JA Solar Reports Third Quarter 2007 Results
* Total revenues for 3Q07 of RMB 850.0 million (US$ 113.4 million) compared to revenues of RMB 248.0 million (US$ 33.1 million) for 3Q06 * 3Q07 net income of RMB 3.55 (US$ 0.47) per diluted ADS compared to RMB 0.16 (US$ 0.02) per diluted ADS in 3Q06 * Based on demand forecasts the Company expects production capacity of 425 MW per annum by the end of 2008 * Company raises full year guidance and production outlook
HEBEI, China, Nov. 9, 2007 (PRIME NEWSWIRE) — JA Solar Holdings Co., Ltd. (“JA Solar”, “the Company”) (Nasdaq:JASO) today reported financial results for the third quarter ended September 30, 2007.
Third Quarter 2007 Results
Total revenues for the third quarter 2007 were RMB 850.0 million (US$ 113.4 million), compared to revenues of RMB 248.0 million (US$ 33.1 million) for the third quarter 2006, and RMB 457.0 million (US$ 61.0 million) for the second quarter 2007. The third quarter 2007 revenues included solar cell processing service revenue of RMB 41.8 million (US$ 5.6 million), compared to nil in the third quarter 2006 and RMB 26.2 million (US$ 3.5 million) in the second quarter 2007.
Total gross profit for the third quarter 2007 was RMB 199.3 million (US$ 26.6 million), including solar cell processing service profit of RMB 30.7 million (US$ 4.1 million). Total gross margin was 23.45% for the third quarter 2007, compared to 24.10% for the second quarter 2007. Excluding solar cell processing service gross profit, our gross margin was 20.87% in the third quarter 2007, compared to 20.96% in the second quarter 2007.
Net income available to ordinary shareholders for the third quarter 2007 was RMB 165.9 million (US$ 22.1 million) compared to a net income available to ordinary shareholders of RMB 4.1 million (US$ 0.55 million) for the third quarter 2006, and net income available to ordinary shareholders of RMB 75.7 million (US$ 10.1 million) for the second quarter 2007.
For the third quarter 2007 basic and diluted earnings per ADS were RMB 3.60 (US$ 0.48) and RMB 3.55 (US$ 0.47) respectively. Each ADS represents three of our ordinary shares.
The 2007 third quarter included share-based compensation expense of RMB 15.1 million (US$ 2.0 million), or RMB 0.32 (US$ 0.04) per diluted ADS.
Capital expenditures were RMB 144.3 million (US$ 19.3 million) in the third quarter 2007, as compared to RMB 47.4 million (US$ 6.3 million) in the second quarter 2007 and RMB 26.8 million (US$ 3.6 million) in the third quarter 2006. Depreciation and amortization expenses in the third quarter 2007 were RMB 10.7 million (US$ 1.4 million), as compared to RMB 6.3 million (US$ 0.8 million) in the second quarter 2007 and RMB 4.0 million (US$ 0.5 million) in the third quarter 2006. As of September 30, 2007, JA Solar had cash and cash equivalents of RMB 0.8 billion (US$ 106.0 million) compared with RMB 1.6 billion (US$ 209.0 million) at the end of the second quarter 2007. Short term debt remained at RMB 150.0 million (US$ 20.0 million) at the end of the third quarter 2007.
Set out below is a summary of megawatts produced and shipped (including processing service):
Three months ended ---------------------------------------------------------------- Megawatts September 30, 2006 June 30, 2007 September 30, 2007 --------- ------------------ ------------- ------------------ --------- ------------------ ------------- ------------------ Produced 9.7MW 22.6MW 44.6MW --------- ------------------ ------------- ------------------ --------- ------------------ ------------- ------------------ Shipped 9.2MW 24.0MW 43.8MW --------- ------------------ ------------- ------------------
The conversion of Renminbi into U.S. dollars in this release, made solely for the convenience of the reader, is based on the noon buying rate in The City of New York for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York as of September 28, 2007, which was RMB 7.4928 to US$ 1.0000. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on September 28, 2007, or at any other date. The percentages stated in this press release are calculated based on Renminbi.
