This is what I found about today's downgrade:
"Canadian Solar (CSIQ -7%) is downgraded to Underweight from Equal Weight with a $14 price target at Barclays, which sees multiple near-term risks from the possible delay and/or weak pricing of project sales, soft investor demand for a J-REIT listing for its Japan assets in H2, and the Sept. 22 injury vote in the U.S. ITC 201 trade case.
Project sale timing continues to be pushed back, the firm says, with expected 2017 sales already potentially delayed into 2018 and likely driving a 2017 revenue guidance miss.
Barclays continues to see downward price risk potential for CSIQ to realize the full expected $1.8B of market value given the pressure on solar project values in the U.S. (60% of the company's portfolio); while CSIQ expects a J-REIT listing in H2, the J-REIT market continues to suffer from low liquidity, the firm adds."
I was surprised to see this reaction. Normally, analysts can understand messages given to them by the companies; this one missed it. One is the sale of the projects. Qu just said it, the company who is buying it appears to be a foreign buyer. He quoted sPower transaction based on Alberta fund buying 700MW. The transaction was announced in February and consummated end of July.
I would not be surprised if Bowmont Capital arranged the sale. They work with CSIQ in Canada and Alberta. So they found a buyer among Canadian companies, potentially. Not sure about the lower price here. Qu said it was what they expected. Yes, there is a push out of revenue for Q4, but if revenue is coming, does it matter if it is Q1 or Q4? Operationally (manufacturing) the company needs to produce profit, and I think that goal is more critical and frankly, Q4 is their most capable quarter this year to do so. What about the sale of Chinese, Japanese and UK projects? Can they have $1B in Q4 without the US sale? Sure they can. US sale is probably $1B on its own.
JREIT- no liquidity, did the Barclay analyst read Reuters story? How does he know that? I bet he has a limited idea what he is talking about. Only 20% of the value, perhaps less will be the public issue; rest is loans. Is he saying there will not be $60M US on a Japanese market for it? Perhaps not, but I would not throw the company out for it. Looking at the numbers, Canadian will have double the volume of MW or more. IPO will tell the story, and this is just a speculation by Barclay. Two of the three funds are selling shares on the market btw, so what liquidity or lack of interest the speculation is based?
Suniva- I guess he expected that Trump would not vote tariffs? I think that Canadian is uniquely positioned to avoid tariffs via Canada location. I do not know this for a fact, but law today allows for it. I kept my shares and averaged.
Finally, what about the full potential of $1.8B? The stock is worth $800M now, I am not even sure what he meant.