JA Solar Holdings Co Ltd’s focus on margins over volumes paid off as the Chinese solar products maker halved its operating loss in the first quarter by selling more panels in high-margin Japan.
Shares of JA Solar were up 44 per cent at $8.07 on the Nasdaq on Monday afternoon, after touching a year-high of $8.47.
Gross margins turned positive for the first time in three quarters, even as the company reported its eighth quarterly loss in a row.
The company also said it remained committed to meeting all debt obligations, and was still evaluating financing options to boost its cash position.
Heavily indebted Chinese solar companies have often defaulted on bond payments.
Debt-laden Suntech Power Holdings Co Ltd, once the world’s largest solar panel maker, and LDK Solar Co Ltd recently defaulted on bond payments partially.
Suntech’s main unit is in insolvency proceedings.
Chinese solar companies piled on debt over the past two years and stepped up manufacturing, leading to a supply-side glut that sent panel prices down sharply.
JA Solar expanded its presence in high-margin markets Asia Pacific, the Middle East and Africa, in the first quarter.
“We performed especially well in Japan, a high-ASP (average selling price) market, which accounted for a record 38 per cent of our module shipments in the quarter,” chief executive Baofang Jin said in a statement.
Japan had hardly contibuted to the company’s sales in the year-ago quarter.
The company started focusing on new markets after weak pricing in China, once its largest market, hurt margins. China accounted for only about 14 per cent of the company’s sales int he quarter, down from nearly 50 per cent a year ago.
“Right now, our focus is more on margins and profitability than on market share. As a result, we let a lower proportion of our shipment to China this quarter,” chief operating officer Jian Xie said in a conference call with analysts.
“As we expand our global footprint, we will continue to prioritise margins over shipment volumes.”
The company said it expects second-quarter total shipments to be between 410 megawatt (MW) and 430 MW. It backed full-year shipments outlook of 1.7 GW to 1.9 GW.
Operating loss fell to $13.7 million in the quarter ended March 31 from $25.6 million a year earlier.
Net loss narrowed to 85 cents per American depositary share (ADS) from $1.03 per ADS a year earlier.
Revenue rose 4.7 percent to $270 million.
