Northland Capital Markets Starts JA Solar Holdings Co., Ltd. (JASO) at Outperform
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Price: $7.49 --0%
Rating Summary:
5 Buy, 5 Hold, 8 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 9 | New: 45
Rating Summary:
5 Buy, 5 Hold, 8 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 9 | New: 45
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Northland Capital Markets initiated coverage on JA Solar Holdings Co., Ltd. (NASDAQ: JASO) with an Outperform rating and a price target of $19.00. Analyst Colin Rusch said increased vertical integration supports margin expansion, operating leverage is significant for JASO as revenue grows, and exposure to Japan and China offers baseline growth opportunity.
"With JASO increasing its module capacity in 2014, we expect the company will be able to see manufacturing increasing margin as some peers see margins begin to flatline. We also believe the company has among the best non-silicon costs in the industry, exiting 2013 at $0.43/W and targeting <$0.40/W. With polysilicon prices moving to ~$22/kg and now stabilizing, we believe JASO should see all-in manufacturing cost of <$0.50/W by the end of the year. With average pricing across geographies still hovering in the mid-$0.60s/W, we believe the company should be able to reach near 20% GM by the end of 2014 for its manufacturing business," said Rusch.
"In 4Q:13 JASO recorded Operating plus Interest Expense of $0.08/W. As the company continues to lower its debt and grows MW shipments, We believe JASO can reach $0.05-$0.06/W. We are currently modeling $0.07/W in 2014 for OpEx plus Interest expense. We expect the company will be able to continue growing and lower that ratio. With GM on modules sales at $0.10/ W to $0.12/W and system sales in China at $0.15-$0.25/W. We believe the company has the potential in 2015 to reach $3 or more in EPADS when even considering dilution from its outstanding warrants," he added.
For an analyst ratings summary and ratings history on JA Solar Holdings Co., Ltd. click here. For more ratings news on JA Solar Holdings Co., Ltd. click here.
Shares of JA Solar Holdings Co., Ltd. closed at $10.17 yesterday.
"With JASO increasing its module capacity in 2014, we expect the company will be able to see manufacturing increasing margin as some peers see margins begin to flatline. We also believe the company has among the best non-silicon costs in the industry, exiting 2013 at $0.43/W and targeting <$0.40/W. With polysilicon prices moving to ~$22/kg and now stabilizing, we believe JASO should see all-in manufacturing cost of <$0.50/W by the end of the year. With average pricing across geographies still hovering in the mid-$0.60s/W, we believe the company should be able to reach near 20% GM by the end of 2014 for its manufacturing business," said Rusch.
"In 4Q:13 JASO recorded Operating plus Interest Expense of $0.08/W. As the company continues to lower its debt and grows MW shipments, We believe JASO can reach $0.05-$0.06/W. We are currently modeling $0.07/W in 2014 for OpEx plus Interest expense. We expect the company will be able to continue growing and lower that ratio. With GM on modules sales at $0.10/ W to $0.12/W and system sales in China at $0.15-$0.25/W. We believe the company has the potential in 2015 to reach $3 or more in EPADS when even considering dilution from its outstanding warrants," he added.
For an analyst ratings summary and ratings history on JA Solar Holdings Co., Ltd. click here. For more ratings news on JA Solar Holdings Co., Ltd. click here.
Shares of JA Solar Holdings Co., Ltd. closed at $10.17 yesterday.
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