Samuel Yang, JA Solar’s Chief Executive Officer, said, “We continue to successfully ramp the company’s sales growth, while executing our aggressive capacity expansion. In the third quarter we announced a series of important supply deals, and selectively strengthened our customer partnerships. We continue to gain confidence in our business and execution. In order to support the expected growth, we recently enhanced our operation, sales and marketing teams with the addition of several experienced executives.”
Herman Zhao, JA Solar’s Chief Financial Officer, said, “Gross margin was essentially steady, even though we incurred much higher operating costs to achieve our revenue growth in the third quarter 2007. In October 2007 we completed a follow-on offering of our ADR’s, with net proceeds of US$198 million. The additional proceeds have strengthened our balance sheet and given us added leverage in negotiating with suppliers and added confidence in executing our expansion plan.”
Company Raises Financial Outlook Based on current market conditions and customer forecasts, the Company is raising its production outlook to 120MW from 110MW for 2007. This would result in revenues for the full year of 2007 in the range of approximately RMB 2,398 million (US$ 320 million) to RMB 2,473 million (US$ 330 million) from prior guidance of RMB 2,248 million (US$ 300 million) to RMB 2,323 million (US$ 310 million). Gross margin is expected to be approximately 20.0%. Share-based compensation expense in the fourth quarter 2007 is expected to be approximately RMB 63.5 million (US$ 8.5 million). The increase in share-based compensation expense compared to third quarter 2007 is a result of stock options and restricted stock units granted to our new key executives that were hired in mid-September 2007. These newly granted option awards will vest over a four-year period.
Based on current demand we expect to reach production capacity of 425 MW per annum by the end of 2008, compared to our current 175 MW production capacity.
Investor Conference Call / Webcast Details
A conference call has been scheduled for 9:00 p.m. on Friday, November 9, 2007 (in Hebei). This will be 8:00 a.m. on Friday, November 9, in New York. During the call, time will be set-aside for analysts and interested investors to ask questions of executive officers.
The call may be accessed by dialing +1-201-689-8560. A live webcast of the conference call will be available on the Company’s website at www.jasolar.com. The playback will be available beginning two hours after the live call and will be accessible by dialing +1-201-612-7415. The account number to access the replay is 3055 and the pass code is 258808.
About JA Solar Holdings Co., Ltd.
Based in Hebei, China, JA Solar Holdings Co., Ltd. is an emerging and fast-growing manufacturer of high-performance solar cells. The Company sells its products to solar module manufacturers who assemble and integrate its solar cells into modules and systems that convert sunlight into electricity. For more information, please visit http://www.jasolar.com.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by words such as “will,”"may,”"expect,”"anticipate,”"aim,”"intend,”"plan,”"believe,”"estimate,”"potential,”"continue,” and other similar statements. Statements other than statements of historical facts in this announcement are forward-looking statements, including but not limited to, our expectations regarding the expansion of our manufacturing capacities, our future business development, and our beliefs regarding our production output and production outlook. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the Company and the industry. Further information regarding these and other risks is included in our registration statement on Form F-1 and other documents filed with the Securities and Exchange Commission. The Company undertakes no obligation to update forward-looking statements, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.
