Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

JA Solar Holdings, Co., Ltd. (NASDAQ:JASO)

Q2 2013 Earnings Conference Call

August 29, 2013, 08:00 AM ET

Executives

Nick Beswick - Brunswick Group, Investor Relations

Jian Xie - Chief Operating Officer

Bill Chen - Vice President of Strategic Development

Analysts

Brandon Heiken - Credit Suisse

Edwin Mok - Needham & Company

Pranab Sharma - Daiwa Capital Markets

Emily Liu - Arete Research Services LLP

Paul Strigler - Esplanade Capital

Operator

Hello and thank you for standing by for JA Solar’s Second Quarter 2013 Earnings Conference Call. At this time all participants are in a listen-only mode. After management’s prepared remarks there will be a question-and-answer session. Today’s conference is being recorded. If you have any objections you may disconnect at this time.

I would now like to turn the call over to your host for today's conference, Nick Beswick of Brunswick Group. Thank you.

Nick Beswick

Thank you. Welcome to JA Solar’s second quarter 2013 earnings conference call. Joining us from the company today are Mr. Jian Xie, COO; Mr. Min Cao, CFO; and Mr. Bill Chen, VP of Strategic Development.

As stated in the press release the simplified translation of CNY into U.S. dollars, which is set at RMB6.1374 to US dollar is made solely for the convenience of the audience. References to dollars are the lawful currency of the USA. The press release published today provides detailed financial tables for the conversion from CNY to USD.

On this call Mr. Xie will begin with an overview of the company's Q2 2013 results covering business and market developments and outlook. Following that, Mr. Chen will provide details of our technological progress and financial performance. After the prepared remarks we will open up for questions for the remainder of the call. We expect the entire call to last approximately one hour.

Before we begin the formal remarks, I would like to remind you that certain statements on today’s call, including statements regarding expected future financial and industry growth are forward-looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially. These statements are made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

Factors that could cause actual results to differ include general, business and economic conditions in the solar industry; governmental support for the development of solar power; future shortage or availability of the supply of high purity silicon; demand for end-user products by consumers and inventory levels of such products in the supply chain; changes in demand from significant customers; changes in demand for our major markets; changes in product mix, capacity utilization, level of competition, pricing pressures and declines in average selling prices; delays in the introduction of new product lines; continued success in technological innovations; shortage in supply of raw materials; availability of financing; exchange rate fluctuation; litigation and other risks as described in the company’s SEC filings, including its annual report on Form 20-F filed with the SEC.

Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results. You should not place undue reliance on these forward-looking statements. All information provided on today’s conference call speaks as of today’s date unless otherwise stated and the company undertakes no duty to update such information except as required under applicable law.

I would now like to hand the call over to Mr. Jian Xie.

Jian Xie

Thank you Nick and thanks to everyone for joining us for this call. Q2 was an encouraging quarter for JA Solar despite the regulatory uncertainty in Europe. All our shipments exceeded our expectations, thanks to an improved macro environment and the success of our efforts to penetrate to a wider variety of solar market. We also expanded margins, thanks to our continued efforts to reduce cost and the more stable pricing environment.

In addition we’ve made good progress in the U.S. and maintained the momentum we’ve been building in the emerging solar markets. JA Solar’s product offering is well suited to its current market dynamics. Our high efficiency products, product range and a bankable brand mean that we are one of the few players that can meet the stringent demand of today's solar customers.

In terms of our operating highlights for Q2 total shipments were 463.7 megawatt which is above the high end of our previous guidance of 430 megawatt. This was driven by our strong performance across key markets, particularly in Japan, Europe and in U.S.

Gross margin expanded to 8.1% in the quarter as a result of our successful cost reduction efforts and the improved pricing environment. As we mentioned last quarter, we have prioritized building a strong position in high ASP markets and our successful penetration of the Japanese market had a positive impact on our margins.

