EX-99.1 2 a17-20844_1ex99d1.htm EX-99.1

Exhibit 99.1

 

JA Solar Announces Second Quarter 2017 Results

 

BEIJING, August 22, 2017— JA Solar Holdings Co., Ltd. (Nasdaq:JASO) (“JA Solar” or the “Company”), one of the world’s largest manufacturers of high-performance solar power products, today announced its unaudited financial results for its second quarter ended June 30, 2017.

 

Second Quarter 2017 Highlights

 

·                 Total shipments were 2,389.2 megawatts (“MW”), consisting of 2,147.5 MW of modules and 167.2 MW of cells to external customers, and 74.5 MW of modules to the Company’s downstream projects.  External shipments were up 88.3% y/y and 68.3% sequentially

 

·                 Shipments of modules were 2,147.5 MW, an increase of 89.3% y/y and 62.1% sequentially

 

·                 Shipments of cells were 167.2 MW, an increase of 75.8% y/y and 233.1% sequentially

 

·                 Net revenue was RMB 6.0 billion ($878.1 million), an increase of 44.7% y/y and 61.2% sequentially

 

·                 Gross margin was 12.9%, a decrease of 240 basis points y/y and an increase of 120 basis points sequentially

 

·                 Operating profit was RMB 255.1 million ($37.6 million), compared to RMB 188.0 million ($27.7 million) in the second quarter of 2016, and RMB 80.0 million ($11.8 million) in the first quarter of 2017

 

·                 Net income was RMB 134.6 million ($19.9 million), compared to RMB 164.1 million ($24.2 million) in the second quarter of 2016, and RMB 8.1 million ($1.2 million) in the first quarter of 2017

 

·                 Earnings per diluted ADS were RMB 2.87 or $0.42, compared to RMB 2.87 or $0.42 in the second quarter of 2016, and RMB 0.17 or $0.03 in the first quarter of 2017

 



 

·                 Cash and cash equivalents were RMB 3.2 billion ($477.0 million), an increase of RMB 947.6 million ($139.8 million) during the quarter

 

·                 Non-GAAP earnings1 per diluted ADS were RMB 2.87 or $0.42, compared to RMB 2.04 or $0.30 in the second quarter of 2016, and RMB 0.17 or $0.03 in the first quarter of 2017

 

Mr. Baofang Jin, Chairman and CEO of JA Solar, commented, “Second quarter results exceeded our expectations.  Robust shipments in China, primarily attributable to accelerated activity ahead of subsidy reductions, drove our year-over-year double-digit revenue growth in the quarter.  Additionally, better-than-expected average selling price and lower blended costs resulted in 120 basis-point sequential improvement in gross margin.”

 

Mr. Jin continued, “We remain cautious on our business outlook as we enter the second half of 2017, given the slowdown in demand in our domestic market, coupled with the uncertainty around the Section 201 trade case in the U.S.  While anticipated changes in incentives is expected to slow the Chinese market in the second half of the year, we continue to believe our balanced global footprint and flexible business model will enable us to adjust to evolving market conditions.  Our team remains focused on prudently managing our working capital, strengthening our balance sheet and executing our business strategy to provide our customers with high-quality products.”

 

All shipment and financial figures refer to the quarter ended June 30, 2017, unless otherwise specified.  All “year over year” or “y/y” comparisons are against the quarter ended June 30, 2016.  All “sequential” comparisons are against the quarter ended March 31, 2017.

 

Total shipments were 2,389.2 MW, well above the guidance of 1,550 to 1,650 MW. This is mainly due to stronger than expected pull-in orders from the China market. External shipments of 2,314.7 MW increased 88.3% year over year and 68.3% sequentially.

