The gradual recovery of the solar sector bodes well for JA Solar Holdings Co. Ltd. (JASO). The company separately announced a share buyback program and upped its shipments guidance range for the final quarter of fiscal 2009.
 
JA Solar announced that its Board of Directors has approved a share repurchase program, effective Dec 14, 2009. Under this program, JA Solar can repurchase up to an aggregate of $75 million of its American Depositary Shares, or ADSs.
 
JA Solar at the end of the recent quarter had cash and cash equivalents of RMB 1.7 billion ($256.1 million), compared with RMB 2.2 billion ($329.0 million) after the end of the second quarter of fiscal 2009. Operating cash flow for the latest quarter was RMB 288.6 million ($42.3 million), compared with RMB 194.7 million ($28.5 million) in the second quarter of 2009. At the same time the company had convertible bonds outstanding of RMB 1.7 billion ($253.5 million) and total long-term bank loans outstanding of RMB 680.0 million ($99.6 million).
 
Separately, JA Solar also announced that it expects fourth quarter shipments to exceed the high end of the guidance it had given in Nov 2009. At that time the company expected its fourth quarter of 2009 shipments to be in the range of 170MW – 200MW, and full year 2009 shipments to be in the range of 448MW – 478MW.
 
The updated guidance is based on current customer orders and product deliveries. As a result, the company raised its guidance for the full year 2009. JA Solar currently expects shipments for the fourth quarter to exceed 210MW. For the full fiscal 2009, the company expects shipments to exceed 488 MW.
 
JA Solar’s revenues rose 119.6% to RMB 1.3 billion ($193.3 million) in the recent quarter, as compared to RMB 600.7 million ($88 million) reported in the previous quarter. JA Solar’s shipments were a company record of 177MW in the recent quarter. In the prior quarter, shipments were only 77MW, representing a sequential growth of 129.9%. In the year-ago quarter also, shipments were only 99MW, representing shipment growth of 78.8%.
 
JA Solar based in Ningjin of the Hebei province in the People’s Republic of China, manufactures high-performance solar cells. 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 the markets of Greece, Portugal, France , Italy and South Korea .
 
JA Solar is one of the most cost-efficient solar producers with a geographically diversified customer base, as well as silicon wafer supply agreements in place to cater to its production. The positive factors include ongoing expansion programs, subsidy program in China, improving operating efficiencies, rising margins, and higher conversion efficiency. However, apprehensions over the tepid module demand in Europe, rising competition, financial stability of its customers, and the company’s high R&D expenses may adversely affect performance over the near term.
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