Operating cash flow was positive US$82 million, thanks to our stringent management, our working capital particularly accounts receivables. We also continue to maintain a solid balance sheet. We paid off our outstanding convertible notes back in May and the new financing that we recently closed has allowed us to improve the efficiency of our working capital structure. So we are in a good position to fund our working capital needs and to expand further into project development. We’ll discuss this a bit more later on.

The market environment improved substantially in the second quarter. Across key markets, we are seeing much greater regulatory stability and a more favorable pricing environment. Europe accounted for 20% of our total shipments in Q2 in spite of regulatory uncertainty there. We are pleased that the Chinese and the European regulators have now reached a resolution on the price and volume of the product imports from China and avoid a potential tariff. Aside from the real impact on margins this should bring a number of benefits.

Firstly, the pricing undertaking does not distinguish between monocrystalline and the multicrystalline. So we expect customers to favor a more powerful mono products given JA Solar's strength in mono this should work to our advantage.

Secondly we expected a resolution to boost demand for our modules from new customers and the demand for our sales from China and EU best module manufacturers. And lastly the removal of market uncertainty should ease bank’s concerns and improved financing environment. With greater visibility this brings, we expect Europe to continue to play an important role in our revenue mix going forward.

We kept up our positive momentum in Japan as well. In spite of increasing competition in this fast growing market the JA Solar brand is particularly strong here and the customers continue to favor our high efficiency product offerings over our competitors. Japan was once again the largest market for us, accounting for over 36% of our module shipments. The pricing situation in Japan and our strong position there have played an important role in our improved margin performance over the last couple of quarters.

China is another region where we were seeing encouraging developments. The state council announced a series of incentive guidelines to develop the domestic PV market setting a target of 35 gigawatts of cumulative installation by 2015. China made up about 26 of our module and module tolling business in Q2 and we expect these new policies to create further opportunities for us given our strong presence in our home country.

We are looking for China to account for 20% to 30% of shipment for the full year as project construction is generally concentrated in the third and the fourth quarters. We also made good ground in the Americas this quarter. A particular highlight was the increase in our module sales in the United States, a trend we see continuing in the long term.

Our continuous focus on product quality has helped us to build a strong dependable brand in the U.S. which in turn has boosted our product in the market. We recent announced a collaboration with Phoenix Solar and Silicon Ranch for a larger solar farm in Georgia, following on from our collaboration on larger solar farm in Tennessee.

We will be looking at further such opportunities in the near to midterm. We also made some progress in a number of emerging markets. We made breakthroughs in Australia and Thailand and we are seeing some interesting opportunities in regions such as South Africa, South America and the Middle East. And for PV cell sales places like Canada, South Korea and Indian all look promising. All these markets represent good opportunities for us to further diversify our revenue streams going forward.

I mentioned in my opening remarks that we are looking at opportunities to expand our involvement in project development. We have built up solid experience in engineering, procurement and extraction over the last few years. And that we are well positioned to transition into project development. This will enable us to capture more of the channel, diversify our solar solutions and capture higher profitability. It will also complement our core manufacturing business and provide greater visibility over medium term module shipments.

As a part of this we have obtained permits for two 50 megawatt projects in Dunhuang from the Gansu Provincial Development and Reform Commission. Construction of the first of this has already started.

And as we announced earlier this week we plan to develop three solar power projecting totaling 300 megawatt in Xingtai City in Hebei Province. We have obtained approval from the Hebei Provincial authorities to develop the first 50 megawatt of the Lincheng County project. And that we also signed framework agreement with local authorities pertaining to the project in Neiqiu and Xingtai counties. We expect to receive rights to develop such a project by the end of this year.

We are working on a number of other projects that are in early phases. We remain optimistic on the project development plans and expect to maintain a steady pace of growth over the long term.

Before I turn the call over to Mr. Chen, I want to quickly [list] those several measures we have taken to strengthen our balance sheet and ensure we have the resources needed for our corporation and to expand our project development business.

