* To repurchase up to $100 mln worth shares
* Shares jump 25 pct to a month-high
By Krishna N Das
June 14 Heavily indebted JA Solar Holdings Co
Ltd, which has lost nearly a third of its market value
this year, said it could buy back up to $100 million of its
shares before the end of September, sending the stock up 25
Other China-based solar companies such as LDK Solar Co
, Yingli Green Energy Holding and ReneSola Ltd
have also been buying back shares amid a brutal selloff
in the stock market.
"We believe a share buyback is not where solar companies
should spend their cash; and see the (JA Solar) rally as
overdone," Jefferies & Co analysts, who rate the stock
"underperform", wrote in a note.
"We recommend investors take profit."
Based on JA Solar's closing price of 93 cents on Wednesday,
the company can buy back up to 107.5 million shares, or more
than half its current outstanding.
The company, the world's third-largest maker of solar cells,
had long-term bank borrowings of 4.35 billion yuan ($683
million) at the end of last year. About 885 million yuan worth
of loans were due in 2012.
Thiemo Lang, a senior portfolio manager at Zurich-based
Sustainable Asset Management, said the buyback will help push up
JA Solar's stock in the short term, but he does not expect other
Chinese companies to follow suit given their high debt level.
"JA Solar must make sure it reaches profitability again
soon, which is still more than uncertain in the current
environment," he said.
The Shanghai-based company posted losses for the last four
quarters as product prices tanked due to falling renewable
energy subsidies in top European markets.
Analysts expect the company to return to a profit only in
2014, according to Thomson Reuters I/B/E/S.
Of the 15 analysts covering the company, five recommend a
"sell" or a "strong sell", while nine rate it "hold", according
to Thomson Reuters data.
JA Solar and its top lenders, state-owned Export-Import Bank
Of China and Bank of China Ltd, could not
be reached for comment outside of regular business hours in
"The company's lenders may not appreciate this news as much
as (their) equity investors will," Raymond James analyst Alex
Morris wrote in an email.
Chinese solar companies raked up huge debts in the last two
years as they expanded rapidly, helping the Asian country become
the largest producer of solar cells in the world.
Western solar companies have complained that cheap loans
from state-run banks have helped Chinese firms sell their
products at cheaper prices.
Last month, the United States imposed duties of 31 percent
on solar panel imports, ruling in favor of local companies that
accused Chinese firms of dumping.
"We hope JA Solar finds ways to extend its debt maturities,
but this may be difficult because credit has become increasingly
tight in China," Simmons & Co analysts wrote in a note.
JA Solar shares rose to a one-month high of $1.16 on
Thursday on the Nasdaq.
The WilderHill Clean Energy index, which has fallen
about 17 percent this year, inched up 0.18 percent to 42.98
p o ints.