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JA Solar's Investments Impress, Competition Still a Risk
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On Jun 1, 2016, we updated a research report on JA Solar Holdings Co. Ltd. .
Based in Ningjin in the Hebei province of the People’s Republic of China, JA Solar manufactures high-performance solar products.
JA Solar caters to a geographically diversified, pan-continental customer base, spanning across Germany, Italy, the U.S., Spain, India, Korea, China and Japan, which helps to boost its top line. It is currently focused on working with local partners in the UK, Japan, South Africa and Latin America. Moreover, it plans to boost sales in the untapped markets of India, which is now targeting to produce nearly 175,000 megawatts (“MW”) of electricity through renewable sources by 2022, with solar energy alone comprising approximately 100,000 MW.
JA Solar makes continued investments in research and development (“R&D”) in order to improve the efficiency of solar cell conversion, which is reflected by the 1.4% year-over-year rise in the company’s R&D expenditure in the first quarter of 2016. Thanks to its technological innovations, the company has been able to manufacture high-quality, high-efficiency products at lower costs than most of its peers. Its recent shift in focus toward solar modules from cells is also paying off. Module shipments in first-quarter 2016 were up 57.4% to 909.4 MW. The figure represents 81.5% of the total shipment in the quarter.
On the flip side, demand for the company’s products depends largely on government incentives and subsidies. Any unfavorable policy would hurt the company’s financial performance.
Internationally too, the company’s sales may be dented by government policies adopted by various countries to protect their domestic solar markets. Policy changes in its principal markets – the U.S. and Europe – are a major cause of concern. For instance, the anti-dumping policies imposed by the U.S. could pose risks for JA Solar’s profitability. Also, the company witnessed a considerable drop in its shipments to Europe in first-quarter 2016 (down 5.6% from 22.6% in first-quarter 2015).
Nevertheless, the company has to face cut-throat competition from its domestic peers. Fierce competition between Chinese solar companies sometimes leaves them with a feeble margin.
Zacks Rank & Key Picks
JA Solar presently holds a Zacks Rank #3 (Hold). Better-ranked stocks in the solar sector include ReneSola Ltd. (SOL - Free Report) , JinkoSolar Holding Co., Ltd. (JKS - Free Report) and Yingli Green Energy Holding Co. Ltd. . While ReneSola sports a Zacks Rank #1 (Strong Buy), both JinkoSolar and Yingli Green Energy carry a Zacks Rank #2 (Buy).
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JA Solar's Investments Impress, Competition Still a Risk
On Jun 1, 2016, we updated a research report on JA Solar Holdings Co. Ltd. .
Based in Ningjin in the Hebei province of the People’s Republic of China, JA Solar manufactures high-performance solar products.
JA Solar caters to a geographically diversified, pan-continental customer base, spanning across Germany, Italy, the U.S., Spain, India, Korea, China and Japan, which helps to boost its top line. It is currently focused on working with local partners in the UK, Japan, South Africa and Latin America. Moreover, it plans to boost sales in the untapped markets of India, which is now targeting to produce nearly 175,000 megawatts (“MW”) of electricity through renewable sources by 2022, with solar energy alone comprising approximately 100,000 MW.
JA Solar makes continued investments in research and development (“R&D”) in order to improve the efficiency of solar cell conversion, which is reflected by the 1.4% year-over-year rise in the company’s R&D expenditure in the first quarter of 2016. Thanks to its technological innovations, the company has been able to manufacture high-quality, high-efficiency products at lower costs than most of its peers. Its recent shift in focus toward solar modules from cells is also paying off. Module shipments in first-quarter 2016 were up 57.4% to 909.4 MW. The figure represents 81.5% of the total shipment in the quarter.
On the flip side, demand for the company’s products depends largely on government incentives and subsidies. Any unfavorable policy would hurt the company’s financial performance.
Internationally too, the company’s sales may be dented by government policies adopted by various countries to protect their domestic solar markets. Policy changes in its principal markets – the U.S. and Europe – are a major cause of concern. For instance, the anti-dumping policies imposed by the U.S. could pose risks for JA Solar’s profitability. Also, the company witnessed a considerable drop in its shipments to Europe in first-quarter 2016 (down 5.6% from 22.6% in first-quarter 2015).
Nevertheless, the company has to face cut-throat competition from its domestic peers. Fierce competition between Chinese solar companies sometimes leaves them with a feeble margin.
Zacks Rank & Key Picks
JA Solar presently holds a Zacks Rank #3 (Hold). Better-ranked stocks in the solar sector include ReneSola Ltd. (SOL - Free Report) , JinkoSolar Holding Co., Ltd. (JKS - Free Report) and Yingli Green Energy Holding Co. Ltd. . While ReneSola sports a Zacks Rank #1 (Strong Buy), both JinkoSolar and Yingli Green Energy carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>