Our August 5th we extended the terms of our outstanding entrustment loan with Hefei High-tech Development Park Management Committee in the amount of US$234.6 million which was initially entered into in June 2011. As a result of the extension US$156.7 million portion of the loan previously classified as the current portion of long term debt was reclassified as long term liability thus reducing our current liability and improving our working capital position.

On the same day we announced that JA Solar and the Jinglong Group had secured a commitment for US$89.6 million credit facility from the Bank of Communications of China. On that credit facility US$40.7 million is available to JA Solar. We have already started to make use of this.

On August 14th we announced that JA Solar entered into a security purchase agreement with a single institutional investor that will result in gross profit to the company of up to $96 million, before placement and agent fees and estimated operating expenses.

On August 16 a sale under the offering was successfully closed with about 3 million ADS issued at a price of $7.88 per ADS. Initial gross proceeds to the company were US$24 million. To conclude with the more favorable macro environment across key regions we are now seeing a wider array of opportunities both in established and the emerging markets.

Our core manufacturing business continues to improve, both in terms of the progress we are making in technology and our expanding market footprint. The increasing diversity of our revenue base, will allow us to remain selective in terms of where we ship our products. Financially with the measures I just mentioned in place we have the resources needed to support the growth of our business.

Turning now to shipment guidance we expect total shipments in Q3 to be in the range of 450 megawatt to 470 megawatt. For the full year we maintain our previous shipment guidance of between 1.7 gigawatts and 1.9 gigawatts.

With that I will turn the call over to Mr. Chen for detailed look at our financials and the progress in technology and R&D.

Bill Chen

Thank you Mr. Xie and welcome everyone to today’s call. First I’d like to take you through our progress on technology, where we’ve made a number of important breakthroughs in the second quarter. We commenced mass production our 60 cell multi and mono crystalline modules with a maximum power output of 260 and 270 watts respectively.

Our monocrystalline 72 cell 325 watt modules also went into mass production. These produce a power output that is 5 to 10 watts above the industry average. Our Cypress -2 cells also went into mass production. These now run at an average converting efficiency at 19.3% for the mono and 17.8% for the multi.

We are currently in the process of transitioning most of our cell lines from Cypress to Cypress II technology. And we expect to complete the full transition by end of this year.

Finally as we announced recently our mono silicon [Si] and multi silicon cell both made significant breakthroughs. The former now produce 20.3% converting efficiency and the latter 18.3%.

The breakthrough with [Si] cell is a big step forward in terms our ability to produce industrial leading efficiency levels for a much more cost efficient, P type cells. We look forward introducing this to the market in the coming quarters.

Our R&D team has been doing excellent work over the last few quarters. And we’ll continue to invest prudently in upgrading our technology to ensure we retain our position as a technology leader.

Now I would like to walk you through our financial results for the second quarter. In Q2 we shipped 463.7 megawatt of solar power products above the high end of our previous guidance of 430 megawatt, representing an increase of 4.7% sequentially and an increase of 11.0% year-over-year. On these shipments modules and module tollings accounted for 253.9 megawatt, cells and cell tolling accounted for 209.8 megawatt.

In Q2 the geographic breakdown of shipments including modules cells and tolling was approximately 37.8% to China, 34.2% for APAC, 19.7% to Europe, 7.9% to the Americas. And the rest of the world accounted for 0.4%.

Net revenue for Q2 was $258.1 million, representing a decrease of 5.5% sequentially and a year-over-year decrease of 12.3%. The sequential decrease in net revenues was mainly due to an increase in the portion of tolling in overall shipments.

Q2 gross profit was $21.0 million or $8.1% of net revenue, compared to gross profit of $16.3 million or 6% of net revenue in last quarter, and a gross profit of $14 million or 4.8% of net revenue in Q1 of last year.

R&D expenses in Q2 were $3 million, a decrease from $3.5 million in Q1 and a decrease from $3.6 million in Q2, 2012. Loss from operations was $5.4 million, or negative 2.1% on net revenue in Q2. This compares with a loss from operations of $13.9 million or negative 5.1% on net revenue in Q1.

