Stock of China’s JA Solar rose as much as 30 percent in its U.S. market
By Yung Kim,
NEW YORK (Reuters) /Wednesday, February 07, 2007
source: Canada.com
http://www.canada.com/nationalpost/financialpost/story.html?id=70d2fa2a-60de-4959-a6cb-6eacc636c00d&k=82633
Stock of China’s JA Solar Holdings Co. Ltd. , a maker of solar cells, rose as much as 30 percent in its U.S. market debut on Wednesday, boosted by a sunny outlook for alternative energy, analysts said. The American Depository shares of JA Solar opened up 27 percent at $19.06 and rose as much as 30 percent to $19.50 on Nasdaq. Share prices slipped in late trading, closing at $17.80, a rise of 18.7 percent.
Each ADS represents three common shares, according to documents filed with the U.S. Securities and Exchange Commission. The company joins a burst of alternative energy offerings, still in the early stages of their development, said Argus Research analyst Kevin Calabrese. Aided by improved technology, costs for manufacturing and use are subsiding as pressure mounts to reduce dependence on fossil fuels, Calabrese said.
“All of the solar cell manufacturers have been very hot,” Calabrese said. “This is one that came out at a good price and at the right time.” Chinese solar companies in particular have capitalized on the trend with listings in the United States, analysts said.
“The last two deals have gone up big and this deal probably fed off of that,” said Sal Morreale, who tracks IPOs for Cantor Fitzgerald in Los Angeles. Trina Solar Ltd. offered shares in December at $18.50 and rose as much as 45 percent to $26.75 in its debut. The shares rose $2.61, or 7.9 percent, to close at $35.76 on the New York Stock Exchange on Wednesday.
Solarfun Power Holdings Co. Ltd. floated shares a day later, but fell 20 percent from its $12.50 offering price. The stock has since rebounded and closed at $14.93 on Wednesday. At $17.80, JA Solar shares are expensive compared with its predecessors, trading at 84 times annualized 2006 earnings.
Trina Solar and Solarfun trade at 38 and 53 times 2006 earnings, respectively, according to Reuters Estimates. To be sure, alternative energy companies have had mixed results on the public markets. China’s Canadian Solar Inc. offered shares in November at $15 and closed on Wednesday down 27 percent at $11.01 on the Nasdaq.
On Tuesday, JA Solar raised $225 million with an initial public offering that was priced above a forecast range. The 15 million ADS offering sold for $15 per share compared with a $12.50 to $14.50 forecast.
The company produces solar cells that are assembled by module manufacturers into systems that convert sunlight into electricity. Underwriters led by CIBC World Markets and Piper Jaffray have the option to buy another 2.25 million ADS to cover overallotments.