JASO JA Solar Holdings, Co., Ltd. ADS, Each Representing Five Ordinary Shares (delisted)

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 third quarter ended September 30, 2016.

Third Quarter 2016 Highlights

• Total shipments were 1,240.9 megawatts (“MW”), nearly all of which were modules and cells shipped to external customers. External shipments were up +10.1% y/y and up +0.9% sequentially 
• Shipments of modules and module tolling were 1,200.0 MW, an increase of +11.8% y/y and +5.8% sequentially 
• Shipments of cells and cell tolling were 40.9 MW, a decrease of 22.8% y/y and 57.0% sequentially 
• Net revenue was RMB 4.2 billion ($624.3 million), an increase of +9.0% y/y and +1.2 % sequentially 
• Gross margin was 13.8%, a decrease of 390 basis points y/y and 150 basis points sequentially 
• Operating profit was RMB 121.4 million ($18.2 million), compared to RMB 299.1 million ($44.9 million) in the third quarter of 2015, and RMB 188.0 million ($28.2 million) in the second quarter of 2016 
• Net income was RMB 44.1 million ($6.6 million), compared to RMB 258.6 million ($38.8 million) in the third quarter of 2015, and RMB 164.1 million ($24.6 million) in the second quarter of 2016 
• Earnings per diluted ADS were RMB 0.86 or $0.13, compared to RMB 4.42 or $0.66 in the third quarter of 2015, and RMB 2.87 or $0.43 in the second quarter of 2016 
• Cash and cash equivalents were RMB 2.0 billion ($298.2 million), a decrease of RMB 25.1million ($3.8 million) during the quarter 
• Non-GAAP earnings[1] per diluted ADS were RMB 0.86 or $0.13, compared to RMB 4.35 or $0.65 in the third quarter of 2015, and RMB 2.04 or $0.31 in the second quarter of 2016

Mr. Baofang Jin, Chairman and CEO of JA Solar, commented, “Third quarter results were in-line with our expectations with external shipments and revenue growing 10% and 9% year-over-year, respectively. We executed our strategy to redirect solar product sales to several stronger international markets, as shipments to the domestic market of China declined significantly after demand was pulled forward into Q2. Furthermore, our downstream strategy remains intact. We have approximately 50 MW of downstream projects under construction and intend to develop another 150 to 200 MW in the coming year.”

Mr. Jin continued, “While we anticipate more market headwinds in the near-term, we are confident that our favorable geographic exposure, prudent cost control and flexible business model will enable us to succeed. As market conditions improve, we will be positioned for strong long-term growth.”

All shipment and financial figures refer to the quarter ended September 30, 2016, unless otherwise specified. All “year over year” or “y/y” comparisons are against the quarter ended September 30, 2015. All “sequential” comparisons are against the quarter ended June 30, 2016.

Total shipments were 1,240.9 MW, exceeding the low end of the previously announced guidance range of 1,200 to 1,300 MW. External shipments of 1,240.9 MW increased 10.1% year over year and 0.9% sequentially.

External shipments breakdown by product (MW)

	2015Q3	2016Q2	2016Q3	QoQ%			YoY%
Modules and module tolling	1,073.8	1,134.2	1,200.0		5.8	%		11.8	%
Cells and cell tolling	53.0	95.1	40.9		-57.0	%		-22.8	%
Total	1,126.8	1229.3	1,240.9		0.9	%		10.1	%

External shipments breakdown by region (percentage)

	2015Q3			2016Q2			2016Q3			QoQ(pp)	YoY(pp)
China		53.1	%		63.9	%		32.0	%	-31.9pp	-21.1pp
APAC ex-China		36.3	%		12.0	%		25.8	%	13.8pp	-10.5pp
Europe		7.8	%		3.7	%		6.5	%	2.8pp	-1.3pp
North America		1.0	%		9.3	%		13.0	%	3.7pp	12.0pp
South America		0	%		9.9	%		20.2	%	10.3pp	20.2pp
Others		1.8	%		1.2	%		2.5	%	1.3pp	0.7pp

Net revenue was RMB 4.2 billion ($624.3 million), an increase of +9.0% y/y and +1.2% sequentially.

Gross profit of RMB 574.5 million ($86.1 million) decreased 15.2% y/y and 8.6% sequentially. Gross margin was 13.8%, which compares to 17.7% in the year-ago quarter, and 15.3% in the second quarter of 2016.

Total operating expenses of RMB 453.1 million ($67.9 million) were 10.9% of revenue. This compares to operating expenses of 9.9% of revenue in the year-ago quarter, and 10.7% of revenue in the second quarter of 2016.

Operating profit was RMB 121.4 million ($18.2 million), compared to RMB 299.1 million ($44.9 million) in the year-ago quarter, and RMB 188.0 million ($28.2 million) in the second quarter of 2016. Operating margin was 2.9%, compared with 7.8% in the prior year period and 4.6% in the previous quarter.

