JA Solar Reports Fourth Quarter and Full Year 2007 Results
Fourth Quarter 2007 Highlights * Revenue of RMB 1.05 billion (US$ 144.2 million), an increase of 201.0% over Q4 2006 * Income from operations of RMB 132.9 million (US$ 18.2 million), an increase of 79.3% over Q4 2006 * Total gross profit of RMB 222.7 million (US$ 30.5 million) compared to RMB 83.7 million (US$ 11.5 million) in Q4 2006 * Gross margin was 21.2% compared to 23.9% in Q4 2006 * Net income of RMB 0.64 (US$ 0.09) per diluted ADS, which included a foreign exchange loss of RMB 57.3 million (US$ 7.9 million) compared to RMB 0.82 (US$ 0.11) per diluted ADS, which included a foreign exchange gain of RMB 1.0 million (US$ 0.1 million) in Q4 2006 * Shipped 50.2 MW, up 266.4%over Q4 2006 Full Year 2007 Highlights * Full year 2007 revenues of RMB 2.69 billion (US$ 369.3 million), an increase of 286.8% over 2006 * Income from operations of RMB 446.4 million (US$ 61.2 million), an increase of 240.0% over 2006 * Total gross profit of RMB 600.9 million (US$ 82.4 million) compared to RMB 172.3 million (US$ 23.6 million) in 2006 * Gross margin was 22.3% compared to 24.7% in 2006 * Net income of RMB 2.93 (US$ 0.40) per diluted ADS compared to RMB 1.08 (US$ 0.15) per diluted ADS for the full year 2006 * Shipped 132.4 MW in 2007, an increase of 403.4% from 2006 * Increased annual manufacturing capacity from 75MW to 175MW Outlook for 2008 * Expect Full Year 2008 revenues in the range of RMB 7.22 billion (US$ 990.0 million) to RMB 8.02 billion (US$ 1.10 billion) * Expect 2008 gross margin to be above 20% * Expect to break ground on new solar cell manufacturing facility in Yangzhou, China during second half 2008 * Raising annual production capacity to 500 MW from 425 MW by the end of 2008 * Expect 2008 production output of 340 MW
HEBEI, China, March 12, 2008 (PRIME NEWSWIRE) — JA Solar Holdings Co., Ltd. (“JA Solar”, “the Company”) (Nasdaq:JASO) today reported financial results for the fourth quarter and year ended December 31, 2007.
Fourth Quarter 2007 Results
Total revenues for the fourth quarter 2007 were RMB 1.05 billion (US$ 144.2 million), an increase of 201.0% from fourth quarter 2006 quarter revenues of RMB 349.4 million (US$ 47.9 million), and an increase of 23.7% from third quarter 2007 revenues of RMB 850.0 million (US$ 116.5 million).
Total gross profit for the fourth quarter 2007 was RMB 222.7 million (US$ 30.5 million) compared to RMB 83.7 million (US$ 11.5 million) in the fourth quarter 2006, and RMB 199.3 million (US$ 27.3 million) in the third quarter 2007. Gross margin was 21.2% in the fourth quarter of 2007 compared to 23.9% in the fourth quarter of 2006, and 23.5% in the third quarter of 2007.
Net income available to ordinary shareholders for the fourth quarter 2007 was RMB 98.3 million (US$ 13.5 million) compared to a net income available to ordinary shareholders of RMB 66.9 million (US$ 9.2 million) for the fourth quarter 2006, and net income available to ordinary shareholders of RMB 165.9 million (US$ 22.7 million) for the third quarter 2007.
For the fourth quarter 2007 basic and diluted earnings per ADS were RMB 0.65 (US$ 0.09) and RMB 0.64 (US$ 0.09), respectively. The fourth quarter 2007 included share-based compensation expense of RMB 61.2 million (US$ 8.4 million) and foreign exchange loss of RMB 57.3 million (US$ 7.9 million).
