JA Solar (JASO) Upgraded to Strong Buy on Solid Results

On Jan 02, 2015, Zacks Investment Research upgraded JA Solar Holdings Co., Ltd. (JASO - Analyst Report)  to a Zacks Rank #1 (Strong Buy) from a Zacks Rank #2 (Buy).

Why the Upgrade?

The Zacks Consensus Estimate for first-quarter and full-year 2015 saw an upside as estimates moved north in the last 60 days. It surged 58.3% to 19 cents for the first-quarter of 2015 and 13.5% to $1.18 for 2015.

JA Solar reported strong third-quarter 2014 performance. Moreover, it reported positive earnings surprises in three of the last four quarters with an average earnings beat of 237.25%. The expected earnings growth is 22%.

In the third quarter, the company reversed its year-ago loss as its shift in focus to solar modules from solar cells paid off. Its total shipments grew by 57% from the year-ago period due to a 127.4% surge in module shipments.

The company continues to reap the benefits of its change in focus. Module shipments constituted 88% of the total shipments in third-quarter 2014. The company is witnessing robust demand for its modules in the fourth quarter as well. In Dec 2014, the company shipped solar modules of 100 megawatts capacity to a solar farm in Pakistan.

Apart from providing enhanced services to its customers, JA Solar is committed to enhance shareholder value. During its third-quarter earnings call, the company announced that its board of directors had approved a share repurchase program that authorized the repurchase of up to $90 million worth of its issued and outstanding ADS prior to Nov 17, 2015.

Also, the U.S. and China have issued a joint statement to curb pollution levels. China has pledged to increase energy consumption from renewable sources to 20% by 2030 and aims to add 100 GW by 2020 to support the photovoltaic power generation. This will cause a major boom in the global solar energy market and benefit JA Solar and other solar companies like Yingli Green Energy Holding Company Limited (YGE - Snapshot Report), JinkoSolar Holding Co., Ltd. (JKS - Snapshot Report) and ReneSola Ltd (SOL - Analyst Report).

JA Solar anticipates robust demand in 2015 and plans to expand its cell and module capacity by 20%. This will ensure that the company posts impressive earnings in 2015 as well.
 

JA Solar (JASO) Upgraded to Strong Buy on Solid Results