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JA Solar Exceeds Shipment Target

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Solar products manufacturer JA Solar Holdings Co. Ltd (JASO - Free Report) announced its solar products shipment in the fourth quarter 2012 will exceed the prior projection. Shipment for the quarter is now expected to range between 480 MW and 500 MW, up from the prior guidance of 380 MW and 420 MW.

JASO’s agreement with China Three Gorges New Energy Corporation (CTGNE) to supply 40 MW of modules almost at the end of 2012 helped the solar module maker to surpass its earlier shipment targets.                            

Full year solar product shipment will also follow the quarterly trend. The current expectation is between 1.68 GW and 1.70 GW, higher than the prior forecast of 1.55 GW and 1.65 GW.

Better-than-expected shipment of JA Solar’s products in 2012 speaks of its high quality and high performance modules. 2012 shipment volumes were not impacted by the U.S. Department of Commerce’s (DOC) decision to impose antidumping duty of 25.96% and a countervailing duty of 15.24% on solar cells manufactured in China.

We believe the imposition of these duties will make solar cells costlier in the U.S. and JASO will have to face steep competition from U.S. producers. If imposition of duties lowers US demand due to increase in product prices, JA Solar might have to explore new markets in Africa, the Middle East and Europe.

Surprisingly JASO made a good start to 2013, by delivering 9.5 MW of PV modules to the Volkswagen Solar Park, adjacent to the Volkswagen manufacturing plant at Chattanooga, Tennessee, U.S.

Can JASO sustain its strong shipment volumes through 2013? In the near term it appears the company will find it difficult to match 2012 levels, as economic uncertainty in Europe lingers and the tax in U.S. will take a toll on demand.  

JA Solar Holdings currently has a Zacks Rank #4 (Sell). We presently prefer North America based solar operators like Canadian Solar Inc. (CSIQ - Free Report) , First Solar Inc. (FSLR - Free Report) and SolarCity Corporation , all presently having a Zacks Rank #3 (Hold).

Based in Shanghai, The People’s Republic of China, JA Solar Holdings Co., Ltd. is a manufacturer of high-performance solar power products and sells its products worldwide to solar manufacturers.

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