Capital expenditures were RMB 128.9 million (US$ 17.7 million) in the fourth quarter 2007, as compared to RMB 23.6 million (US$ 3.2 million) in the fourth quarter 2006, and RMB 144.3 million (US$ 19.8 million) in the third quarter 2007. Depreciation and amortization expenses in the fourth quarter 2007 were RMB 11.9 million (US$ 1.6 million), as compared to RMB 4.9 million (US$ 0.7 million) in the fourth quarter 2006, and RMB 10.7 million (US$ 1.5 million) in the third quarter 2007.
As of December 31, 2007, JA Solar had cash and cash equivalents of RMB 1.15 billion (US$ 157.0 million) compared with RMB 95.8 million (US$ 13.1 million) at the end of the fourth quarter 2006, and RMB 0.79 billion (US$ 108.9 million) at the end of the third quarter 2007. Short term debt increased to RMB 200.0 million (US$ 27.4 million) at the end of the fourth quarter 2007 from RMB 150.0 million (US$ 20.6 million) at the end of the fourth quarter 2006, and RMB 150.0 million (US$ 20.6 million) at the end of third quarter 2007.
Summary of megawatts produced and shipped (includes cell processing service)
--------------------------------------------------------------- Three months ended --------------------------------------------------------------- Dec. 31, Sept. 30, Dec. 31, Megawatts 2006 2007 2007 --------------------------------------------------------------- Produced 17.1MW 44.6MW 48.7MW --------------------------------------------------------------- Shipped 13.7MW 43.8MW 50.2MW --------------------------------------------------------------- Cost per watt excluding wafer cost US$0.228/Wp US$ 0.192/Wp US$ 0.190/Wp ---------------------------------------------------------------
2007 Full Year Results
Revenues for the full year 2007 were RMB 2.69 billion (US$ 369.3 million), an increase of 286.8% from the full year 2006 revenues of RMB 696.5 million (US$ 95.5 million). The increase was principally due to continued strong growth in market demand for PV industry and our ability to expand the Company’s production capacity to support the business growth.
Total gross profit for 2007 was RMB 600.9 million (US$ 82.4 million) compared to RMB 172.3 million (US$ 23.6 million). Total gross margin was 22.3% for 2007 compared to 24.7% for 2006.
Net income available to ordinary shareholders for the full year 2007 was RMB 398.2 million (US$ 54.6 million) compared to a net income available to ordinary shareholders of RMB 86.4 million (US$ 11.8 million) for the full year 2006.
For the full year 2007 basic and diluted earnings per ADS were RMB 2.96 (US$ 0.41) and RMB 2.93 (US$ 0.40), respectively.
The full year 2007 included share-based compensation expense of RMB 88.8 million (US$ 12.2 million) and foreign exchange loss of RMB 112.8 million (US$ 15.5 million).Diluted earnings per ADS calculations for the full year 2007 were based on 136.72 million weighted average numbers of ADSs outstanding, compared to 80.17 million ADSs in 2006.
Capital expenditures were RMB 421.8 million (US$ 57.8 million) for the full year 2007, as compared to RMB 107.6 million (US$ 14.8 million) for the full year 2006. The increase was primarily due to expanding of new production capacity. Depreciation and amortization expenses for the full year 2007 were RMB 34.1 million (US$ 4.7 million), as compared to RMB 11.2 million (US$ 1.5 million) for the full year 2006.
Effective from February 7, 2008, the Company changed its ADS to ordinary share ratio from the one ADS for every three ordinary shares to one ADS for every one ordinary share. Both the basic and diluted earnings per ADS and both the basic and diluted weighted average number of ADSs outstanding for all periods presented have been restated to conform to the current ADS ratio accordingly.
The conversion of Renminbi into U.S. dollars for the full year of 2007 and the fourth quarter of 2007 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 December 31, 2007, which was RMB 7.2946 to US$1.00. 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 December 31, 2007, or at any other date. The percentages stated in this press release are calculated based on Renminbi.