JA Solar Holdings Co., Ltd. Condensed Consolidated Statements of Operations (Unaudited) Three months ended ------------------------------------------------------ September 30, 2006 June 30, 2007 RMB USD RMB USD ------------ ------------ ------------ ------------ Revenue from sale of goods Solar cells to third parties 226,487,802 30,227,392 429,872,021 57,371,346 Solar cells to related parties 21,474,267 2,865,987 909,229 121,347 Solar cells processing -- -- 26,202,654 3,497,044 ------------ ------------ ------------ ------------ Total revenues 247,962,069 33,093,379 456,983,904 60,989,737 ------------ ------------ ------------ ------------ Cost of revenues Solar cells (182,883,659) (24,407,919) (340,498,142) (45,443,378) Solar cells processing -- -- (6,360,581) (848,892) ------------ ------------ ------------ ------------ Total cost of revenues (182,883,659) (24,407,919) (346,858,723) (46,292,270) ------------ ------------ ------------ ------------ Gross profit 65,078,410 8,685,460 110,125,181 14,697,467 ------------ ------------ ------------ ------------ Selling, general and administra- tive expenses (24,497,619) (3,269,488) (24,447,478) (3,262,796) Research and development expenses (393,384) (52,502) (709,269) (94,660) ------------ ------------ ------------ ------------ Total operating expenses (24,891,003) (3,321,990) (25,156,747) (3,357,456) ------------ ------------ ------------ ------------ Income from operations 40,187,407 5,363,470 84,968,434 11,340,011 Interest expense (1,057,834) (141,180) (961,102) (128,270) Interest income 317,303 42,348 19,901,549 2,656,090 Foreign exchange gain/(loss) 152,627 20,370 (30,310,479) (4,045,281) Other income -- -- 2,068,353 276,045 ------------ ------------ ------------ ------------ Income before income taxes 39,599,503 5,285,008 75,666,755 10,098,595 Income tax benefit/ (expense) -- -- -- -- ------------ ------------ ------------ ------------ Net income 39,599,503 5,285,008 75,666,755 10,098,595 ------------ ------------ ------------ ------------ Preferred shares accretion (489,600) (65,343) -- -- Preferred shares beneficial conversion charge (34,732,133) (4,635,401) -- -- Allocation of income to participating preferred shareholders (233,246) (31,129) -- -- ------------ ------------ ------------ ------------ Net income available to ordinary shareholders 4,144,524 553,135 75,666,755 10,098,595 ============ ============ ============ ============ Net income per ordinary shares Basic 0.052 0.007 0.547 0.073 Diluted 0.052 0.007 0.542 0.072 Weighted average number of ordinary shares outstanding: Basic 80,000,000 80,000,000 138,270,000 138,270,000 Diluted 80,000,000 80,000,000 139,496,802 139,496,802 Net income per ADS Basic 0.155 0.021 1.642 0.219 Diluted 0.155 0.021 1.627 0.217 Weighted average number of ADS outstanding: Basic 26,666,667 26,666,667 46,090,000 46,090,000 Diluted 26,666,667 26,666,667 46,498,934 46,498,934 Each ADS represents 3 ordinary shares September 30, 2007 RMB USD ------------ ------------ Revenue from sale of goods Solar cells to third parties 803,948,453 107,296,131 Solar cells to related parties 4,235,069 565,218 Solar cells processing 41,811,183 5,580,181 ------------ ------------ Total revenues 849,994,705 113,441,530 ------------ ------------ Cost of revenues Solar cells (639,550,780) (85,355,378) Solar cells processing (11,112,156) (1,483,045) ------------ ------------ Total cost of revenues (650,662,936) (86,838,423) ------------ ------------ Gross profit 199,331,769 26,603,107 ------------ ------------ Selling, general and administrative expenses (27,813,372) (3,712,013) Research and development expenses (1,109,276) (148,046) ------------ ------------ Total operating expenses (28,922,648) (3,860,059) ------------ ------------ Income from operations 170,409,121 22,743,048 Interest expense (1,321,305) (176,343) Interest income 13,992,625 1,867,476 Foreign exchange gain/ (loss) (18,952,072) (2,529,371) Other income 1,735,985 231,687 ------------ ------------ Income before income taxes 165,864,354 22,136,497 Income tax benefit/ (expense) -- -- ------------ ------------ Net