JA Solar Poised to Gain from Buoyant Solar Market in China - Analyst Blog

On Jun 26, we have issued an updated research report on solar cell manufacturer JA Solar Holdings Company Ltd. JASO. We believe JA Solar to outperform on the back of expansion of its geographical footprint, steadfast focus on enhancing research and development expertise and favorable renewable climate in the Chinese market.

The company plans to increase its presence in the downstream solar market by working with its partners in Japan, U.K., South Africa and Latin America. JA Solar has 200 megawatt MW of utility-scale projects lined up for completion in 2014 with development process on the first 100 MW projects advancing well.

To tackle the fresh import duties slapped by the U.S., the Chinese government is concentrating on developing its indigenous solar market via investing in solar power plants. The solar photovoltaic (PV) market in China is rapidly evolving driven by encouraging policy environment, which aims to meet the growing energy needs from green sources.

In 2013, the country's solar PV market witnessed impressive growth. China added an astounding 12 gigawatts (GW) of solar capacity, up from 3 GWs in 2012.

JA Solar, a Zacks Rank #1 (Strong Buy) stock, performed remarkably in the first quarter of 2014. Both its top and bottom lines widely beat the Zacks Consensus Estimates. On a year-over-year basis, JA Solar also recorded healthy growth thanks to increased sales and higher shipments.  

Meanwhile, JA Solar's constant technological innovation efforts will lead to cutting-edge solar product offerings. This will enable the company to capture a sizeable market share in the fiercely competitive solar space. JA Solar's prized PERCIUM and RECIUM types have high-conversion efficiency relative to the conventional solar modules.

Going ahead, we expect JA Solar to benefit from the Chinese government's plan to boost installed solar capacity to 70 GW by 2017. In addition, worldwide PV market will likely peak in 2014 with solar installations set to witness double-digit growth as per a media report.

China will be the biggest contributor to the growth as solar consumption will increase by 35% in 2014 as per Energy Information Administration report. So, better days lie ahead for JA Solar keeping in mind the bullish solar market fundamentals.

Other solar players poised to profit from the Chinese government's focus on renewable power generation include Yingli Green Energy Holding Company Ltd. YGE, JinkoSolar Holding Co., Ltd. JKS and Trina Solar Limited TSL.

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