“We once again achieved record revenues in the fourth quarter of 2007 and extraordinary business growth for the full year,” said Samuel Yang, JA Solar’s Chief Executive Officer. “During the year, we increased our annual production capacity from 75MW to 175MW, and achieved impressive throughput and yield from our cell lines without compromising profitability. The several key additions in talent to our teams in sales and marketing, technology, and at the executive level helped ensure the smooth execution of our expansion. Our strategic decision to expand our supply sources and our practice of holding JA Solar’s products to one of the highest performance standards in the industry were also contributing factors to our success. On the supply side, we were able to expand our base of major suppliers from two to four and contractually secured sufficient wafer supply to cover our anticipated 2008 production capacity.”
“In 2008 we plan to build on JA Solar’s strong brand and technology platform through increased sales and marketing efforts, greater investment in R&D, and continued expansion of our production capacity. We have already broken ground for ten new cell lines in Hebei, and plan to break ground for another ten cell lines at a new facility in Yangzhou during the second half of 2008. On the technology front, we plan to open a research laboratory in Silicon Valley, California. We believe the true driving force for broader application of solar technology and the achievement of grid parity is low cost. By 2010, JA Solar strives to be a cost leader in the industry and establish the industry cost benchmark through technical innovation and operational efficiency. We have enormous confidence that our production scale and execution capability would position JA Solar to achieve aggressive cost reductions as we address a rapidly evolving market.”
JA Solar’s CFO, Herman Zhao, said, “In 2007 JA Solar demonstrated our financial discipline through the ability to more than double our annual production capacity while achieving impressive top line growth and profitability. While our performance was strong in Q4, we experienced foreign exchange losses in the quarter, which impacted our bottom line. Due to the depreciation of the U.S. dollar against the RMB in Q4, we recorded foreign exchange losses of RMB 57.3 million (US$ 7.9 million) for the quarter. Going forward we plan to manage the foreign exchange impact to our bottom line through focused initiatives which involve converting foreign currencies into RMB, currency hedging, diversification of our international supplier base, and the addition of pricing clauses in our international sales contracts. While the economic environment is expected to remain volatile, we expect another record year for our Company in terms of growth and profitability in 2008. We are fully committed to bringing further value to our shareholders in 2008 and future years.”
2008 Outlook
Based on current customer demand and market forecasts, we expect revenues for the full year 2008 in the range of RMB 7.22 billion (US$ 990.0 million) to RMB 8.02 billion (US$ 1.10 billion). Gross margins for 2008 are expected to be above 20%.
We expect total production output of approximately 340MW for 2008, with a total annual production capacity of 500MW, which is above our previous annual production capacity guidance of 425MW.
The capital expenditures are expected to be RMB 966.8 million (US$ 132.5 million), primarily for capacity expansion. R&D expense is expected to be RMB 36.6 million (US$ 5.0 million).
Investor Conference Call / Webcast Details
A conference call has been scheduled for 8:30p.m. on Wednesday, March 12, 2007 (in Hebei), which will be 8:30a.m. on Wednesday, March 12 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 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 201-612-7415. The account number to access the replay is 3055 and the pass code is 275768.
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.
