic players to tap the growing renewable U.S. market.

U.S. solar markets are gradually becoming less lucrative for the Chinese solar module manufacturers. The company also saw declining revenues for six consecutive quarters due to poor demand and a global supply glut of wafer and module that resulted in falling average selling prices.

In such a backdrop, we expect domestic contract to bring some relief to the company’s growth prospects.

With global demand for renewable energy growing due to its clean nature, increasing prices of fossil-fuels and growing awareness among the masses regarding its benefits, utility providers are trying to shift their mode of power generating operations to wind, solar and water from coal, oil and natural gas. China aims to double its generating capacity by 2030, with half of all new plants having renewable sources of power.

JA Solar is scheduled to reports its second quarter 2013 results on Aug 29, and expects its second quarter deliveries to exceed its projected deliveries of 410 MW to 430 MW. It is worth mentioning that during the first quarter, JA Solar managed to narrow the loss on a sequential basis backed by strong shipments that also exceeded the company’s forecast.

Shanghai, China-based JA Solar Holdings Co. currently has a Zacks Rank #3 (Hold). A promising company in the space, SunPower Corp. (SPWR - Analyst Report) looks attractive with a Zacks Rank #1 (Strong Buy).
 

Please login to Zacks.com or register to post a comment.