[Guest roller]

Great, here are some more links to this news.

http://m.pv-magazine.com/news/details/beitrag/ja-solar--powerway-establish-module-fab-in-south-africa_100014003

http://www.pvpowerway.com/news/1067.html

[Guest JulyWebb]

This is Good News, Powerway is established in South Africa. They are creating a one way stop solution service.

[sunnysky 905]

Great news! Seems they finally broke the silence - I hope more is coming

I'm really frustrated by their IR. Still no answers to my questions except one initial reply upon receiving my email.

[odyd 1,340]

This news could be interpreted as module processing (due to automation) is no longer in silo to China as benefit in processing costs, or/and South Africa can hold to ASP which compensates for the cost increase.  There is logistical cost benefit on shipping cells, and I suppose SA could be a hub for the region. Good to see the global expansion. I always hoped for Chinese to expand own manufacturing globally, to be accepted globally easier. Local economy getting a boost speaks more volume to support Chinese Solar than any drop in ASP. 

[Guest JulyWebb]

Great news! Seems they finally broke the silence - I hope more is coming

I'm really frustrated by their IR. Still no answers to my questions except one initial reply upon receiving my email.

 

If you didn't get a reply from the IR in NY send it to the one in China. The "China IR" got back with me on the Reuters Article and showed they had Reuters correct the article. Reuters told them they made a mistake. Sunnysky just a suggestion, Any answers back on these questions I ask will be of great help.

[sunnysky 905]

Both locations get the emails and the initial acknowledgement was from China. 

[Guest JulyWebb]

Both locations get the emails and the initial acknowledgement was from China. 

 

I'm thinking it might of came back from Yi-Ke Hong he is the Account Director in China. He is the one that got back with me with the correction on Reuters.

[sunnysky 905]

Well, I think you might be able to argue that those warrants were priced too low. For example, I figured they had used a volatility of about 33% and you may argue they should have used 90%. But those warrants were not given away for "free" - they were given to the investor (although without an explicit fee) in exchange of them buying  3 M ADRs at the offering price of $7.88. Recall the stock traded at $7.63 on the closing day so investor took a loss of $761K on those ADRs.

 

If you go by the official statement, JASO took a loss of $7.3 M on the closing date for the entire offering. That reflects the "fair value" of the warrants in excess of net proceeds of equity offering. According to my calculation, that is indeed fair if you accept 33% as an adequate volatility for the stock.

 

I don't like the offering - it's too early, the stock price was too low, and there was too much dilution. But I don't think your $50 M liability is the correct figure to use when trying to judge the fairness of the deal.

[explo 648]

But those warrants were not given away for "free" - they were given to the investor (although without an explicit fee) in exchange of them buying 3 M ADRs at the offering price of $7.88. Recall the stock traded at $7.63 on the closing day so investor took a loss of $761K on those ADRs.

 

Thanks that's a good point. I thought they sold at discount. So maybe the "price" for warrants the investor had to pay was to not get the 3m ADS at discount.

 

50m is the derivative liability on BS Sep 30. At the same time they reported a 30m loss on it, like the 21m proceeds was for the warrants. Normally equity should rise 21m - net loss but equity change was same as net loss which confuses me further. Anyway of those 30m loss 22m was value change since issue and 7m diff between issue price and fair value.

 

What do you think about the proceeds not adding to equity (instead offsetting the 50m liability in the profit it seems)?

[Guest Rommel]

JASO hoped to get $200M out of this offering, almost 50% of their market cap at the time. This deal is already priced into the stock and I am sure the investor is using the warrants to maximize their trading in JASO. That is what a hedgie does. There is nothing we can do about the deal JASO made for the warrants and we bought into it after the deal was announced so are we saying that we did not understand the deal then but do now and it is not good?

 

However, I am confident that JASO has turned a profit in Q4. That will be good for the investors any way we look at it.