Forward-looking 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 ---------------------------------------------------- December 31, 2006 September 30, 2007 RMB USD RMB USD ---------------------------------------------------- Revenue from sale of goods Solar products to third parties 309,618,090 42,444,835 803,948,453 110,211,451 Solar products to related parties 39,785,881 5,454,155 4,235,069 580,576 Solar cells processing -- -- 41,811,183 5,731,799 ------------ ----------- ------------ ------------ Total revenues 349,403,971 47,898,990 849,994,705 116,523,826 ------------ ----------- ------------ ------------ Cost of revenues Solar products (265,733,652) (36,428,817) (639,550,780) (87,674,551) Solar cells processing -- -- (11,112,156) (1,523,340) ------------ ----------- ------------ ------------ Total cost of revenues (265,733,652) (36,428,817) (650,662,936) (89,197,891) ------------ ----------- ------------ ------------ Gross profit 83,670,319 11,470,173 199,331,769 27,325,935 ------------ ----------- ------------ ------------ Selling, general and administrative expenses (8,886,291) (1,218,201) (27,813,372) (3,812,871) Research and development expenses (645,732) (88,522) (1,109,276) (152,068) ------------ ----------- ------------ ------------ Total operating expenses (9,532,023) (1,306,723) (28,922,648) (3,964,939) ------------ ----------- ------------ ------------ Income from operations 74,138,296 10,163,450 170,409,121 23,360,996 Interest expense (2,219,396) (304,252) (1,321,305) (181,135) Interest income 398,977 54,695 13,992,625 1,918,217 Other income 64,414 8,830 1,735,985 237,982 Foreign exchange gain/(loss) 1,043,758 143,086 (18,952,072) (2,598,096) ------------ ----------- ------------ ------------ Income before income taxes 73,426,049 10,065,809 165,864,354 22,737,964 Income tax benefit/ (expense) -- -- -- -- ------------ ----------- ------------ ------------ Net income 73,426,049 10,065,809 165,864,354 22,737,964 ------------ ----------- ------------ ------------ Preferred shares accretion (1,113,799) (152,688) -- -- Preferred shares beneficial conversion charge -- -- -- -- Allocation of income to participating preferred shareholders (5,449,328) (747,036) -- -- ------------ ----------- ------------ ------------ Net income available to ordinary shareholders 66,862,922 9,166,085 165,864,354 22,737,964 ============ =========== ============ ============ Net income per ordinary shares Basic 0.84 0.11 1.20 0.16 Diluted 0.82 0.11 1.18 0.16 Weighted average number of ordinary shares outstanding: Basic 80,000,000 80,000,000 138,270,000 138,270,000 Diluted 89,803,092 89,803,092 140,095,013 140,095,013 Net income per ADS Basic 0.84 0.11 1.20 0.16 Diluted 0.82 0.11 1.18 0.16 Weighted average number of ADS outstanding: Basic 80,000,000 80,000,000 138,270,000 138,270,000 Diluted 89,803,092 89,803,092 140,095,013 140,095,013 -------------------------------- December 31, 2007 RMB USD -------------------------------- Revenue from sale of goods Solar products to third parties 964,043,903 132,158,570 Solar products to related parties 56,581,075 7,756,570 Solar cells processing 30,946,942 4,242,445 -------------- ------------ Total revenues 1,051,571,920 144,157,585 -------------- ------------ Cost of revenues Solar products (820,159,946) (112,433,848) Solar cells processing (8,715,419) (1,194,777) -------------- ------------ Total cost of revenues (828,875,365) (113,628,625) -------------- ------------ Gross profit 222,696,555 30,528,960 -------------- ------------ Selling, general and administrative expenses (88,286,415) (12,102,982) Research and development expenses (1,461,299) (200,326) -------------- ------------ Total operating expenses (89,747,714) (12,303,308) -------------- ------------ Income from operations 132,948,841 18,225,652 Interest expense (1,497,516) (205,291) Interest income 17,193,244 2,356,982 Other income 1,421,231 194,833 Foreign