Back to top

Analyst Blog

JA Solar Holdings Co., Ltd. (JASO - Analyst Report) announced the beginning of the production of its 5-inch highly effective monocrystalline modules. The production will take place on a massive scale. The 72-cell modules have power output of 210 megawatt ("MW"), which can be scaled up to 215 MW.

This makes JA Solar the first photovoltaic ("PV") manufacturing entity to accomplish standard output level of 210 MW from the monocrystalline frame.

In comparison to other models, the monocrystalline modules generate 3% more power annually, which in turn leads to 2% cost savings in terms of transportation, space and materials.

The company has been involved in such large-scale production activities. Previously, during November 2012, the company initiated the production of the then newly launched 6-inch full-square monocrystalline modules.

Characteristically, monocrystalline modules have high solar energy conversion rate and are relatively lower priced with an unmatched production rate, which makes it an attractive choice for solar energy producers in the fast growing renewable energy market.

JA Solar’s engagement in sizeable PV production activities will complement its growth opportunities given the Chinese government’s plans of increasing renewable share in the energy consumption to 11.4% by 2015. This represents a 3.1% surge from the 2010 figures. Additionally, the government proposed offering of subsidies to solar projects and free grid connection to PV distribution programs is another factor that will work in favor of JA Solar.

We believe the decision of US government to impose an anti-dumping duty of 25.96% and a countervailing duty of 15.24% on Chinese panels will severely impact the future prospects, as U.S. is a prime export destination for the company. This will more than offset the company’s domestic gains. Furthermore, the JA Solar’s prospects in Europe look dull owing to the ongoing debt crisis.

The negative impact is adequately reflected in the Zacks Consensus Estimate which for the last quarter of 2012 fell significantly by 121.25% to a loss of $1.33 per share and will linger in the subsequent first quarter 2013 with a 26.67% decline to a loss of $1.27 per share. With both estimates falling, the company currently retains a Zacks Rank #4 (Sell).

However, in contrast to JA Solar, FirstSolar Inc. (FSLR - Analyst Report), a Zacks Rank #3 (Hold) operator is expected to do well given its recent agreement with Intermolecular Inc. (IMI - Snapshot Report). The collaborative project entails improvement in the conversion efficiency of First Solar's cadmium telluride ("CdTe") solar cell technology. This is a less expensive option than the panels manufactured from crystalline silicon.

With a market capitalization of $213.86 million, Shanghai-based JA Solar Holdings Co., Ltd. together with its subsidiaries engages in the development, production, marketing, and sale of photovoltaic solar cells and solar power products that convert sunlight into electricity worldwide.

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