 

External shipments breakdown by product (MW)

 

 

 

2016Q2

 

2017Q1

 

2017Q2

 

QoQ%

 

YoY%

 

Modules and module tolling

 

1,134.2

 

1,325.1

 

2,147.5

 

62.1

%

89.3

%

Cells and cell tolling

 

95.1

 

50.2

 

167.2

 

233.1

%

75.8

%

Total

 

1,229.3

 

1,375.3

 

2,314.7

 

68.3

%

88.3

%

 


1  JA Solar adjusts net income attributable to the Company’s ordinary shareholders to exclude changes in fair value of certain warrants granted to certain investors in a registered direct offering (the “Offering”) closed on August 16, 2013.

 



 

External shipments breakdown by region (percentage)

 

 

 

2016Q2

 

2017Q1

 

2017Q2

 

QoQ(pp)

 

YoY(pp)

 

China

 

63.9

%

39.7

%

59.2

%

19.50

 

-4.70

 

APAC ex-China

 

12.0

%

44.2

%

24.9

%

-19.30

 

12.90

 

Europe

 

3.7

%

5.5

%

5.1

%

-0.40

 

1.40

 

North America

 

9.3

%

8.1

%

8.1

%

0

 

-1.20

 

South America

 

9.9

%

0.1

%

0.4

%

0.30

 

-9.50

 

Others

 

1.2

%

2.4

%

2.3

%

-0.10

 

1.10

 

 

Net revenue was RMB 6.0 billion ($878.1 million), an increase of 44.7% y/y and 61.2% sequentially.

 

Gross profit of RMB 770.8 million ($113.7 million) increased 22.7% y/y and 77.9% sequentially.  Gross margin was 12.9%, which compares to 15.3% in the year-ago quarter, and 11.7% in the first quarter of 2017.

 

Total operating expenses of RMB 515.7 million ($76.1 million) were 8.7% of revenue.  This compares to operating expenses of 10.7% of revenue in the year-ago quarter, and 9.6% of revenue in the first quarter of 2017.

 

Operating profit was RMB 255.1 million ($37.6 million), compared to RMB 188.0 million ($27.7 million) in the year-ago quarter, and RMB 80.0 million ($11.8 million) in the first quarter of 2017.  Operating margin was 4.3%, compared with 4.6% in the prior year period and 2.2% in the previous quarter.

 

Interest expense was RMB 82.6 million ($12.2 million), compared to RMB 68.8 million ($10.1 million) in the year-ago quarter, and RMB 83.3 million ($12.3 million) in the first quarter of 2017.

 

The change in fair value of warrant derivatives was nil, compared with positive RMB 47.4 million ($7.0 million) in the year-ago quarter, and nil in the first quarter of 2017. The warrants were issued on August 16, 2013 in conjunction with the Company’s $96 million registered direct offering, and expired on August 16, 2016. Earnings per diluted ADS were RMB 2.87 or $0.42, compared to earnings per diluted ADS of RMB 2.87 or $0.42 in the year-ago quarter, and earnings per diluted ADS of RMB 0.17 or $0.03 in the first quarter of 2017.

 



 

Liquidity

 

As of June 30, 2017, the Company had cash and cash equivalents of RMB 3.2 billion ($477.0 million), and total working capital of RMB 857.2 million ($126.5 million).  Total short-term borrowings were RMB 3.3 billion ($491.7 million). Total long-term borrowings were RMB 2.8 billion ($419.4 million), of which RMB 792.1 million ($116.8 million) were due in one year.

 

Business Outlook

 

For the third quarter of 2017, the Company expects total cell and module shipments to be in the range of 1,600 to 1,700 MW.  Nearly all will be external shipments.

 

For the full year 2017, the Company is raising its shipment outlook.  Total cell and module shipments are now expected to range between 6.5 and 7.0 GW, up from 6.0-6.5 GW in the prior guidance.  This includes 100-150 MW of module shipments to the Company’s downstream projects, down from 200-250 MW in the previous guidance.  Revenues will not be recognized for the modules shipped to the Company’s downstream projects as required by US GAAP.

 

Update on Yangzhou Facility Fire and Production Capacity

 

The Company provided an update regarding the July 13 fire at the Company’s cell production facility in Yangzhou, Jiangsu province. There were no injuries in the incident. The Company maintains insurance coverage for its production equipment and is in the process of filing insurance claims related to the incident. The cause of the fire remains under investigation.

