Thursday, February 18, 2010
JA SOLAR -
Investment Thesis
• JA solar is the largest and lowest-cost pure-play cell manufacturer, which should allow it to gain further market share at the expense of European and Taiwanese producers.
• The company is looking to produce high efficiency solar cells by late 2010, with volume ramp in 2011, which will be a key differentiator from the peers.
• JA Solar is transforming its business model by manufacturing “white label”
modules and selective internal wafering. We expect accretion to RoE
and EPS as a result.
• We think the worst is behind JA Solar. The rate of cell ASP declines is
moderating and shipment growth is accelerating due to strong price
elasticity. This should result in a strong positive inflection in revenues and
profits.
Key Value Drivers
• Cell / Module shipments.
• Cell / Module ASP
• Raw material cost (i.e., wafer cost)
• Hi efficiency product
• Integration into wafer making
Potential Catalysts
• Gain market shares from EU competitors through low pricing strategy
• Faster ramp-up of high efficiency cell
• Further improvement of cost structure
• Buying back CBs at low market price
Key Risks
• Currency dynamics
• Failure to win new international customers
• Inability to renegotiate wafer price
• Slower demand recovery in its large end markets
• Slower module capacity ramp-up
ful report here
Labels:
Business,
Electric,
Energy,
Manufacturing,
Renewable,
Solar,
Solar cell,
Technology
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment