Zacks Investment Research downgraded shares of JA Solar Holdings Company Ltd. (JASO) from OUTPERFORM to UNDERPERFORM on October 17, 2014, with a target price of $7.00.
We downgrade our recommendation on JA Solar Holdings Co. Ltd to Underperform from Outperform as higher operating expenses continue to hit the company's performance. Although the company's top line increased sequentially in the second quarter 2014, its bottom line registered a 56.3% fall. Higher operating expenses led to lower-than-expected profits. Its total operating expenses jumped 69.7% year over year and 26.9% sequentially. Although the Chinese government's pro-environment policies that aim at boosting renewable energy as a source of power generation will drive future prospects for core PV manufactures like JA Solar, the latest anti-dumping policies slapped by the U.S. could pose challenges to JA Solar's profitability. Moreover, the soft market conditions in Europe's PV industry could also impact the company's sales.
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