JA Solar (NASDAQ-JASO) Initiating Coverage

Wed, 2012-09-05
Energy & Resources

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Title: JA Solar (NASDAQ-JASO) Initiating Coverage - Solar product manufacturers face difficult quarters ahead

Synopsis: We initiate coverage of JA Solar Holdings Co., Ltd. (NASDAQ: JASO) with an Underweight rating and a 12- to 18-month price target of US$0.86, a 2.4% upside to the current price. We believe that due to the current market conditions, there will be continued margin pressure resulting in limited revenue and profit growth until at least the second half of FY2013. We also anticipate that the industry will undergo consolidation as a result of weak industry performance, which will create negative investor sentiment and pressure valuations over at least the next year before the industry improves. Although there may be upcoming opportunities for speculative buys due to the depressed valuations of the industry, we recommend investors take a cautionary approach.

Report length: 46 pages (excluding legal disclaimer)

Matthew Bovencamp
Peter Fang, CFA