JA Solar (JASO) Stock Higher Today as China Ups 2015 Solar Energy Target

NEW YORK (TheStreet) -- Shares of JA Solar Holdings  (JASO) are higher by 1.37% to $9.63 on heavy volume in afternoon trading Wednesday after China raised its 2015 solar energy target in an effort to clear its polluted air, according to Bloomberg.

China, the world's biggest emitter of carbon, promised to add almost 2.5 times as much capacity as the U.S. added last year, Bloomberg added.

China plans to install 17.8 gigawatts of solar projects in 2015, higher than the 15 gigawatts the National Energy Administration had estimated, Bloomberg noted.

This morning, analysts at Roth Capital issued a note saying China may soon increase its 2020 solar energy target too.

The firm said investor sentiment towards the sector has become more upbeat, and maintained its "buy" rating on shares of JA Solar Holdings.

About 2.01 million shares of JA Solar have exchanged hands as of 1:33 p.m. ET today, compared to its average trading volume of about 1.76 million shares a day.

China-based JA Solar is engaged in the business of designing, developing, manufacturing and selling solar cell and solar module products.

The company is also engaged in the manufacturing and sales of solar cells.

Separately, TheStreet Ratings team rates JA SOLAR HOLDINGS CO LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate JA SOLAR HOLDINGS CO LTD (JASO) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • JASO's very impressive revenue growth greatly exceeded the industry average of 10.6%. Since the same quarter one year prior, revenues leaped by 73.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • JA SOLAR HOLDINGS CO LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, JA SOLAR HOLDINGS CO LTD continued to lose money by earning -$2.05 versus -$6.81 in the prior year. This year, the market expects an improvement in earnings ($1.32 versus -$2.05).
  • JASO's debt-to-equity ratio of 0.76 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.74 is weak.
  • JASO has underperformed the S&P 500 Index, declining 14.88% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The gross profit margin for JA SOLAR HOLDINGS CO LTD is rather low; currently it is at 15.05%. Regardless of JASO's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, JASO's net profit margin of 5.03% is significantly lower than the industry average.
  • You can view the full analysis from the report here: JASO Ratings Report

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