Interest expense was RMB 75.4 million ($11.3 million), compared to RMB 58.2 million ($8.7 million) in the year-ago quarter, and RMB 68.8 million ($10.3 million) in the second quarter of 2016.

The change in fair value of warrant derivatives was a gain of RMB 17.0 thousand ($2.6 thousand), compared with RMB 4.4 million ($0.7 million) in the year-ago quarter, and RMB 47.4 million ($7.1 million) in the second quarter of 2016. 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 0.86 or $0.13, compared to earnings per diluted ADS of RMB 4.42 or $0.66 in the year-ago quarter, and earnings per diluted ADS of RMB 2.87 or $0.43 in the second quarter of 2016.

Liquidity

As of September 30, 2016, the Company had cash and cash equivalents of RMB 2.0 billion ($298.2 million), and total working capital of RMB 1.5 billion ($228.8 million). Total short-term borrowings were RMB 2.9 billion ($429.0 million). Total long-term borrowings were RMB 3.1 billion ($467.8 million), of which RMB 536.3 million ($80.4 million) were due in one year.

Business Outlook

For the fourth quarter of 2016, the Company expects total cell and module shipments to be in the range of 1,200 to 1,300 MW, with essentially all being external shipments. Accordingly, full year 2016 shipments are expected to range from 4.9 GW to 5.0 GW, below the Company’s previous guidance of 5.2 GW to 5.5 GW.

Investor Conference Call / Webcast Details

JA Solar's management will host an earnings conference call on November 17, 2016 at 8:00 a.m. U.S. Eastern Time (9:00 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 “JA Solar".

A replay of the conference call may be accessed by phone at the following numbers until November 25, 2016. To access the replay, please reference the conference ID 13977699.

	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 September 30, 2016, which was RMB 6.6685 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 September 30, 2016, 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 4.0 GW of solar power products in 2015. 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.

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

[1] JA Solar adjusts net income attributable to the Company's ordinary shareholders to exclude (1) changes in fair value of certain warrants granted to certain investors in a registered direct offering (the "Offering") closed on August 16, 2013, and (2) fair value of such warrants exceeding net proceeds from the Offering.

JA Solar Holdings Co., Ltd.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
	For three months ended
	Sep. 30, 2015			Jun. 30, 2016			Sep. 30, 2016			Sep. 30, 2016
	RMB'000			RMB'000			RMB'000			USD'000
Net revenues		3,819,510			4,113,592			4,162,927			624,267
Cost of sales		(3,141,961	)		(3,485,300	)		(3,588,469	)		(538,122	)
Gross profit		677,549			628,292			574,458			86,145
Selling, general and administrative expenses		(344,152	)		(396,294	)		(406,194	)		(60,912	)
Research and development expenses		(34,278	)		(44,043	)		(46,871	)		(7,029	)
Total operating expenses		(378,430	)		(440,337	)		(453,065	)		(67,941	)
Income from operations		299,119			187,955			121,393			18,204
Interest expense		(58,213	)		(68,804	)		(75,378	)		(11,304	)
Change in fair value of warrant derivatives		4,394			47,417			17			3
Other income, net		74,301			30,878			10,450			1,567
Income before income taxes		319,601			197,446			56,482			8,470
Income tax expense		(61,014	)		(33,357	)		(12,361	)		(1,854	)
Net income		258,587			164,089			44,121			6,616
Less: income/(loss) attributable to noncontrolling interest		(644	)		388			(715	)		(107	)
Net income attributable to JA Solar Holdings		259,231			163,701			44,836			6,723
Net income per share attributable to ordinary shareholders:
Basic		0.88			0.57			0.17			0.03
Diluted		0.88			0.57			0.17			0.03
Weighted average number of shares outstanding:
Basic		242,328,656			234,290,842			234,290,842			234,290,842
Diluted		242,473,131			234,443,142			234,338,817			234,338,817
Comprehensive income
Net income		258,587			164,089			44,121			6,616
Foreign currency translation adjustments, net of tax		(32,876	)		(22,068	)		(3,776	)		(566	)
Other comprehensive loss		(32,876	)		(22,068	)		(3,776	)		(566	)
Comprehensive income		225,711			142,021			40,345			6,050
Income/(loss) attributable to noncontrolling interest		(644	)		388			(715	)		(107	)
Comprehensive income attributable to JA Solar Holdings		226,355			141,633			41,060			6,157
NON-GAAP RECONCILIATION
GAAP net income attributable to JA Solar Holdings		259,231			163,701			44,836			6,723
Change in fair value of warrant derivatives		(4,394	)		(47,417	)		(17	)		(3	)
Non-GAAP net income attributable to JA Solar Holdings		254,837			116,284			44,819			6,720
Non-GAAP net income per share attributable to ordinary shareholders:
Basic		0.87			0.41			0.17			0.03
Diluted		0.87			0.41			0.17			0.03
Non-GAAP weighted average number of shares outstanding:
Basic		242,328,656			234,290,842			234,290,842			234,290,842
Diluted		242,473,131			234,443,142			234,338,817			234,338,817
Note:  JA Solar excludes net income attributable to the participating warrant holder of RMB 4.5 million (US$0.7 million) from the numerator of basic EPS in the third quarter of 2016.

