JA Solar Still Shines Brightly

JA Solar Holdings Co. Ltd. (JASO) based in Ningjin of the Hebei province in the People’s Republic of China, manufactures high-performance, monocrystalline solar cells using processing technologies.

JASO registered a three-fold rise in revenues while its earnings jumped four-fold in the second quarter of 2008. Bullishness stems from strong global demand for its photovoltaic cells. Going forward, increasing demand for solar energy, improving production costs, coupled with ongoing capacity expansions and burgeoning committed supply of key raw materials, will continue to boost the cash-rich JASO’s growth story.

However, rising silicon wafer costs, and the company’s high R&D [research and development] expenses may put pressure on margins over the near-term. Accordingly, we maintain our Buy recommendation on JASO with a six-month target price of $10. Price appreciation to our near-term valuation target represents 66.7%% upside potential.

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