JA Solar Holdings Co., Ltd. (JASO) isengaged in the development, production and marketing of photovoltaic(PV) solar cells, which convert sunlight into electricity, in thePeople’s Republic of China (PRC). Its solar cells are assembled andintegrated into solar modules and systems that convert sunlight intoelectricity through a process known as the photovoltaic effect.Substantially all of the Company’s business is conducted through theoperating subsidiaries, JingAo Solar Co., Ltd. (JA Hebei), Shanghai JASolar PV Technology Co., Ltd. (JA Zhabei) and JA Solar TechnologyYangzhou Co., Ltd. (JA Yangzhou), in which the Company indirectly holdsa 100% interest. JA Solar also produces and sells monocrystalline andmulticrystalline solar cells.

The Company was founded in 2005 and is based in Shanghai, the People’s Republic of China.

Source: Reuters.com, SEC Filings.

Financial Summary

Total shipments in the fourth quarterof 2009 was a record 231MW, compared with third quarter shipments of177MW, representing sequential growth of 30.5%. Compared with the sameperiod last year, shipment growth was 278.7%, up from 61MW in thefourth quarter of 2008.

Revenue in the fourth quarter of 2009was RMB 1.6 billion ($238.4 million), an increase of 23.4% from RMB 1.3billion ($193 million) reported in the third quarter of 2009 and anincrease of 66.2% from RMB 979.0 million ($143.4 million) reported inthe fourth quarter of 2008.

Gross profit in the fourth quarter of2009 was RMB 333.8 million ($48.9 million), compared with RMB 220.5million ($32.3 million) in the third quarter of 2009 and RMB 9.7million ($1.4 million) in the fourth quarter of 2008. Gross margin was20.5% in the fourth quarter of 2009, compared with 16.7% in the thirdquarter of 2009 and 1.0% in the fourth quarter of 2008.

Total operating expenses in the fourthquarter of 2009 were RMB 88.3 million ($12.9 million), compared withRMB 72.3 million ($10.6 million) in the third quarter of 2009 and RMB130.8 million ($19.2 million) in the fourth quarter of 2008.

Operating income in the fourth quarterof 2009 was RMB 245.5 million ($36 million), compared with an operatingincome of RMB 148.2 million ($21.7 million) in the third quarter of2009 and operating loss of RMB 121.1 million (a loss of $17.7 million)in the fourth quarter of 2008. Operating margin was 15.1% in the fourthquarter of 2009, compared with 11.2% in the third quarter of 2009 and-12.4% in the fourth quarter of 2008.

Earnings per diluted ADS in the fourthquarter of 2009 were RMB 0.94 ($0.14), compared with RMB 0.66 ($0.10)in the third quarter of 2009 and net loss per diluted ADS of RMB 0.68(a loss of $0.10) in the fourth quarter of 2008.

In the fourth quarter of 2009, theCompany generated operating cash flow of RMB 487.5 million ($71.4million) or RMB 2.87 ($0.42) per diluted ADS.

Fiscal Year 2009 Results

Fiscal year 2009 shipments were 509MW, an increase of 83.8%, from 277MW in 2008.

Total 2009 revenue was RMB 3.8 billion ($553.7 million) compared with RMB 5.5 billion ($799.6 million) in 2008.

Total gross profit in 2009 was RMB479.9 million ($70.3 million) or 12.7%, compared with RMB 992.0 million($145.3 million) or 18.2% in 2008. Operating income for 2009 was RMB91.5 million ($13.4 million), compared with RMB 692.0 million ($101.4million) in 2008. In 2009, net loss per diluted ADS was RMB 0.80 (aloss of $0.12), compared with net loss per diluted ADS of RMB 2.31 (aloss of $0.34) in 2008.

For fiscal year 2009, the Companygenerated an operating cash flow of RMB 766.2 million ($112.2 million)or RMB 4.5 ($0.66) per diluted ADS.

