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  1. 3 points
    I agree with this, for two reasons. First, as noted previously, the Chinese have already made the decision to massively support their native solar industry. Think of all the money they've sunk into subsidies, loans, etc. in the past, for decades now, to bring their solar industry to this point. Now that the industry is on the brink of sustainability without further subsidies, they're going to allow it to tank because of a few billion dollars missing in a particular government fund? I find that completely unrealistic. Second, and perhaps more important, beyond economics solar now supports the stability of the Chinese government. China HAS to get a handle on its air pollution problem. Meanwhile, they also HAVE to produce more electricity, as they continue to lift millions of their people out of poverty and into at least the lower middle class. Those folks want electricity, and all of their city dwellers want, if not perfectly clean air, then at least air you don't need a mask to breathe. Renewables, including solar, are not a luxury for the Chinese. Let all your cities have air like Beijing has on bad days, and let those bad days become the norm, and you're going to have massive public unrest. That's anathema to the Chinese government. As we all know, there are no guarantees when investing in Chinese solars. But I think fears the internal Chinese solar market will completely collapse, tanking their entire industry, are simply not justified.
  2. 3 points
    It looks correct if debt is transferred as part of the sale. That looks to be a sale that would generate 12.6% gross margins with the sale price of $1.53/watt. They financed the project with $97M debt per the PR from April 25. If you run some numbers of debt, 20% their own equity, capitalized interest for 5 months at 3% for ST bridge loans, and 15% premium on the cost to build, you would find sale at $140.8M. The cost to build (debt+20%equity+capitalizedDebt) = $122.4M. The $42M received would be their equity investment of $24.25M + Gross profit of $17.75M. That gross profit is $17.75M/$140.8M or 12.6% margins. Coincidentally the $42M is right in the range of the 30% ITC credit the buyer would get for the total purchase price of $140.8M. If the equity they invested was 25%, then the margins look to be 6.5% with gross at $9.7M
  3. 2 points
    You know they have a lot of work in Japan. You always chuckle about them dropping MW here and there, and still, they have a lot of work. This time you were sarcastic about if they are in the auction. Now you are if there is enough won. You worry too much. You should not invest on in hope, but you have not invested at all, and all you do is what troll would do. Is this an investment advice? Do you know what their plans are? You begin to act like you used to work. Remeber when you did not contribute to anything? Show me that I did not hope for you to change in vain.
  4. 2 points
    This is taken from the USITC recommendations, it is a major win for CSIQ if Trump approves this in this shape. First I thought it was important to note how they look at cells put in modules in Canada, second the recommendation As Canadian respondents explain, a headquarters ruling by U.S. Customs and Border Protection confirms that, under NAFTA rules of origin and marking rules, U.S. imports of finished CSPV modules assembled in a NAFTA country, even from CSPV cells originating in non‐NAFTA countries, qualify as products from the NAFTA country, where the goods originate under General Note 12(b) and are accompanied by a signed and completed NAFTA certificate of origin, because the final assembly operations in the NAFTA country involve more than minor processing and require substantial investment and value added. Although petitioners did not overtly adopt respondents’ approach to country of origin for U.S. imports of modules assembled in NAFTA countries, they did not identify any flaws in the legal reasoning underpinning Canadian respondents’ arguments.85 We find the Canadian respondents’ arguments persuasive, and accordingly the import data we primarily relied on for our analysis uses the country‐of‐origin methodology that they proposed (i.e., the NAFTA rules of origin for imports from Canada and Mexico and for imports from all other countries, the country where the cell was manufactured, as adjusted to reflect cells assembled into modules in a NAFTA country) 1. Finding With Respect to Imports from Canada We find that imports of crystalline silicon photovoltaic cells (whether or not partially or fully assembled into other products) from Canada do not account for a substantial share of total imports and do not contribute importantly to the serious injury caused by the imports. Accordingly, we make a negative finding with respect to imports from Canada. According to adjusted importer questionnaire data, the industry in Canada was not among the top five suppliers of imports of CSPV products during the three most recent years.388 Under the second prong for imports from NAFTA countries, the statutory standard is whether the imports from the NAFTA country “contribute importantly to the serious injury … caused by imports,” which is a lower standard than whether global imports are a substantial cause of serious injury.398 Despite the larger growth rate for imports from Canada relative to global imports, given the relatively small share of total imports accounted for by imports from Canada, the relatively small change in the Canadian industry’s import share over the POI, and the more modest level and change in the level of imports from Canada, particularly relative to total imports from all sources over the POI, we find that imports from Canada considered individually do not contribute importantly to the serious injury caused by imports.399 Given that imports from Canada started the POI at a smaller baseline than other foreign suppliers and increased overall during the POI at a rate that exceeded the growth rate for global imports, we recognize that if the President were to determine to exclude imports from Canada from any safeguard measure, unrestrained imports from Canada might increase to harmful levels.400 In those circumstances, however, if any such increase were to occur, the domestic industry would have other options to consider, including the import‐surge mechanism of 19 U.S.C. § 3372(c) and the antidumping and/or countervailing duty laws (19 U.S.C. § 1671, 19 U.S.C. § 1673).