 

The Company estimates loss in cell production capacity of 500 MW per annum as a result of the accident. Therefore, the Company expects its year-end cell capacity to be 6.5 GW, instead of the previous guidance of 7.0 GW. The Company now expects year-end module capacity to be 7.0 GW, instead of the previous guidance of 6.0 GW. Year-end wafer capacity guidance remains unchanged at 3.0 GW. The Company expects to restore the lost cell capacity by the first quarter of 2018.

 

All information regarding the impact of the fire is subject to change based on further evaluation and investigation.

 



 

Investor Conference Call / Webcast Details

 

JA Solar’s management will host an earnings conference call on August 22, 2017 at 8:00 a.m. U.S. Eastern Time (8:00 p.m. China Time).

 

Dial-in details for the earnings conference call are as follows:

 

 

Phone Number

Toll-Free Number

United States

+1 8456750437

+1 8665194004

Hong Kong

+852 30186771

+852 800906601

Mainland China

+86 8008190121
+86 4006208038

 

Other International

+65 67135090

 

 

Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is 66045523.

 

A replay of the conference call may be accessed by phone at the following numbers until August 30, 2017.  To access the replay, please reference the conference ID 66045523.

 

 

Phone Number

Toll-Free Number

United States

+1 6462543697

+1 8554525696

Hong Kong

+852 30512780

+852 800963117

Mainland China

+86 8008700206
+86 4006322162

 

Other International

+61 281990299

 

 

Currency Convenience Translation

 

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 June 30, 2017, which was RMB 6.7793 to $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 June 30, 2017, or at any other date. The percentages stated in this press release are calculated based on Renminbi.

 



 

Forward-looking Statements

 

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 “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 Form 20-F 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.

 

About JA Solar Holdings Co., Ltd.

 

JA Solar Holdings Co., Ltd. is a leading manufacturer of high-performance solar power products that convert sunlight into electricity for residential, commercial, and utility-scale power generation. The Company is one of the world’s largest producers of solar power products. Its standard and high-efficiency product offerings are among the most powerful and cost-effective in the industry. The Company distributes products under its own brand and also produces on behalf of its clients. The Company shipped 5.2 GW of solar power products in 2016. JA Solar is headquartered in Beijing, China, and maintains production facilities in Shanghai, Hebei, Jiangsu and Anhui provinces in China, as well as Penang, Malaysia and Bac Giang, Vietnam.

 

For more information, please visit www.jasolar.com.

 

Contact:

 

The Blueshirt Group

 

Ralph Fong

 

Phone: +1 (415) 489-2195

 

Email: ralph@blueshirtgroup.com

 



 

JA Solar Holdings Co., Ltd.

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

 

 

 

For three months ended

 

 

 

Jun. 30, 2016

 

Mar. 31, 2017

 

Jun. 30, 2017

 

Jun. 30, 2017

 

 

 

RMB’000

 

RMB’000

 

RMB’000

 

USD’000

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

4,113,592

 

3,692,405

 

5,953,211

 

878,145

 

Cost of sales

 

(3,485,300

)

(3,259,070

)

(5,182,372

)

(764,441

)

Gross profit

 

628,292

 

433,335

 

770,839

 

113,704

 

Selling, general and administrative expenses

 

(396,294

)

(312,858

)

(480,065

)

(70,813

)

Research and development expenses

 

(44,043

)

(40,460

)

(35,667

)

(5,261

)

Total operating expenses

 

(440,337

)

(353,318

)

(515,732

)

(76,074

)

Income from operations

 

187,955

 

80,017

 

255,107

 

37,630

 

Interest expense

 

(68,804

)

(83,274

)

(82,617

)

(12,187

)

Change in fair value of warrant derivatives

 

47,417

 

 

 

 

Other income, net

 

30,878

 

22,516

 

13,654

 

2,014

 

Income before income taxes

 

197,446

 

19,259

 

186,144

 