Interest expense in Q2 totaled $13 million, a decrease from $16 million in Q1. Other loss in Q2 was $1.3 million, compared to other loss of $2.9 million in Q1. Our net loss for Q2 was $21.6 million of which net loss attributable to ordinary shareholders was $22.6 million. Loss per diluted EPS was 58 cents compared to the loss per diluted EPS of 86 cents in the first quarter.

On the balance sheet side our cash, cash equivalents and restricted cash were $354.8 million compared with $499.3 million in Q1. The sequential decrease in cash, cash equivalents and the restricted cash balance was mainly due to the repayment of our senior convertible notes and accrued interest on maturity of $119.2 million in May 2013, as well as repayment of certain bank loans that were not renewed at maturity.

Accounts receivable in at the end of Q2 were $260.6 million compared to $211.7 million at the end of Q1. The improvement was due to the increased stringency in tracking accounts receivable. Days of sales outstanding at the end of Q2 were 91 days compared with 103 days in Q1.

Total inventories at the end of Q2 were $176.9 million, an increase from $174 million in Q1. Inventory turnover days in Q2 were 67 days compared to 61 days in Q1.

Total pre-payments to suppliers were $206.8 million in Q2 compared with $211.1 million in Q1. Total working capital at the end of Q2 was $111.5 million compared with $45.4 million at the end of Q1. Total short term bank borrowings were $109.6 million. Total long term bank borrowings were $576.8 million, among which $228 million were due in one year.

The sequential increase in working capital was mainly due to the reclassification of Hefei loans as described about which resulted in a lower current portion of long term debt as of end of Q2. CapEx for Q2 was $5.1 million compared with $16.2 million in Q2.

That concludes our prepared remarks. Operator, we are now ready to take questions. Thank you.

Question-and-Answer Session

Operator

(Operator Instructions). Our first question comes from the line of Brandon Heiken from Credit Suisse. Please go ahead.

Brandon Heiken - Credit Suisse

Hey, thanks again for taking the question. Can you clarify your expectations for margins for the rest of the year? And can you talk about your cost structure in the second quarter and what you expect for the rest of the year please?

Bill Chen

Hi, Brandon. For the full year I think our guidance for margins should be between 6% to 8% of gross margin. And the cost structure for module our non-silicon cost should be, by the end of the year should be around $0.46, right now it’s $0.49.

Brandon Heiken - Credit Suisse

Okay, great, thanks. And for the projects that you are developing in China, are those part of the annual shipment guidance? And when do you expect revenue recognition to happen on the project?

Jian Xie

So that's not in this year’s shipment. Maybe we will recognize next year, mid-next year.

Brandon Heiken - Credit Suisse

Okay. So it’s not part of this year’s shipment guidance?

Jian Xie

Yes.

Brandon Heiken - Credit Suisse

Okay. And how do you expect your project development activity to ramp say next year?

Jian Xie

I think we currently we have some projects in different phases, at different stages and hopefully we can get us 200 megawatt pipeline by end of this year and to recognize it maybe next year.

Brandon Heiken - Credit Suisse

Great, thank you.

Operator

Thank you. And our next question comes from the line of Edwin Mok from Needham & Company. Please go ahead. Excuse me, the line for Edwin Mok is now open?

Edwin Mok - Needham & Company

Hello, can you guys hear me?

Jian Xie

Yeah, go ahead, hi.

Edwin Mok - Needham & Company

Hi, sorry for that. So I have a question on your geographic mix. So did I hear correctly so on the back half or in the third quarter and fourth quarter, are you expecting a China mix increase, which would result in may be a lower ASP and may be a little lower margin in the third and the fourth quarter?

Jian Xie

Actually we -- the price in China is improving. This is especially in Q2. We sold more and more shipment to China with a little higher price. So we expect that the price in China in Q3 and in Q4 should be similar to worldwide, compared with worldwide.

Edwin Mok - Needham & Company

I see, okay. And can you tell us what you have done that drove the growth that you saw in Americas market? I think you mentioned in your prepared remarks that the demand out of Americas is constant around -- you said high demand for -- is it high efficiency or what is the factor that drove that growth?

Jian Xie

I think different market has different like reasons. In Japan this is the case for us with the higher efficiency products, with especially for our mono products. And for the U.S. and other market like Southern America, the reason may be more is on because of our, like financial stability and the bankability, the brand name. So with the different market we had different reasons.

Edwin Mok - Needham & Company

Nice, thanks very helpful. And the last question on the project that you guys have highlighted. Any way you can provide some ideas about pricing and margin that you expect for those products?

Jian Xie

Edwin, I think in general the project investment will have a 10% gross margin on overall capital investment, that’s the industry average in China and some other region as well.

Edwin Mok - Needham & Company

And what kind of pricing are we talking about on those projects, in terms of maybe [inaudible]?

Jian Xie

Project pricing it’s a pretty wide topic. What typically will happen is US$1.5 per watt.

Bill Chen

Yeah, for cost per watt for installation costs average in China Mainland it’s $1.5. So you have 10% gross margin on the total investment, that’s what we have in the market.

Edwin Mok - Needham & Company

Great, that’s very, very helpful. Thank you.

Bill Chen

Thank you.

Operator

Thank you. And our next question comes from the line of Mahesh Sanganeria from RBC Capital Markets. Please go ahead.

Unidentified Analyst

Hi, this is Chen Wei speaking for Mahesh. Thank you for taking my questions. First in the press release you guys mentioned about the higher portion of module and cell tolling. I am just wondering how much are module and tolling cells in the quarter? And I just want to understand the impact how this higher portion of tolling helped on gross margin?

Bill Chen

So wait a minute. So the tolling accounted for 15% of our total shipment.

Operator

All right, thank you. And our next question comes from the line of Pranab Sharma from Daiwa Capital Markets. Please go ahead.

Pranab Sharma - Daiwa Capital Markets

Thank you for taking my questions. My one question is on your second Q shipment how many percentage was on tolling side like you gave 253 megawatt for modules, can you segregate between tolling and non-tollings same way for cell?

Bill Chen

In terms of revenue 4% shipment, yes, for the module. So the module tolling shipment is 4% of our total shipment and the cells tolling is about 11% of our total shipment. So in total is 15% of our 400 megawatt shipment.

Pranab Sharma - Daiwa Capital Markets

Got it. And what was your non-poly processing cost on second quarter for modules and how do you expect by 4Q? And my -- on poly procurement cost what was there on second Q and what do you expect on 3Q?

Jian Xie

For the non-silicon is about US$0.49 non-silicon costs. And by end of the year our target is below $0.46.

Pranab Sharma - Daiwa Capital Markets

Okay. And poly procurement cost on second quarter what was it and how you are expecting in 3Q?

Jian Xie

On average it’s about $18.5.

Pranab Sharma - Daiwa Capital Markets

And expectation on 3Q and second half?

Jian Xie

That should be stable, and may be little but less than 5% of increase.

Pranab Sharma - Daiwa Capital Markets

Okay, if I may ask the last question your guidance for the second half is basically sequential to flat compared to first half, because first half you have already done more, nearly 900 megawatt. So why you have been little bit of conservative in the second half. Do you see some fall through in 4Q like 3Q is also sequentially flat?

Jian Xie

So we still keep our guidance unchanged between 1.7 gigawatts to 1.9 gigawatts. And for the first half of this year the total shipment is about 900 megawatts. Because for the second half this year I believe it should be exiting in the range of our guidance, because in Q4 the shipment will be a little lower due to the seasonal issue.

Pranab Sharma - Daiwa Capital Markets

Okay thank you.

Operator

(Operator Instructions). Our next question comes from the line of Emily Liu from Arete Research. Please go ahead.

