Volatile Solar Energy Market Experiences a Boom
What a great growth story. JA Solar Holdings Co, Ltd. (NASDAQ/JASO) just reported its second-quarter financial results, and they were over the top.
This Chinese company was founded in 2005 and is based in Ningjin, China. So far, its financial performance has been outstanding, and it’s no wonder the stock has been super-hot. If you’re a trader, note that this stock is highly liquid and it can move significantly (in both directions) during a trading session.
Like almost all China stocks listed on American stock exchanges, the company reports its figures in Renminbis and then coverts to U.S. dollars for reporting purposes.
According to the company, its revenues for the second quarter of 2007 were $60.0 million, up significantly from revenues of $12.6 million generated in the second quarter of 2006. Gross profit on those revenues was an impressive $14.5 million. Total gross margin was just over 24%. Net income for the second quarter of 2007 was a solid $9.9 million, as compared to net income of $2.3 million generated in the second quarter of 2006. The company finished the quarter with $205.7 million in cash and investments.
What’s moving the stock now is the fact that the company raised its production outlook for 2007 from approximately 100MW to 110MW. The company reported that this level of production should result in revenues for full-year 2007 of between $300 and $310 million. In 2008, revenues could double from 2007 levels.
Finally, the solar energy business is experiencing the boom that it always wanted. With the vast majority of solar energy components being made in China, prices for customers have come down significantly in recent years, and the efficiency of solar energy production keeps rising.
A stock like JA Solar Holdings is bound to be a volatile wealth- creator over the next several years. The stock is liquid and is a good trader to consider. Solar energy stocks aren’t going away. If you’re looking for growth, this is one of the best sectors to consider.