Liquidity

The Company maintained a strong balancesheet with cash and cash equivalents of RMB 1.9 billion ($273.6million), and total working capital of RMB 3.0 billion ($444.2 million)at December 31, 2009. Total long term bank borrowings was RMB 680million ($99.6 million) and convertible bonds outstanding was RMB 1.6billion ($228.2 million) at December 31, 2009.

Operations and Business Outlook

Research & Development Update

JASO has achieved an average conversionefficiency of 18.7% in R&D for its next-generation mono-crystallinesilicon PV cells with the designed device architecture compatible withcurrent production platform. Pilot production is expected by mid-year2010, with large-scale volume production anticipated by year-end 2010.

Manufacturing Capacity Expansion

To meet the high demand for its solarcell and module products, the JASO expects to achieve solar cellcapacity of 1.1GW by the end of 2010. The new solar cell capacity to beadded in 2010 will be “high-efficiency-enabled” for large volumemanufacturing of the company’s new high-efficiency solar cellarchitecture. Module capacity is expected to reach 300MW by year-end2010 to meet customer demand. Wafer capacity is expected to reach 120MWby year-end 2010.

First Quarter and Full Year 2010 Outlook

Based on robust customer demand for JASolar’s products and additional customer wins, the Company is raisingits outlook for the full year of 2010. The Company currently expectsshipments to exceed 900MW for 2010, compared with prior guidance in therange of 750MW to 800MW. Shipments in the first quarter of 2010 areexpected to be in the range of 215MW to 225MW.

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast among 18 polled investment analysts. Against the JA Solar Holdings Co., Ltd. company.

The 15 analysts offering 12-month price targets for JASO have amedian target of 6.00, with a high estimate of 7.50 and a low estimateof 4.00. The median estimate represents a 21.21% increase from the lastprice of 4.95.

Source: www.ft.com

No consensus analysis data available.

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=JASO.O

Investment Highlights

JASO in late January announced theappointment of Dr. Peng Fang as CEO, effective immediately. Mr. BaofangJin will remain in his role as executive chairman and will work closelywith Dr. Fang. Dr. Fang joins JA Solar with more than 20 years ofexecutive management experience with leading global technologycompanies in the solar and semiconductor industries in both the UnitedStates and China. Most recently, Dr. Fang was president of Best SolarCo., Ltd., where he turned a start-up company into an internationallyknown solar module company in just 18 months. Dr. Fang was formerlypresident of Huahong NEC, one of the largest semiconductor foundries inChina. Dr. Fang has also held various technology and managementpositions at Applied Materials and AMD in the United States. Dr. Fangreceived his Ph.D and MSEE degrees from the University of Minnesota. Hewas also a postdoctoral research fellow at the EECS Department of UCBerkeley. Dr. Fang was chairman of the IEEE Electron Devices Society,Santa Clara Valley Chapter.

Advanced silicon raw material purification technology:

Using JA Solar’s proprietary technologyto purify metallurgical grade silicon to make solar cells.Substantially upgraded silicon wafers produced by this technology areless expensive than those of electronic grade and makes it possible tomanufacture high quality silicon solar cells at low cost.

High?efficiency crystalline?based PV cells:

Using various innovative approaches todevelop crystalline silicon based solar cells with high conversionefficiency that can be mass produced in a cost?effective way.

Large?scale PV modules manufacturing technology based on the second generation cells:

Partnering with equipment vendors indeveloping JA Solar’s unique thin?film based solar cell/modulemanufacturing process in large scale yet at low cost.

Long?term research on more advanced third?generation PV technology:

Aims to decrease costs by significantlyincreasing efficiencies but maintaining the economic and environmentalcost advantages of thin film and nanostructure based technologies.

Source: http://www.jasolar.com/

Technical Analysis

Source: http://stockcharts.com

JASO is trading below its 50-daymoving average. However, this moving average is trending higher whichsuggests that there has been buying interest in this stock.

JASO is trading within its BollingerBands. This is a normal condition and suggests that the stock isneither overbought nor oversold relative to the recent price action.

JASO’s MACD is currently indicating aweak bullish signal. Although the MACD is trending above the signalline, the indicator is still below 0, which suggests that theunderlying moving averages are bearish.

Comparative Analysis

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

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