JASO Hits Back at U.S. Antidumping

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JA Solar Holdings Co. Ltd. (JASO) responded to the preliminary decision by the U.S. Department of Commerce, or DOC, on imposing antidumping duties on China-produced solar products.

According to the DOC's preliminary determination, announced on May 17, 2012, JA Solar's crystalline silicon photovoltaic cells produced in China, and modules containing such cells, which are imported to the U.S., would be subject to a preliminary antidumping tariff rate of 31.18%. The tariff decision is expected to be finalized in the fourth quarter of 2012.

JA Solar is disappointed by the DOC's decision. JA Solar believes that setting barriers in the U.S. market to fair global trade will penalize U.S. customers and hinder the growth of the U.S. solar industry.

JA Solar is one of the most cost-efficient solar producers in the world, with a geographically diverse customer base.  The company has silicon wafer supply agreements in place to feed its production. Positive factors include ongoing expansion programs, improving operating efficiencies, and higher conversion efficiency. JA Solar is steadily expanding its customer base worldwide in several geographic end markets including U.S., Canada, Italy, Japan, Australia, China and India.

By the end of fiscal 2011, JA Solar had an annual solar cell production capacity of 2.8GW and an annual module production capacity of 1.2GW. JA Solar intends to maintain its annualized solar cell capacity at 2.8GW in 2012. The company expects to achieve annualized solar module capacity of 1.7GW by the end of the second quarter of 2012 and 2GW by the end of fiscal 2012.

We currently have a long-term ‘Neutral’ recommendation on the JA Solar stock. In the near term, however, apprehensions over the tepid module demand in Europe, rising competition, wafer dependency, the financial stability of its customers and the oversupply of solar cells in the market will restrain the valuation of the company. Thus, for the short term, in line with its peer JinkoSolar Holding Co. Ltd. (JKS), the stock retains a Zacks #5 Rank (Strong Sell rating).

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