JA Solar Conference Call Highlights

JA Solar

reported its fourth quarter earnings on Monday. Shares of the company are up six percent. Below are some key highlights from its conference call: Performance Metrics: • Our third quarter results were quite satisfactory as the shipments revenue and the profitability accelerated ahead of general expectations. • We delivered record module shipments in the third quarter which exceeded our guidance. • Shipments grew nearly 60% year-over-year to 785 megawatts, and they were dominated by sales to Japan and China, each accounting for mid-30 percentages of our geographic mix. • The company reached a new milestone as we saw record shipments to the Japanese market during the quarter while our mono modules continued to dominate our product mix in Japan. • We see potential in our mounted modules for use in utility-scale projects. • We are quite optimistic about our prospects in Japan in 2015 as we expect sustainable demand from this market. • Our strong relationships with our customers continue to be competitive advantage for us in the region. • Our strategy for synergistic growth with these customers as being a major driver for us. • Now, within our high-efficiency, high-quality products and actually on the customer service, we are confident we can further expand our market leadership in Japan in 2015. • Module sales to China increased 96%, sequentially as the utility-scale projects land in China. • We expect demand in China to continue its momentum into Q4 and that we are seeing a healthy recovery in module pricing. • We have emerged as the top module brand in China and in fact a strong year ahead. • Turning to Europe, the weakness of the euro against the U.S. dollar has impacted the ASP in Europe, but it also closed the gap between EU and the international pricing, making our modules more competitive. • We were seeing strong demand from EU in particular UK, which will have a positive impact on our gross margin. • The last hurdle award was the single digit in our mix with very little growth. • Going forward, we expect to see emerging markets such as Chile, Brazil, Mexico, and the South Africa to play an increasing role in the global • solar market. • Our product mix shifted heavily to modules, which follows our strategy to higher-margin module sales. • Module shipments were 88% of total shipments. Still, ASP was flat sequentially and up year-over-year. • We may purchase our ADS from time to time on open market at the prevailing market prices. Total purchased amount would not exceed $90 million. • We believe this approach will facilitate value creation for our shareholders. Financial Metrics: • Our shipment growth was quite strong. • We shipped 785 megawatts, an increase over 57% year-over-year and 15% sequentially. • In line with our strategic direction to ship to higher-margin fields, our mix shift significantly to modules. • We shipped 694 megawatts of modules, an increase of 127% year-over-year and 56% sequentially. • Module were 88% of our total shipments for this quarter. • Sales shipments of 92-megawatt represented a decline of 53% year-over-year and 61% sequentially. • Our geographic mix reflected our focus on the strongest market worldwide. Japan was still our largest market at 36% total shipment, up 59% sequentially. • Domestic shipments surged to 35% of the total, up 55% sequentially and a 41% year-over-year.