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odyd

JA Solar (JASO)

2,681 posts in this topic

Agree with several of you here in that SOL a solid chance of really taken market share and coming out a clear winner. Face it they have one of the best if not the best line up of module out there. poop even their latest test showed greater output than even they expected. Plus their management has the best R and D team out there and really limited their risk the last 2 years. I bought a couple large blocks in 1.50's and and as long as spot prices keep rising I'm holding long. Mother Nation is stepping up in 2013 in a big way... Glad I found this board.... Yahoo f in sucks

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One thing of note here is that JASO's short interest has skyrocketed (you can see it on odyd's data). On top of that, JASO has a conflict of interest that does not look well for the company... the new CEO Baofang Jin IMO... well, read below... http://seekingalpha.com/article/839381-2-chinese-solar-stocks-to-short-with-a-target-price-of-mere-cents ====================================== As an added negative point, this company has, by its own admission, an unusual corporate governance issue. I quote from the 2011 20-F filing: Jinglong BVI, which is controlled by the shareholders of Hebei Jinglong, is our largest shareholder. In addition, Mr. Baofang Jin, the executive chairman of our Board of Directors, is a shareholder of Jinglong BVI and is also the chairman of Hebei Jinglong. Jinglong Group (including Hebei Jinglong) currently provides a number of products and services to us, including silicon wafer supply (on prepayment terms) and real property leases. Our transactions with Jinglong Group are governed by a number of contracts, the terms of which were negotiated at what we believe are on an arm's length basis. In November 2011, we also completed the acquisition of Silver Age, a British Virgin Islands company controlled by Jinglong BVI. See "Item 7. Major Shareholders and Related Party Transactions - B. Related Party Transactions." However, the interest of Jinglong BVI may conflict with our own interest with respect to our transactions with Jinglong Group. As a result, we may have limited ability to negotiate with Jinglong Group over the terms of the agreements because Jinglong BVI may exert significant influence on our affairs through our Board of Directors. In addition, Jinglong BVI may be able to prevent us from taking actions to enforce or exercise our rights under the agreements we entered into with Jinglong Group. Furthermore, we cannot assure you that our transactions with Jinglong Group will always be concluded on terms favorable to us or maintained at the current level or at all in the future. As a result, when these situations arise, our financial condition, results of operations and implementation of strategy may be materially and adversely affected." Do you understand all of that and take any comfort from it? I do not. JA Solar is also a slam dunk sell.

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Jinglong group seems to make ingots wafer cell and modules. So is JASO purchasing ingots and wafers at unfavorable terms compared with other companies? http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=33804201 "Jinglong Group Co., Ltd. produces large diameter and low content oxygen and carbon mono crystalline silicon ingot and wafer, solar cell, and module, as well as semiconductor equipment. Jinglong Group Co., Ltd. has a strategic cooperation with Jabil Circuit Inc. The company was founded in 1992 and is based in Ningjin, China." But I am still sceptical about this as this seems to be a very short type of article on seekingalpha. Perhaps someone who knows JASO more could elaborate theyre view?

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Unfortunately some of these solar 11s have a structure of majority owner = chairman = CEO. These are often successful Chinese business men owning multiple companies and often doing arms length deals between them. JASO is probably the worst example of this. They've not just bought wafers from the chairman's other companies. They've bought whole companies from him. One example was a wafer company, just before the wafer market crashed. If one is paranoid one would think that these companies listed in US to take money from americans and funnel to the chairman's pocket in the other (stronger?) private companies he owns. I don't believe that, but this structure doesn't help with the bad China sentiment among US investors.

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Yes there is the good, the bad and the ugly? The good is this turns their inventory and should lower average costs going forward The bad based on a bump to 70% modules shipment, they will be pushing a lost of $1 a share The ugly, if they take more reserves for long live asset impairments.
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It seems to be a trend that those with domestic focus are beating guidance. SOL already guided 635 to 675 MW, so they probably saw the huge China Q4 demand ahead of some peers. I can see two reasons for JA shipping 25% more than they expected. One: they directly supplied the China module demand. Two: they got a lot of cell tolling orders from companies like SOL. SOL guided for around 70 MW Q4 China shipments of modules, up from none in Q3 and total module shipments up more than 100 MW from Q3. That should be easy tolling order for JA to claim. SOL is doing 40 MW projects in China as well in Q4 (another 6 MW is developed in Romania), so even more cell tolling might be required than their module shipments indicate. LDK sold of most of their cell capacity and might toll, GCL might toll cells and modules with different partners, but likely they would toll the modules as well from JA if they toll cell from them. It probably doesn't get better than 12Q4 for JA from the demand volume perpective. China demand will be much less in Q1 and Q2.

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It probably doesn't get better than 12Q4 for JA from the demand volume perpective. China demand will be much less in Q1 and Q2.

China's demand in H1 is expected to be at 5GW, and depending on no changes to FiT rates can be more. I think they will be rolling good this year.
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