Science & Technology
Science and Technology
Science and Technology
Fri, July 9, 2010
Thu, July 8, 2010
JA Solar, Telefonica, Portugal Telecom, Vivo Participacoes, Telesp and America Movil
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: JA Solar Holdings Company Ltd. (Nasdaq: [ JASO ]), Telefonica (NYSE: [ TEF ]), Portugal Telecom (NYSE: [ PT ]), Vivo Participacoes (NYSE: [ VIV ]), Telesp (NYSE: [ TSP ]) and America Movil (NYSE: [ AMX ]).
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Here are highlights from Wednesdaya™s Analyst Blog:
JA Solar Acquires Assets
JA Solar Holdings Company Ltd. (Nasdaq: [ JASO ]) entered into an agreement to acquire privately held Shanghai Jinglong Solar Technology Co. Ltd. from Ningjin Jinglong PV Investment Co. Ltd., a company controlled by JA Solara™s Chairman, Mr. Baofang Jin. Under the terms of the agreement, JA Solar will acquire the company for a cash consideration of approximately $29.3 million (RMB 198.96 million). The transactions have been reviewed and approved by the two companies' boards of directors.
The acquisition will enhance JA Solara™s ability to further expand its manufacturing operation to better support its growing markets. Through the acquisition, JA Solar would acquire land, building and facilities located in the Minhang Export Processing Zone within the Fengxian district of Shanghai, China. The deal includes 206,590 square meters of land, 58,706 square meters of buildings and related facilities. JA Solar already uses the facility for contract manufacturing of its solar modules.
JA Solar caters to a geographically-diversified pan-continental customer base, which spans China, Germany, Sweden, Spain, South Korea and the U.S. The company also effectively uses its location advantage in China with Chinese low-cost solar module manufacturers contributing a substantial portion of its revenue.
At the end of the first quarter of 2010, JA Solar raised its shipments guidance for fiscal 2010 to over 1 GW from its prior guidance of more than 900MW. Shipments in the second quarter of 2010 are expected to be approximately 275MW.
Currently, the Zacks Consensus Estimate for full fiscal 2010 earnings is 75 cents per share, which would be a significant improvement over the fiscal 2009 loss of 12 cents.
Telefonica Downgraded
We are downgrading our recommendation to Underperform from Neutral for Telefonica (NYSE: [ TEF ]), the largest telecom carrier in Spain and Latin America. Currently the stock has Zacks #5 (Strong Sell) Rank. We believe Telefonicaa™s fight with Portugal Telecom (NYSE: [ PT ]) for the full control of its Brazilian wireless joint venture, Vivo Participacoes (NYSE: [ VIV ]) may push the share price downward.
Portugal Telecom's board and shareholders refused the Telefonica bid to acquire the remaining control (50%) of Vivo, with support from the Portuguese government. According to the government, Vivo is crucial to the growth prospects and development of Portugal Telecom. Exclusive control of Vivo will enable Telefonica to merge the entity with its Brazilian fixed-line voice and broadband unit Telesp (NYSE: [ TSP ]), which is struggling to perform. This will make the combined entity a full-service operator offering competitive bundled (fixed-line and wireless) services.
While Telefonica continues to lead the Brazilian wireless market, the carrier is exposed to increased competition. France-based media company Vivendi SA, which has acquired the controlling stake in the Brazilian telecom operator GVT Holding, poses as an emerging threat. Moreover, Telefonicaa™s biggest rival in Latin America, America Movil (NYSE: [ AMX ]) is reportedly integrating its Brazilian wireless and wireline assets. By combining Vivo with its Brazilian fixed-line business, Telefonica would be in a stronger position to compete with America Movil.
Telefonica is being forced to reduce mobile and broadband internet rates due to increased competition in the domestic market with other operators gaining traction, impeding average revenue per user and top-line sales retention. Moreover, the companya™s Spanish revenue continues to be impacted by the reduction in mobile termination rates and a soft economy. The companya™s Spanish revenues declined 5.7% year over year in the most recent quarter.
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