JA Solar’s PV module shipments are projected to grow at strong 44% CAGR through 2015, according to ROTH Capital equity analyst, Philip Shen in an investor report that gives the company a buy rating.
ROTH Capital believes JA Solar is “flying under the radar” of many investors as the company had transformed itself from a tier one solar cell producer to a top ten PV module supplier and is further transforming into a Photovoltaics Energy Provider (PVEP) by moving downstream and developing a PV power plant projects business.
Its PV project pipeline was said to be in the range of 470MW, targeting 200MW of completions in 2014, primarily in China.
JA Solar was also noted for having strong market presence in Japan, the second largest PV market to China in 2013, with over 40% of solar cell and PV module shipments in the third quarter of 2013 shipped to customers in the country.
ROTH Capital equity analyst, Shen also highlighted JA Solar’s financial strength in comparison to many of its Chinese tier one peers. Shen noted that JA Solar’s third quarter, 2013 net-debt to total capital stood at 24% versus its peer average of 53%. Its interest payments of 3.2% of revenues are not expected to ‘drag’ on JA Solar’s eventual return to profitability, which Shen expects in the second quarter of 2014.
The equity analyst also noted that JA Solar commanded higher PV module ASP’s than many of its peers, with current ASPs at US$0.67/W.
However, Shen expects solar cell shipments to decline over the next two years as the company consumes an increasingly larger amount of in-house production to meet PV module and project pipeline demand.
According to Shen, JA Solar has a fast growing PV module business, and an emerging projects business that is expected to contribute to bottom-line growth over the coming years.