  5. 2 points
    Yes , as I stated Daqo has had a very favorable pricing environment for now. The question I posed was the length of that premium. The market dynamics in this industry turn very fast. What was boom becomes bust, what was bust becomes boom. You already pointed out 3 price points of near term earnings strength from $6 to $12 in EPS. All are very good compared to peers. That high end if sustained suggests a much higher price, the low end suggests that they are reasonably priced. As markets are forward looking I would be concerned after 2018 as that low end could become the high end range and the lower end range would be down to $3 or less. My reasoning is if China is looking at a 3 year 40% price decline for projects to achieve a 3 RMB solar price unsubsidized, then Poly certainly must fall as must the entire chain. You can run some analysis on $0.90 project prices today with high efficiency mono Perc at $0.40. If pricing falls to meet the targets of China, and a similar ratio is used of module to project costs, then that module price falls to $0.24 for high efficiency mono with production costs near $0.21. Multi would be within 1 or 2 cents. Clearly Poly at 25% of a module production cost would have poly below $14 and somewhere between $9-$13. In addition at some point the markets will adjust and you will not have 1 market sector getting 7-12% margins and profitless when another is pulling down 75-100% GM. My guess is the Government will step in once the cash flow is paying down the debt as the Si market has matured in China and is not in risk of destruction from foreign competition. That is why they put in the Poly Tariffs in the first place.
  6. 2 points
    We did not get into poly, we talked about the projects. He was very interested in my interpretation and offer support with what he heard. He said that KEPCO is high single digit and Shenzhen is a low double-digit, but CFO said some revenue have no margin, which is basically what I am trying to say. I explained to him that KEPCO bought all tax equity projects, and Shenzhen has one, Mustang. He thinks Q1 will be bigger ( I assumed GM) but he thought even on revenues. He said the market does not understand the potential of those sales and thought what my article shown was the best analysis he seen from anyone. I explained that Roth and Oppenheimer have high prices, but he chuckled commenting they did not do a lot of work on those. We talked for the first time ever today.
  7. 2 points
    I disagree with GM on plants, opex, and GM in modules. Again despite the description that Opex stays flat when plants are sold, this is being increased in multiples. GM 12% in Q4 and flat Opex company can make more. I think your adverse approach to everything, seeing failure in every other company by quoting things in isolation to prove your point, have me say that glass is half empty in your statements. You quoted an article, which has nothing to do with the CSIQ doing business but someone in India winning bids. 2/3 of those will never get built. Half of them had counted to build with modules worth $0.25 per watt, and they complain that Chinese neg the module supply. CSIQ won Dubai supply and it was the one of the lowest. Their GM survived. When plants sell at $0.80 watt, CSIQ will be there to make money on it. When that time comes.
  8. 2 points
    Sold half my FSLR last night. Doh! Sold the rest around 57. Now that everyone here has sold their FSLR, it'll go to 100, right?
  9. 2 points
    At this point, CSIQ needs to make the progress in selling plants and collecting money. Every time they do that they are a better company, and should be a better stock. Again Trumps out there do not see far down the road. They pay for FSLR 7% in the aftermarket but may sell off tomorrow, because of revenue and EPS for Q4. I like FSLR to get high valuation because I think it will in comparison show value of CSIQ. In fact, I am for completely different PE all together. FSLR will have PE of 19.61 this year, and I am hoping for 9.82 if CSIQ is able to do numbers form my article. So if for any reason CSIQ gets higher PE and numbers support we will have good days. It is frustrating and I hope that balance sheet will be more convincing in time.
  10. 2 points
    Sold PEGI on the up tick bought even more CSIQ below $16. ONE DAY the market will get it or not.