income 165,864,354 22,136,497 ------------ ------------ Preferred shares accretion -- -- Preferred shares beneficial conversion charge -- -- Allocation of income to participating preferred shareholders -- -- ------------ ------------ Net income available to ordinary shareholders 165,864,354 22,136,497 ============ ============ Net income per ordinary shares Basic 1.200 0.160 Diluted 1.184 0.158 Weighted average number of ordinary shares outstanding: Basic 138,270,000 138,270,000 Diluted 140,095,013 140,095,013 Net income per ADS Basic 3.599 0.480 Diluted 3.552 0.474 Weighted average number of ADS outstanding: Basic 46,090,000 46,090,000 Diluted 46,698,338 46,698,338 Each ADS represents 3 ordinary shares JA Solar Holdings Co., Ltd. Condensed Consolidated Balance Sheets December 31, 2006 September 30, 2007 RMB USD RMB USD ------------- ------------- ------------- ------------- (Audited) (Conversion) (Unaudited) (Conversion) ------------- ------------- ------------- ------------- ASSETS Current assets Cash and cash equivalents 95,758,377 12,780,052 794,091,285 105,980,579 Accounts receivables from third party customers 47,719,752 6,368,748 120,650,789 16,102,230 Inventories 154,675,325 20,643,194 185,291,642 24,729,292 Value-added tax recoverable -- -- 9,863,205 1,316,358 Advances to related party suppliers 39,831,642 5,315,989 319,715,194 42,669,655 Advances to third party suppliers 1,608,765 214,708 541,229,919 72,233,334 Other current assets 6,673,976 890,719 37,545,565 5,010,886 ------------- ------------- ------------- ------------- Total current assets 346,267,837 46,213,410 2,008,387,599 268,042,334 ------------- ------------- ------------- ------------- Property and equipment, net 139,399,605 18,604,474 406,763,680 54,287,273 Intangible asset, net 7,224,713 964,221 6,771,102 903,681 Other long term assets- advance to third party suppliers -- -- 383,863,360 51,230,963 ------------- ------------- ------------- ------------- Total assets 492,892,155 65,782,105 2,805,785,741 374,464,251 ============= ============= ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Tax payables 3,639,665 485,755 -- -- Advances from third parties customers 21,329,609 2,846,681 134,286,106 17,922,019 Short-term bank borrowings 150,000,000 20,019,218 150,000,000 20,019,218 Accounts payable to third parties 2,501,790 333,893 8,034,044 1,072,235 Other payables to third parties 2,769,566 369,630 10,220,319 1,364,019 Payroll and welfare payable 2,676,854 357,257 4,587,014 612,190 Accrued expenses 3,932,709 524,865 11,378,964 1,518,653 Accounts payable to related parties 70,868 9,458 349,411 46,633 Other payable to related parties 183,555 24,498 340,523 45,447 ------------- ------------- ------------- ------------- Total current liabilities 187,104,616 24,971,255 319,196,381 42,600,414 ------------- ------------- ------------- ------------- Total liabilities 187,104,616 24,971,255 319,196,381 42,600,414 ------------- ------------- ------------- ------------- Preferred shares (US$0.0001 par value; 6,520,000 and 0 shares outstanding as of December 31, 2006 and September 30, 2007) 110,037,714 14,685,793 -- -- Shareholders' equity: Ordinary shares (US$0.0001 par value; 493,480,000 shares authorized, 80,000,000 and 138,270,000 shares issued and outstanding as of December 31, 2006 and September 30, 2007) 66,212 8,837 111,453 14,875 Additional paid-in capital 106,715,707 14,242,434 2,095,987,596 279,733,557 Statutory reserve 14,587,748 1,946,902 14,587,748 1,946,902 Retained earnings 74,380,158 9,926,884 375,902,563 50,168,503 ------------- ------------- ------------- ------------- Total shareholders' equity 195,749,825 26,125,057 2,486,589,360 331,863,837 ------------- ------------- ------------- ------------- Total liabilities and shareholders' equity 492,892,155 65,782,105 2,805,785,741 374,464,251 ============= ============= ============= =============
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CONTACT: In China JA Solar Herman Zhao, Chief Financial Officer +86-319-580-0867 In the U.S. The Ruth Group David Pasquale +1-646-536-7006 dpasquale@theruthgroup.com