JA Solar achieves highest module shipment growth in industry for 2014

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Updated: Major tier-1 PV manufacturer JA Solar reached module shipments of 2.4GW in 2014, confirming shipment growth of 105% from the previous year and the highest shipment growth in the industry. 

JA Solar reported total shipments grew to approximately 3.1GW, with module shipments reaching 2,406.8MW and solar cell shipments of 651.1MW.

The company reported net revenue of US$1.8 billion, compared to net revenue of US$1.2 billion in fiscal year 2013. Gross margin was 15.6%, compared to 10.6% in fiscal year 2013. The company reported an operating profit was of US$106.8 million, compared to an operating loss of US$14.7 million in fiscal year 2013. 

In the fourth quarter of 2014, JA Solar reported total shipments of 952.7MW, above the high end of the previously announced guidance of 850 to 900MW. Shipments grew 21.3% sequentially and 43.2% year over year.

Net revenue in the quarter was US$576.4 million), an increase of 65.3% year over year and 18.4% sequentially. Growth was said to be driven by strong sales in China, and solid sequential and year over year growth in Europe and North America. 

Revenue growth exceeded shipment growth as product mix shifted to over 90% modules, compared to lower margin cells. 

Gross profit in the quarter was US$89.3 million, which increased 65.4% year over year and 21.9% sequentially. Gross margin was 15.5%, which compares to 15.5% in the year-ago quarter, and 15.0% in the third quarter of 2014. The sequential gross margin increase was driven by the continued shift in mix to modules.

Baofang Jin, chairman and CEO of JA Solar, commented, “Our results in Q4 confirm the visibility we had coming into the quarter. Demand in the China market was as strong as expected, as developers and utilities rushed to meet aggressive government-directed goals for the year. We started the quarter with all of our capacity booked, and demonstrated excellent manufacturing execution to fill orders, resulting in a shipment growth of 43% year-over-year and 21% sequentially. We executed at the margin level too, with product and geographic mix drive sequentially higher gross margin. Filling capacity as we grow enabled us to show steady bottom line improvement. We grew non-GAAP earnings per ADS by 34% sequentially and 85% year over year.

“These strong results capped a year of achievement for JA, in which we solidified our position as a leader within the top tier of solar equipment producers. We expect our revenue growth rate of 57% to be among the highest in the industry. Our strategic decision to shift our product mix to more profitable modules and better geographies paid off, with gross profit more than doubling as our gross margin expanded by 500 basis points. We continued to invest heavily in R&D, increasing this expense by 58%, but held other operating expenses under control, resulting in solid operating and net margins. Our intention in 2015 is to sustain this track record of rapid growth and high profitability.”

2015 Guidance

JA Solar guided first quarter 2015 total cell and module shipments to be in the range of 680MW to 750MW and full-year shipments to be in the range of 3.6 GW to 4.0 GW, including 200MW to 300MW of modules shipments to its downstream projects.

Capacity expansion

JA Solar noted in its fourth quarter and full year earnings call that it expected to increase both solar cell and PV module capacity to 3.5GW, up from 2.8GW in 2014. 
However, the capacity expansion guidance is 100MW less than previous guidance of 3.6GW. 

Management noted in the earnings call that the new capacity at its China facilities would be completed in the first quarter of 2015, while overseas expansion at its JV facility in South Africa was said to be around 400MW and would be completed later in the year. 

The company is planning capital expenditure of US$150 million in 2015 to achieve capacity expansion targets. 

PV Projects

JA Solar noted that it expected downstream project business to triple in 2015 to around 300MW, which will include projects planned outside of China for the first time. The company built and grid connected one 100MW power plant in China in 2014.

Management noted projects outside China include South Africa and Latin Amercia as well as a project in the US.

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