Emily Liu - Arete Research Services LLP

Hi, I have two questions if I can. My first question is your shipment increased in the second quarter. As far as I know, as the environment in the second quarter is pretty stable, I just wonder whether revenue in the U.S. dollar terms actually dropped a little bit in the second quarter. And my second question is can you comment on the impact of your project business on your balance sheet going forward? Thanks.

Jian Xie

Yeah, let’s discuss the first question. Because we have 15% of shipment is our tolling business, so we only recognize the processing fee from the customers instead of recognizing it all, yeah, so that’s the reason. For the second one the project business I do not think big material impact to our balance sheet this year because most of our project will be constructed next year. So for next year we should have some assets on lease.

Emily Liu - Arete Research Services LLP

Okay. But do you, does Jaso intend to farm those projects, those projects directly on your balance sheet and let's see you are going to take, undertake the total loan as well on to your balance sheet?

Bill Chen

Hi, Amy. I think the funding for the project typically we will do we’ll fund the capital, turning into surplus annual total investment. The rest of the balance will come from the bank loan. And it depends on the cycle or the project. If the project completed and sale off within a year I think our balance sheet, on the annual basis the balance sheet should be better off.

Emily Liu - Arete Research Services LLP

Do you think there will be, on an annualized basis balance sheet should be better off, even including…

Bill Chen

Yeah, for project of six months then after construction we plan to sell them off. If that happen in one year, in twelve months the balance sheet should be okay.

Emily Liu - Arete Research Services LLP

Oh, okay. And I just, trying to understand the secondary market in China for project business is pretty competitive. I just wonder whether you have the project in your pipeline. Do you have the potential buyer lined up for the 50 megawatt project in Gansu and 300 megawatt in Hebei, any color would be appreciated?

Bill Chen

Yeah so we have some potential like investors and in discussion with them. So and you see very important is the location of the project. So our project in Hebei City near to very consumption center of the electricity. So I believe those projects are quite popular on the market.

Emily Liu - Arete Research Services LLP

Okay, great. And do you need extra bank facility for the project business next year?

Bill Chen

Okay, actually -- sorry.

Emily Liu - Arete Research Services LLP

Do you need extra bank facility for the project business next year?

Bill Chen

Actually China Development Bank and some local commercial banks already approved the credit facility. So we don’t need extra. In China for working capital on capacity basis the credit facility approval is different from the downstream projects credit facility approval, the downstream which is much easier.

Emily Liu - Arete Research Services LLP

Right, okay. And speaking of the credit facility, this, the term the Hebei loan it seems that terms are very favorable. If I read it correctly does that mean it’s interest free?

Bill Chen

It’s not interest free. It’s at market interest rate, prime rate, price at 105% of prime rate, that’s market rate.

Emily Liu - Arete Research Services LLP

Okay, great. And then just a final question, the recent rights issue if all the issued share are to a single investors and you raised 25 million right, even though you are able to raise up to 96 million.

Bill Chen

24 million eventually.

Emily Liu - Arete Research Services LLP

Okay, so that’s all to one single investor.

Bill Chen

Yeah, single investor yeah.

Emily Liu - Arete Research Services LLP

Okay. Great, thank you.

Operator

Thank you. And our next question comes from the line of Gordon Johnson from Axiom Capital Please go ahead. Excuse me, the line for Gordon Johnson from Axiom Capital is open. Please go ahead with your question.

Unidentified Analyst

Hey, how are you. This is Gordon's associate. Gordon just jumped off the line for a second. Could we come back in like two seconds?

Jian Xie

Sure.

Operator

Okay, thank you. And our next question comes from the line of James [inaudible] of Cowen & Company. Please go ahead.

Unidentified Analyst

Thanks for taking the questions. Can you tell us what your module and cell ASPs were in the quarter?

Bill Chen

The module ASP is $0.46, sorry $0.60 sorry, cell is $0.39.

Unidentified Analyst

I am sorry module is $0.60.

Bill Chen

$0.66.

