JA Solar Holdings Company Ltd. (JASO): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

Summary:
JA Solar Holdings Co. Ltd. reported its first quarterly profit in fourth quarter 2013 following ten quarters of reporting in the red. The comeback indicates the recovery in the solar industry accompanied with a surge in solar project installations in China. The company is one of the most cost-efficient solar producers with a geographically-diversified customer base and silicon wafer supply agreements. Positive factors include higher shipments, improving operating efficiencies and higher conversion efficiency. On the flip side, the tepid module demand in Europe, rising competition, wafer dependency, the financial stability of its customers and the oversupply of solar cells may adversely impact performance over the near term. Therefore, we prefer to remain on the sidelines for now.

Overview:

JA Solar Holdings Company Ltd. JASO, based in Ningjin of the Hebei province in the People's Republic of China, manufactures high-performance solar cells. The company is a recent start-up entity, established in May 2005, which commenced manufacturing operations in April 2006. JA Solar was incorporated in July 2006 with its initial public offering on February 7, 2007.

JA Solar conducts its operations through its subsidiaries, JingAo Solar Company Ltd. (JA Hebei), Shanghai JA Solar PV Technology Company Ltd. (JA Zhabei) and JA Solar Technology Yangzhou Company, Ltd. (JA Yangzhou). JA Solar's solar cell manufacturing facilities are located in Ningjin, Hebei Province and Yangzhou, Jiangsu Province. Its solar module manufacturing facilities are located in Fengxian, Shanghai and silicon wafer manufacturing facilities are located in Lianyungang, Jiangsu Province. Apart from that the company plans to establish a new vertically-integrated manufacturing center in Hefei, China, to further expand its production capacity.

In Oct 2011, the company established JA Solar Investment China Co., Ltd. for general corporate and investment purposes. In Nov 2011, it completed the acquisition of 100% equity interest in Silver Age, which was 70% owned by Jinglong BVI, the company's largest shareholder, and 30% owned by an independent third party. Silver Age owns Solar Silicon Valley which is the leading producer of mono-crystalline silicon wafer based in Yanjiao, Hebei Province, China.

JA Solar's principal customers are solar module manufacturers, who assemble and integrate its products into modules and systems. The company sells primarily to customers in China, Europe and the U.S. The company has also entered into the new markets of Greece, Portugal, France, Italy and South Korea. The company follows a strategy of long-term commitments with its vendors and suppliers.

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