JA Solar Holdings Co. Ltd. (JASO) and MEMC Electronic Materials Inc.’s (WFR) affiliate, MEMC Singapore, formed a 50-50 joint venture to build and operate a solar cell production facility in China.
The Phase One of the project will involve the building of a production facility with a capacity of 250 megawatts (MW) of photovoltaic (PV) cells located at JA Solar’s Yangzhou site. In the following phases, total production capacity may be expanded up to 1GW. Phase one of the project is expected to begin in 2H11.
The solar companies are spending heavily to increase their production capacity and capturing a larger market share. JA Solar is one of the most cost-efficient solar producers in the world, with a geographically diverse customer base as well as silicon wafer supply agreements in place to feed its production.
In the near term, however, apprehensions over the tepid module demand in Europe, rising competition, wafer dependency, the financial stability of its customers and the oversupply of solar cells in the market will restrain the valuation of the company.
JA Solar presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.
However, in the near term, we would advise investors to accumulate its short-term Zacks #1 Rank (Strong Buy rating) peers like JinkoSolar Holding Co. Ltd. (JKS)and LDK Solar Co. Ltd. (LDK).
Last month, JA Solar Holdings Co. Ltd. announced fourth quarter adjusted earnings per American Depositary Share (EPADS) of 54 cents versus the Zacks Consensus Estimate of 47 cents. The forward Zacks Consensus Estimates for first quarter 2011 and fiscal year 2011 are 33 cents per share and $1.42 per share, respectively.
Based in Ningjin of the Hebei province in the People’s Republic of China, JA Solar Holdings Co. Ltd. is a leading manufacturer of high-performance solar power products. The company sells its products to solar manufacturers worldwide, who assemble and integrate solar cells into modules and systems that convert sunlight into electricity for residential, commercial, and utility-scale power generation.
JA SOLAR HOLDGS (JASO): Free Stock Analysis Report
JINKOSOLAR HLDG (JKS): Free Stock Analysis Report
LDK SOLAR CO (LDK): Free Stock Analysis Report
MEMC ELEC MATRL (WFR): Free Stock Analysis Report
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