Unidentified Analyst

$0.66 okay and cell is $0.39. And how are those trending in the third quarter?

Bill Chen

It’s stabilized, quite stable.

Unidentified Analyst

Stable around the same levels?

Bill Chen

Yes, should be.

Unidentified Analyst

And my follow-up question is on cost. You said processing cost is $0.49. What is the total all-in cost for modules now?

Bill Chen

$0.58 for module.

Unidentified Analyst

Okay. And finally the tolling, the gross margin on tolling is it higher or lower than on outright full module production?

Jian Xie

So a little lower.

Unidentified Analyst

Same for cell sales.

Jian Xie

Yes, those are little lower compared with direct sale of our products.

Unidentified Analyst

Thank you.

Jian Xie

Thank you.

Operator

(Operator Instructions). Our next question comes from the line of Paul Strigler from Esplanade. Please go ahead.

Paul Strigler - Esplanade Capital

Hey guys, are you tolling any sales or modules for European suppliers?

Jian Xie

Not in this quarter.

Paul Strigler - Esplanade Capital

But going forward would any tolling count against the cap. So if you tolled 100 megawatts of cells or modules, does that count against the seven gigawatt cap or is that a completely separate issue?

Jian Xie

So it’s not that clear at this moment because we are still in the process of how to like define every detailed point with the relevant authorities. So they are not clear on this issue.

Paul Strigler - Esplanade Capital

And then just one last one, it looks like operating expenses came down quite a bit sequentially. Where do you think is a fair run rate for you guys on OpEx?

Jian Xie

Actually our Q2 operating expense were lower compared to Q1 in the last year, because we have very stringent cost control policies in place. I think this is general procedures in company.

Paul Strigler - Esplanade Capital

So it fair to model about 26.5 million per quarter for the back half of the year?

Jian Xie

The model is little above average of our Q1 and Q2 number.

Paul Strigler - Esplanade Capital

Perfect. Thanks a lot guys.

Jian Xie

Okay. Thank you.

Operator

Thank you. And our next question comes from the line of Emily Liu of Arete Research. Please go ahead.

Emily Liu - Arete Research Services LLP

Hi, thanks for taking my question again. Just one quick follow-up, at the moment are you seeing any trend in your shipment to Japan change in the third quarter, is it going to be the same percentage roughly, Q3 versus Q2? And I wonder whether you can give me breakdown of your shipment to Japan in terms of cell and modules? Thank you.

Jian Xie

Almost all of our shipments to Japan are modules and we expect similar shipment volume for Japan for the whole year.

Emily Liu - Arete Research Services LLP

For whole year, and how big is the Japan account for your shipment in APAC, excluding China?

Jian Xie

Sorry -- wait a minute. Actually shipping to Japan accounts for 36% of total module shipping.

Emily Liu - Arete Research Services LLP

Okay, great. And do you think there is going to be roughly the same percentage in the third quarter?

Jian Xie

Yeah, for coming two quarters.

Emily Liu - Arete Research Services LLP

Okay. Do you have visibility into Q4, in terms of your shipment to Japan?

Jian Xie

I think it should be like, have the same, similar volume and may be a litter lower.

Emily Liu - Arete Research Services LLP

Okay. Thank you so much.

Jian Xie

Thank you.

Operator

Thank you. (Operator Instructions). We are now approaching the end of the conference call. I will now turn the call over to Mr. Jian Xie for his closing remarks.

Jian Xie

Thank you everyone for joining us today. We appreciate your interest in and support of JA Solar. If you would like to arrange a meeting with us or if you have any questions, please contact us via our IR firm, Brunswick Group and they will be happy to help you. Their contact information is on today's press release. Thank you again for your continued support and the team will look forward to talking with you in the coming months.

Operator

Thank you ladies and gentlemen. This does conclude our conference for today. Thank you for participating. You may all disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: JA Solar Holdings' CEO Discusses Q2 2013 Results - Earnings Call Transcript
This Transcript
All Transcripts