Operating leverage is significant for the solar company as revenue grows and exposure to China and Japan will offer baseline growth opportunity, according to analyst Colin Rusch.
"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 flat line. 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...We believe JASO should see all in manufacturing cost of <$0.50W by the end of the year...We believe the company should be able to reach near 20% GM by the end of 2014 for its manufacturing business," Rusch said.
TheStreet Ratings team rates JA SOLAR HOLDINGS CO LTD as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate JA SOLAR HOLDINGS CO LTD (JASO) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally high debt management risk."