27,457

 

Income tax expense

 

(33,357

)

(11,136

)

(51,536

)

(7,602

)

Net income

 

164,089

 

8,123

 

134,608

 

19,855

 

Less: income attributable to noncontrolling interest

 

388

 

 

 

 

Net income attributable to JA Solar Holdings

 

163,701

 

8,123

 

134,608

 

19,855

 

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to ordinary shareholders:

 

 

 

 

 

 

 

 

 

Basic

 

0.57

 

0.03

 

0.57

 

0.08

 

Diluted

 

0.57

 

0.03

 

0.57

 

0.08

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

234,290,842

 

234,290,842

 

234,311,611

 

234,311,611

 

Diluted

 

234,443,142

 

234,300,567

 

234,333,946

 

234,333,946

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

 

 

 

 

 

 

 

 

Net income

 

164,089

 

8,123

 

134,608

 

19,855

 

Foreign currency translation adjustments, net of tax

 

(22,068

)

1,082

 

(786

)

(116

)

Other comprehensive loss

 

(22,068

)

1,082

 

(786

)

(116

)

Comprehensive income

 

142,021

 

9,205

 

133,822

 

19,739

 

Income attributable to noncontrolling interest

 

388

 

 

 

 

Comprehensive income attributable to JA Solar Holdings

 

141,633

 

9,205

 

133,822

 

19,739

 

 

 

 

 

 

 

 

 

 

 

NON-GAAP RECONCILIATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income attributable to JA Solar Holdings

 

163,701

 

8,123

 

134,608

 

19,855

 

Change in fair value of warrant derivatives

 

(47,417

)

 

 

 

Non-GAAP net income attributable to JA Solar Holdings

 

116,284

 

8,123

 

134,608

 

19,855

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share attributable to ordinary shareholders:

 

 

 

 

 

 

 

 

 

Basic

 

0.41

 

0.03

 

0.57

 

0.08

 

Diluted

 

0.41

 

0.03

 

0.57

 

0.08

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP weighted average number of shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

234,290,842

 

234,290,842

 

234,311,611

 

234,311,611

 

Diluted

 

234,443,142

 

234,300,567

 

234,333,946

 

234,333,946

 

 



 

JA Solar Holdings Co., Ltd.

Condensed Consolidated Statements of Operations

(Unaudited)

 

 

 

For six months ended

 

 

 

Jun. 30, 2016

 

Jun. 30, 2017

 

Jun. 30, 2017

 

 

 

RMB’000

 

RMB’000

 

USD’000

 

 

 

 

 

 

 

 

 

Net revenues

 

7,583,306

 

9,645,616

 

1,422,804

 

Cost of sales

 

(6,379,652

)

(8,441,442

)

(1,245,179

)

Gross profit

 

1,203,654

 

1,204,174

 

177,625

 

Selling, general and administrative expenses

 

(708,769

)

(792,923

)

(116,962

)

Research and development expenses

 

(83,642

)

(76,127

)

(11,229

)

Total operating expenses

 

(792,411

)

(869,050

)

(128,191

)

Income from operations

 

411,243

 

335,124

 

49,434

 

Interest expense

 

(136,077

)

(165,891

)

(24,470

)

Change in fair value of warrant derivatives

 

70,864

 

 

 

Other income, net

 

47,159

 

36,170

 

5,335

 

Income before income taxes

 

393,189

 

205,403

 

30,299

 

Income tax expenses

 

(71,126

)

(62,672

)

(9,245

)

Net income

 

322,063

 

142,731

 

21,054

 

Less: income/(loss) attributable to noncontrolling interest

 

1,705

 

 

 

Net income attributable to JA Solar Holdings

 

320,358

 

142,731

 

21,054

 

 

 

 

 

 

 

 

 

Net income per share attributable to ordinary shareholders:

 

 

 

 

 

 

 

Basic

 

1.12

 

0.61

 

0.09

 

Diluted

 

1.12

 

0.61

 

0.09

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

Basic

 

234,290,842

 

