On Mar 21, 2016, we have issued an updated research report on Ontario, Canada-based Canadian Solar Inc. CSIQ − a vertically integrated manufacturer of silicon ingots, wafers, cells, solar modules (panels) and custom-designed solar power applications.
Recently, the company reported fourth-quarter 2015 results that exceeded expectations in terms of both revenues and earnings. Its solar module shipments for the quarter also increased year over year and surpassed the company’s expectations. Solar module shipments in the reported quarter totaled 1,430 megawatts (“MW”), up 59.4% from 897 MW in the year-ago quarter. The figure also surpassed the company’s guidance range of 1,300 MW to 1,350 MW.
The company is gradually gaining share in Asia, which is predicted to be a major solar market in the near future, with Japan, India and China primarily driving demand. Asia and others contributed 41.1% to net revenue in the fourth quarter of 2015, up significantly from 29.2% in the year-ago quarter.
Recently, the company announced that three solar photovoltaic (“PV”) power plants in Japan, with a total capacity of about 6.2 megawatt-peaks (“MWp”), have started operating commercially. With the completion and energizing of these solar plants, Canadian Solar’s total capacity of projects currently operational in Japan has reached approximately 21 MWp. This is in alignment with the company’s goal of expanding its presence in Japan.
Canadian Solar has also taken several initiatives to strengthen its footprint in other countries. In the fourth quarter of 2015, Canadian Solar brought online five solar power plants in the UK, totaling 22.9 MWp. At the end of the quarter, the company’s late-stage projects amounted to 57.0 MWp, which are expected to be connected to the grid this year.
While expanding elsewhere, Canadian Solar is slowly losing its ground in America to other players like First Solar Inc. FSLR, SunPower Corp. SPWR and SolarCity Corp. SCTY. The U.S. Energy Information Administration projects solar consumption in the U.S. to shoot up 92.4% to 0.808 quadrillion British thermal unit (“Btu”) in 2017 from 2014 levels. Despite the promising outlook, Canadian Solar’s falling revenues from the Americas is a cause of concern. Revenues from the Americas in the fourth quarter represented 51.9% of the top line as compared to 61.8% in the year-ago quarter.
The company is also exposed to foreign currency fluctuations and geopolitical risks because of its wide international exposure.
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