JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO) will hold a conference call on Monday, March 17, 2014, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing/Hong Kong Time), to discuss the Company's fourth quarter and full year 2013 results. The Company will release its fourth quarter and full year 2013 results before the market opens that same day.
Wall Street anticipates that the sun stock will earn $0.01 per share for the quarter, which is $2.66 more than last year's loss of $2.65 per share. iStock expects JASO to hit Wall Street's consensus number. The iEstimate is $0.01, too.
The big jump in EPS won't be matched with a corresponding hike ins sales, but analysts are forecasting a year-over-year (YoY) increase of 8.9%. The consensus revenue estimate for Q4 is $291.82 million, up from last year's $268.09 million.
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JA Solar Holdings Co., Ltd. (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. Its principal products are monocrystalline and multicrystalline solar cells, and it also manufacture a variety of standard and specialty solar modules.
JASO earnings history is pretty wild, with a range of missing by as much as -1700% to topping the consensus by 164.29% in the last 13 quarters. During the same timeframe, the solar company delivered eight bullish surprises and five bearish surprises. The average positive surprise was 34.95 more than forecasted while average miss was, whoa… 498.10 less than anticipated.
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Fear must be in the eye of shareholders when misses like that cross the ticker tape.
EPS-driven price-sensitivity turned the bullish v. bearish surprise ratio upside-down. JASO's price fell eight times, from as little as -0.08% to as much as -11.21% with an average loss of -7.37%. Meanwhile, the handful of sunny reactions averaged 20.86% (a whopping 68.98% gain skews the number) with a range of 2.12% to 68.98% as we mentioned already. Take out the outlier and the average slips to 8.83%.
Of late, the solar industry has been plagued by oversupply. In macro-econ 101 terms, more supply than demand, which everybody knows hurts prices and profits. Volume, in terms of megawatts delivered, can outrun revenue increases, as a result i.e. units delivered ramps big-time YoY, but prices fall and revenue increases are marginal – see 8.9% for JASO in Q4 2013 compared to Q4 2012.
Considering current overcapacity, it is iStock's opinion that investors will pay particular attention to JA Solar's forward guidance. Although the demand/supply equation is unfavorable at the moment, Shyam Mehta from greentechmedia.com says, "there are definite signs that at long last, balance between supply and demand in the PV market has not just been restored, but is beginning to trend in the opposite direction from the past few years -- with the very real possibility of a supply shortage in the offing. Once again, it is a reminder that when it comes to the PV market, the winds of change can blow very quickly."
In all likelihood, the rebalance will happen in the second half of 2014, which could coincide with JASO unleashing its conversion efficiency of over 19% for its multicrystalline silicon (multi-Si) solar cells for commercial manufacturing lines.
Overall: JA Solar Holdings Co., Ltd.'s (ADR) (NASDAQ:JASO) history suggests the odds favor a bullish surprise with the stock price backpedalling. However, if Shyam Mehta's analysis is correct, any correction might be a buying opportunity as the 2nd half of 2014 could be sunny for JASO and solar companies in general.
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