234,301,342

 

234,301,342

 

Diluted

 

234,482,552

 

234,317,372

 

234,317,372

 

 

 

 

 

 

 

 

 

Comprehensive income

 

 

 

 

 

 

 

Net income

 

322,063

 

142,731

 

21,054

 

Foreign currency translation adjustments, net of tax

 

(22,208

)

296

 

43

 

Other comprehensive loss

 

(22,208

)

296

 

43

 

Comprehensive income

 

299,855

 

143,027

 

21,097

 

Income/(loss) attributable to noncontrolling interest

 

1,705

 

 

 

Comprehensive income attributable to JA Solar Holdings

 

298,150

 

143,027

 

21,097

 

 

 

 

 

 

 

 

 

NON-GAAP RECONCILIATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income attributable to JA Solar Holdings

 

320,358

 

142,731

 

21,054

 

Change in fair value of warrant derivatives

 

(70,864

)

 

 

Non-GAAP net income attributable to JA Solar Holdings

 

249,494

 

142,731

 

21,054

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share attributable to ordinary shareholders:

 

 

 

 

 

 

 

Basic

 

0.87

 

0.61

 

0.09

 

Diluted

 

0.87

 

0.61

 

0.09

 

 

 

 

 

 

 

 

 

Non-GAAP weighted average number of shares outstanding:

 

 

 

 

 

 

 

Basic

 

234,290,842

 

234,301,342

 

234,301,342

 

Diluted

 

234,482,552

 

234,317,372

 

234,317,372

 

 



 

JA Solar Holdings Co., Ltd.

Condensed Consolidated Balance Sheets

(Unaudited)

 

 

 

Dec. 31,

 

Jun. 30,

 

 

 

2016

 

2017

 

2017

 

 

 

RMB’000

 

RMB’000

 

USD’000

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

2,569,402

 

3,233,663

 

476,991

 

Restricted cash

 

836,761

 

1,137,672

 

167,816

 

Accounts receivable

 

2,753,678

 

3,063,867

 

451,945

 

Notes receivable

 

563,144

 

473,661

 

69,869

 

Inventories

 

2,460,488

 

2,431,682

 

358,692

 

Advances to suppliers

 

282,369

 

267,858

 

39,511

 

Other current assets

 

799,314

 

552,080

 

81,436

 

Total current assets

 

10,265,156

 

11,160,483

 

1,646,260

 

Property and equipment, net

 

5,219,501

 

5,595,275

 

825,347

 

Project asset

 

2,338,648

 

2,671,375

 

394,049

 

Advances to suppliers

 

97,429

 

56,538

 

8,340

 

Prepaid land use rights

 

524,208

 

531,723

 

78,433

 

Long-term investment

 

69,022

 

71,717

 

10,579

 

Other long term assets

 

517,292

 

700,988

 

103,401

 

Total assets

 

19,031,256

 

20,788,099

 

3,066,409

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Short-term borrowings

 

2,912,866

 

3,333,565

 

491,727

 

Accounts payable

 

2,635,525

 

3,406,588

 

502,499

 

Advances from customers

 

610,718

 

1,072,069

 

158,139

 

Current portion of long term borrowings

 

525,256

 

792,123

 

116,844

 

Accrued and other liabilities

 

1,966,475

 

1,698,903

 

250,601

 

Total current liabilities

 

8,650,840

 

10,303,248

 

1,519,810

 

Long-term borrowings

 

2,701,438

 

2,050,914

 

302,526

 

Other long term liabilities

 

1,217,648

 

1,829,175

 

269,818

 

Total liabilities

 

12,569,926

 

14,183,337

 

2,092,154

 

Total JA Solar Holdings shareholders’ equity

 

6,461,130

 

6,604,562

 

974,225

 

Noncontrolling interest

 

200

 

200

 

30

 

Total shareholders’ equity

 

6,461,330

 

6,604,762

 

974,255

 

Total liabilities and shareholders’ equity

 

19,031,256

 

20,788,099

 

3,066,409