AmTech is encouraged by JA Solar’s (JASO) limited political and supply risk as well as their R&D efforts.
AmTech Is not worried about Spain subsidy cuts:
JASO is currently sold out of its production targets for ‘ 08 at fixed prices, which we believe limits legislative risk associated with Spain in 3Q08 and 4Q08.
JASO won’t be running out of raw material any time soon:
It is clear the company continues to be significantly over-procured in terms of raw materials supply for 2008 and 2009, a key differentiator from its peers. JASO now has 440MW of poly procured for 2008 and 800MW+ procured for 2009. Our production estimates for ’08 and ’09 are ~20% below these procurement levels, which we believe could prove to be conservative.
AmTech is also encouraged by JASO’s commitment to R&D:
We also believe JASO continues to be much more focused on R&D than its Chinese domestic competitors despite historical spending levels. We think the company is actively pursuing moving upstream into wafer manufacturing, as well as thin-film module production through R&D efforts in Northern California .
AmTech reiterates BUY, target $35.