JA Solar Adds Weight to Its Pockets

Chinese solar-cell manufacturer JA Solar Holdings Company Ltd. (JASO - Analyst Report) bagged two three-year term loans of 620 million RMB ($90.9 million) from the Export-Import Bank of China at below the benchmark interest rate set by the People's Bank of China.

The infusion will strengthen the balance sheet apart from lowering the overall cost of capital of cash-rich JA Solar. The company at the end of the first quarter of 2009 had cash and cash equivalents of $249.2 million, and total credit facility worth $213.7 million as of Mar 31, out of which $76.1 million has been availed.

JA Solar is playing it right and in sharp contrast to its solar peers due to dried funding for solar project. However improved results in the second quarter from solar players such as SunPower Corporation (SPWRA - Snapshot Report) is shedding hopes of a solar recovery. With a full wallet, the company will find it easier to plan its next business move. JA Solar will release its second-quarter numbers on Aug 12. We reaffirm our BUY recommendation on JASO.