JA Solar's Shiny Growth Story

Cash-rich JA Solar Holdings Co., Ltd. (JASO), with an increasingly geographically diversified customer base, has one of the lowest cost structures among its peers. Going forward, improving production costs, coupled with ongoing capacity expansions, and committed supply of key raw materials, will continue to boost the growth story.

However, rising silicon wafer costs, tepid module demand in Europe, aftershocks of the Lehman bankruptcy and the company's high R&D expenses may affect ASPs [average selling prices] over the near-term. Accordingly, we maintain our BUY recommendation on JASO with a six-month target price of $3.25. Price appreciation to our near-term valuation target represents 25.5% upside potential.

JASO is based in Ningjin of the Hebei province in the People's Republic of China, and manufactures high-performance, monocrystalline solar cells using processing technologies. The company is a recent start-up entity, established in May 2005, and commenced manufacturing operations in April 2006.

Comments

[aquaculture:]

Good call.
JASO has a strategic relationship with GCL silicon, which by march 17 press release, has announced very agressive expansion plans, in part to meet increasing mainland, as well as international market, demand. Also low capex fy09.
GCL (Hongkong) is hiring qualified people everywhere like crazy..

Mar 24 04:37 PM

[oilsands:]

Interesting. JASO is an intriguing puzzle. Thanks to both the author and aquaculture.

Mar 25 12:30 PM