exchange gain/(loss) (57,304,623) (7,855,759) -------------- ------------ Income before income taxes 92,761,177 12,716,417 Income tax benefit/(expense) 5,569,615 763,526 -------------- ------------ Net income 98,330,792 13,479,943 -------------- ------------ Preferred shares accretion -- -- Preferred shares beneficial conversion charge -- -- Allocation of income to participating preferred shareholders -- -- -------------- ------------ Net income available to ordinary shareholders 98,330,792 13,479,943 ============== ============ Net income per ordinary shares Basic 0.65 0.09 Diluted 0.64 0.09 Weighted average number of ordinary shares outstanding: Basic 150,794,647 150,794,647 Diluted 152,508,160 152,508,160 Net income per ADS Basic 0.65 0.09 Diluted 0.64 0.09 Weighted average number of ADS outstanding: Basic 150,794,647 150,794,647 Diluted 152,508,160 152,508,160 Each ADS represents 1 ordinary share JA Solar Holdings Co., Ltd. Condensed Consolidated Statements of Operations Year ended ------------------------------------------------------ December 31, 2006 December 31, 2007 RMB USD RMB USD ------------------------------------------------------ (Audited) (Conversion) (Unaudited) (Conversion) ------------------------------------------------------ Revenue from sale of goods Solar products to third parties 565,327,330 77,499,428 2,532,417,761 347,163,348 Solar products to related parties 131,130,774 17,976,417 62,205,840 8,527,656 Solar cells processing -- -- 99,076,635 13,582,189 ------------ ----------- -------------- ----------- Total revenues 696,458,104 95,475,845 2,693,700,236 369,273,193 ------------ ----------- -------------- ----------- Cost of revenues Solar products (524,163,013) (71,856,306) (2,066,559,465) 283,299,902) Solar cells processing -- -- (26,232,337) (3,596,131) ------------ ----------- -------------- ----------- Total cost of revenues (524,163,013) (71,856,306) (2,092,791,802) (286,896,033) ------------ ----------- -------------- ----------- Gross profit 172,295,091 23,619,539 600,908,434 82,377,160 ------------ ----------- -------------- ----------- Selling, general and admini- strative expenses (39,656,083) (5,436,361) (150,319,332) (20,606,933) Research and development expenses (1,357,610) (186,112) (4,200,013) (575,770) ------------ ----------- -------------- ----------- Total operating expenses (41,013,693) (5,622,473) (154,519,345) (21,182,703) ------------ ----------- -------------- ----------- Income from operations 131,281,398 17,997,066 446,389,089 61,194,457 Interest expense (5,055,382) (693,031) (6,595,460) (904,156) Interest income 823,995 112,960 62,579,521 8,578,883 Other income 64,414 8,830 5,225,569 716,361 Foreign exchange gain/ (loss) 1,300,008 178,215 (112,799,886) (15,463,478) ------------ ----------- -------------- ----------- Income before income taxes 128,414,433 17,604,040 394,798,833 54,122,067 Income tax benefit/ (expense) -- -- 5,569,615 763,526 ------------ ----------- -------------- ----------- Net income 128,414,433 17,604,040 400,368,448 54,885,593 ------------ ----------- -------------- ----------- Preferred shares accretion (1,603,399) (219,806) (515,251) (70,635) Preferred shares beneficial conversion charge (34,732,133) (4,761,349) -- -- Allocation of income to participating preferred share- holders (5,682,574) (779,010) (1,648,040) (225,926) ------------ ----------- -------------- ----------- Net income available to ordinary share- holders 86,396,327 11,843,875 398,205,157 54,589,032 ============ =========== ============== =========== Net income per ordinary shares Basic 1.08 0.15 2.96 0.41 Diluted 1.08 0.15 2.93 0.40 Weighted average number of ordinary shares outstanding: Basic 80,000,000 80,000,000 134,525,226 134,525,226 Diluted 80,166,178 80,166,178 136,721,772 136,721,772 Net income per ADS Basic 1.08 0.15 2.96 0.41 Diluted 1.08 0.15 2.93 0.40 Weighted average number of ADS outstanding: Basic 