(JA Solar article updated for Oppenheimer price revision and additional analyst commentary)
ZHABEI, China (
hit a 52-week high on Wednesday morning as the action across the Chinese solar sector continued on a torrid pace to begin the new year, and a Street analyst predicted a stronger than normal sales season.
Shares of JA Solar -- which surpassed its average daily trading volume of 8.4 million shares before midday Wednesday -- were up 7.4%, or 47 cents, to $6.80 on Wednesday. JA Solar shares had come down slightly from the 52-week high of $6.95, achieved earlier in Wednesday's trading session, but ended the day trading 17 million shares, double the normal daily volume.
Even slipping beneath its 52-week high shortly after having attained it, the rapid rise in the share price of JA Solar has been notable. From Dec. 1, 2009, through Wednesday, JA Solar shares have climbed from $3.98 to $6.87. Since Dec. 1, 2009, JA Solar has had ten days of trading above 10 million shares, and seven consecutive days - between Dec. 14 and Dec. 22 -- when JA Solar traded more than 10 million shares, with a single-day high of 39 million shares traded reached on Dec. 15, 2009. **The 17 million shares traded on Wednesday were the second-best trading day for JA Solar.
JA Solar was not even the largest gainer in the solar sector on Wednesday among the upstart Chinese.
was up more than 11.8%, or 62 cents to $5.87. What's more,
Solarfun Power Holdings
had the largest actual price gain among Chinese solar gainers on Wednesday, up $1.18 cents to $9.99, or a gain of 13%.
The big news on Wednesday pushing the share of the Chinese solar players higher was a price revision from Oppenheimer & Co. for JA Solar and Solarfun Holdings. Oppenheimer analyst Sam Dubinsky expects stronger than typical seasonal sales, and a rush in Germany to install solar systems ahead of looming government cuts to solar subsidies.
JA Solar, Solarfun and ReneSola are among the
Chinese solar players that have picked up right where they left off in 2009, trading up on the first three days of the new year. The
cost advantage in evidence among the Chinese solar players in 2009 is expected to continue into the new year.
Still, other analysts pointed to the subsidies and incentives coming from Asian nations, including China and Taiwan, as an equal driver of recent popularity in the Chinese solar players.
"This could be like what happened with solar companies early into Germany. They were able to dump as much product as possible in Germany with favorable subsidies and that drove early profits in the solar sector. We could see a similar thing in Asia, and it is all about positioning in that region now," said Ben Pang, analyst with Caris & Co.
Pang, however, cautioned investors from getting ahead of the actual Asian government support for solar power. "It often takes a year or two for the rumors to match up correctly to the reality. The rumors are always ahead of the actual legislation," Pang said.
Trina Solar, one of the bigger Chinese solar stocks, announced on Wednesday morning that it would
split Trina Solar ADR shares to spur retail investor trading.
-- Reported by Eric Rosenbaum in New York.
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