JA Solar (JASO), a Chinese manufacturer of silicon-based solar cells, reports Q2 earnings tomorrow, August 12th, before the open. While the stock has seen better days, AmTech still thinks it will more than double over the next year. Below, the firm gives a bevy of reasons to support its thesis:
- We believe ASPs [average selling prices] remained strong in 2Q08 (up 2-3%)
- Despite demand uncertainty as a result of ‘ 09 legislative concerns, we believe estimates for JASO remain low based on Si procurement levels and scheduled capacity ramp
- Early ‘ 09 ASP negotiations seem to be progressing well for JASO at down 5-10%. This is in-line to slightly better than we have been modelling, giving us further confidence in our ‘ 09 revenue estimates
- We believe that JASO’s balance sheet entering a period of legislative uncertainty is a significant advantage versus peers following its recent $400M convert
- We believe that all poly shipments are currently on schedule after some internal poly production delays at Shunda earlier in 2008 (covered by M. Setek supply)
- We expect management to increase FY08 shipment and revenue guidance given poly procurement levels and scheduled capacity ramp.
AmTech maintains BUY on JA Solar (JASO), target $35.
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