80,000,000 80,000,000 134,525,226 134,525,226 Diluted 80,166,178 80,166,178 136,721,772 136,721,772 Each ADS represents 1 ordinary share JA Solar Holdings Co., Ltd. Condensed Consolidated Balance Sheets December 31, 2006 December 31, 2007 RMB USD RMB USD ----------------------------------------------------- (Audited) (Conversion) (Unaudited) (Conversion) ----------------------------------------------------- ASSETS Current assets Cash and cash equivalents 95,758,377 13,127,296 1,145,032,918 156,969,939 Available- for-sale securities -- -- 803,121,383 110,098,070 Accounts receivables from third party customers 47,719,752 6,541,791 28,819,554 3,950,807 Accounts receivables from related party customers -- -- 24,730,689 3,390,273 Inventories 154,675,325 21,204,086 157,334,310 21,568,600 Advances to related party suppliers 39,831,642 5,460,429 389,871,684 53,446,616 Advances to third party suppliers 1,608,765 220,542 898,722,659 123,203,830 Other current assets 6,673,976 914,920 42,315,074 5,800,877 Deferred tax assets -- -- 1,214,246 166,458 ----------- ---------- ------------- ----------- Total current assets 346,267,837 47,469,064 3,491,162,517 478,595,470 ----------- ---------- ------------- ----------- Property and equipment, net 139,399,605 19,109,972 532,011,999 72,932,306 Intangible asset, net 7,224,713 990,419 6,687,677 916,798 Deferred tax assets -- -- 4,355,369 597,068 Other long term assets -advance to suppliers -- -- 536,332,174 73,524,549 ----------- ---------- ------------- ----------- Total assets 492,892,155 67,569,455 4,570,549,736 626,566,191 =========== ========== ============= =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Value-added tax payables 3,639,665 498,953 342,025 46,887 Advances from third parties customers 21,329,609 2,924,027 70,285,896 9,635,332 Short-term bank borrowings 150,000,000 20,563,156 200,000,000 27,417,542 Accounts payable to third parties 2,501,790 342,965 10,119,234 1,387,223 Other payables to third parties 2,769,566 379,673 16,841,500 2,308,763 Payroll and welfare payable 2,676,854 366,964 6,364,403 872,481 Accrued expenses 3,932,709 539,126 15,279,750 2,094,666 Accounts payable to related parties 70,868 9,715 70,816 9,708 Other payable to related parties 183,555 25,163 113,819,404 15,603,241 ----------- ---------- ------------- ----------- Total current liabilities 187,104,616 25,649,742 433,123,028 59,375,843 ----------- ---------- ------------- ----------- Accrued warranty cost -- -- 929,170 127,378 ----------- ---------- ------------- ----------- Total liabilities 187,104,616 25,649,742 434,052,198 59,503,221 ----------- ---------- ------------- ----------- Commitment and Contin- gencies -- -- -- -- ----------- ---------- ------------- ----------- Shareholders' equity: Preferred shares (US$0.0001 par value; 6,520,000 and 0 shares outstanding as of December 31, 2006 and December 31 2007) 110,037,714 15,084,818 -- -- Ordinary shares (US$0.0001 par value; 493,480,000 shares authorized, 80,000,000 and 154,058,500 shares issued and outstanding as of December 31, 2006 and December 31, 2007) 66,212 9,077 123,307 16,904 Additional paid-in capital 106,715,707 14,629,412 3,655,194,120 501,082,187 Statutory reserve 14,587,748 1,999,801 71,617,912 9,817,935 Accumulated earnings 74,380,158 10,196,605 417,203,191 57,193,430 Accumulated other comprehen- sive income -- -- (7,640,992) (1,047,486) ----------- ---------- ------------- ----------- Total shareholders' equity 195,749,825 26,834,895 4,136,497,538 567,062,970 ----------- ---------- ------------- ----------- Total liabilities and shareholders' equity 492,892,155 67,569,455 4,570,549,736 626,566,191 =========== ========== ============= ===========
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CONTACT: In China JA Solar Herman Zhao, Chief Financial Officer +86-21-6095-5896 In the U.S. The Ruth Group Gerrard Lobo +1-646-536-7023 globo@theruthgroup.com