 

JA Solar Holdings Co., Ltd.
Condensed Consolidated Statements of Operations
(Unaudited)
	For nine months ended
	Sep. 30, 2015			Sep. 30, 2016			Sep. 30, 2016
	RMB'000			RMB'000			USD'000
Net revenues		8,930,960			11,746,233			1,761,451
Cost of sales		(7,422,460	)		(9,968,121	)		(1,494,807	)
Gross profit		1,508,500			1,778,112			266,644
Selling, general and administrative expenses		(796,614	)		(1,114,964	)		(167,199	)
Research and development expenses		(107,012	)		(130,513	)		(19,572	)
Total operating expenses		(903,626	)		(1,245,477	)		(186,771	)
Income from operations		604,874			532,635			79,873
Interest expense		(183,364	)		(211,455	)		(31,710	)
Change in fair value of warrant derivatives		25,596			70,882			10,629
Other income, net		82,820			57,610			8,639
Income before income taxes		529,926			449,672			67,431
Income tax expenses		(100,337	)		(83,487	)		(12,520	)
Net income		429,589			366,185			54,911
Less: income/(loss) attributable to noncontrolling interest		(663	)		990			148
Net income attributable to JA Solar Holdings		430,252			365,195			54,763
Net income per share attributable to ordinary shareholders:
Basic		1.45			1.32			0.20
Diluted		1.44			1.32			0.20
Weighted average number of shares outstanding:
Basic		246,627,317			234,290,842			234,290,842
Diluted		246,868,295			234,434,640			234,434,640
Comprehensive income
Net income		429,589			366,185			54,911
Foreign currency translation adjustments, net of tax		(30,810	)		(25,984	)		(3,897	)
Other comprehensive loss		(30,810	)		(25,984	)		(3,897	)
Comprehensive income		398,779			340,201			51,014
Income/(loss) attributable to noncontrolling interest		(663	)		990			148
Comprehensive income attributable to JA Solar Holdings		399,442			339,211			50,866
NON-GAAP RECONCILIATION
GAAP net income attributable to JA Solar Holdings		430,252			365,195			54,763
Change in fair value of warrant derivatives		(25,596	)		(70,882	)		(10,629	)
Non-GAAP net income attributable to JA Solar Holdings		404,656			294,313			44,134
Non-GAAP net income per share attributable to ordinary shareholders:
Basic		1.36			1.06			0.16
Diluted		1.36			1.06			0.16
Non-GAAP weighted average number of shares outstanding:
Basic		246,627,317			234,290,842			234,290,842
Diluted		246,868,295			234,434,640			234,434,640

 

JA Solar Holdings Co., Ltd.
Condensed Consolidated Balance Sheets
(Unaudited)
	Dec. 31,	Sep. 30,
	2015			2016			2016
	RMB'000			RMB'000			USD'000
ASSETS
Current assets:
Cash and cash equivalents	2,883,294			1,988,819			298,241
Restricted cash	663,518			759,566			113,904
Accounts receivable	2,872,775			3,191,666			478,618
Notes receivable	837,711			152,461			22,863
Inventories	1,660,543			2,628,699			394,197
Advances to suppliers	473,310			274,476			41,160
Other current assets	633,354			1,178,816			176,774
Total current assets	10,024,505			10,174,503			1,525,757
Property and equipment, net	4,365,348			5,201,064			779,945
Project asset	1,028,615			2,313,280			346,897
Advances to suppliers	195,341			114,359			17,149
Prepaid land use rights	428,495			528,265			79,218
Long-term investment	55,169			66,994			10,046
Other long term assets	208,430			263,173			39,465
Total assets	16,305,903			18,661,638			2,798,477
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings	2,194,957			2,860,456			428,950
Accounts payable	2,389,467			2,689,848			403,366
Advances from customers	691,867			475,496			71,305
Current portion of long term borrowings	238,400			536,338			80,429
Derivative liabilities-warrants	71,237			-			-
Accrued and other liabilities	1,588,885			2,086,639			312,911
Total current liabilities	7,174,813			8,648,777			1,296,961
Long-term borrowings	2,461,017			2,583,444			387,410
Other long term liabilities	752,925			1,170,290			175,495
Total liabilities	10,388,755			12,402,511			1,859,866
Total JA Solar Holdings shareholders' equity	5,819,695			6,160,484			923,819
Noncontrolling interest	97,453			98,643			14,792
Total shareholders' equity	5,917,148			6,259,127			938,611
Total liabilities and shareholders’ equity	16,305,903			18,661,638			2,798,477

Contact:

The Blueshirt Group

Ralph Fong
Phone: +1 (415) 489-2195
Email: ralph@blueshirtgroup.com