  11. 2 points
    Canadian Solar Inc. priced its initial public offering of 177,800 investment units at 100,000 Japanese yen per unit, before underwriting discounts. Of the units included in the offering, Canadian Solar will purchase 25,395 units as the designated purchaser. The units of CSIF are expected to list on the Tokyo Stock Exchange on October 30, 2017. CSIF plans to use the net proceeds from the offering and anticipated borrowings of JPY 17.7 billion (approximately $156 million) to consummate the acquisition of its initial portfolio. Subsidiaries of Canadian Solar in Japan are contributing 13 solar power projects with a total installed capacity of 72.7 MWp to CSIF as its initial portfolio. Net sale proceeds to Canadian Solar from these assets amounted to JPY 30.4 billion (approximately $270 million). Canadian Solar expects to use a part of the net sale proceeds to immediately reduce its overall debt leverage by JPY 18.7 billion (approximately $165 million) and to further strengthen its liquidity.
  12. 2 points
    It sounds that CSIF will be selling units for 100,000 yen or $877. This now translates to about $163M IPO. Elsewhere is has been said CSIF raised $17.8B yen or $156M, not sure if this after or before the fees. Also due to exchange volumes differ.
  13. 2 points
    It is going to be interesting how the market is going to react to all those CSIQ plant sales. It will be more important for investors to see how balance sheet looks like after major sale happens. I think most know those sales are coming, including sale side. I guess they have a choice as always to work the stock and hope it will not go up before they can sell it. I think at the end of the day when all is said and done, CSIQ will increase its equity via retained earnings which should double in my view (over $600M), to about $1.2 to $1.3B for equity. will get about $800M in cash, to bring the same amount $1.3B in total not counting restricted, with it $1.7B. All by lowering the debt by $1.3B. Those are big changes. Having stock stay in the same place seems unlikely and should drive the share price up. I think since most know it, only confused frustrated or those who need cash sell now.
  14. 2 points
    Greetings, I have some experience in technical analysis that I will be happy to share on this thread and hopefully it will be useful for members as well as for my own trading. In 1931, Richard Wyckoff published his seminal work on stock trading and investing The Richard D Wyckoff Method of Trading and Investing in Stocks: A Course of Instruction in Stock Market Science and Technique. In it ,he describes a system of analysis based on the interpretation of Price and Volume, that enables a trader or investor to make accurate and consistent forecasts about the most probable action of any particular asset. I open this thread in order to share my analysis of the solar sector, based on the aforementioned method, as well as of particular stocks that I deem suitable for investing or trading. I have been following the sector for a couple of years, since I am firm believer that climate change is the biggest challenge facing our species. In this respect, solar will be an integral part of the solution and I see it as an industry that will grow enormously for decades. From a technical perspective, I see the sector as having completed a bottom in June 2016 and I believe we are witnessing the initial stages of the bull market. In the following charts I will be sharing my reasons for holdings this view. On the longer term monthly chart, I see two significant developments. Firstly, buyers came in to support price above the 2011 lows (1-blue line); Following Trump's election a final round of selling ensued, most probably elicited by the administration's anti renewable energy stance. However, scarcely a month later, around mid December, buyers stepped in and begun accumulating these stocks. This brings us to the second relevant development (point 2); Buyers kept bidding up prices with enough conviction to break the downtrend that had been in place since the market peaked at around 50. This was the first sign of selling exhaustion and a sign that a potential bottom could be in place. The weekly chart shows a more detailed picture of the most recent action. In it I have noted point “A”, which shows how after the abovementioned downtrend break, there was another wave of selling that was met by further buying, supporting price above the December lows and resulting in a successful test (A). From here onwards, price has made a series of Higher Lows, and we now have an uptrend that remains intact. The most recent developments show buyers stepping in at the black horizontal support line at “C”, and eagerly attempting to accelerate the pace of the advance, as shown by the steeper angle of line “D”. In order for this new trendline to be confirmed, buyers must be willing to raise the bid above the most recent highs. It is worth noting how even with the constant flow of bad news coming from the White House (Pulling out of the Paris Agreement, the removal of tax credits, the potential for import tariffs) price is continuing its merry way northward. That is to say, “someone” or some group of people are making use of the bad news to load up on the sector. We could debate and hypothesise over who is buying up and why, what kind of privileged information they might have; maybe they know that this tariff talk and Paris Agreement withdrawal is nothing more than a negotiation tactic, they could be certain that the clown will be impeached, or perhaps there is a growing realization that solar will play a pivotal role in providing energy for the world, regardless of what the USs position might be. Fortunately for the price action reader, one needn't waste much time conjecturing, since the aggregate action and beliefs of all players are shown on the charts. For now, and unless price breaks the current stride; the charts show a buoyant market, with few sellers and eager buyers that are happy to keep bidding up prices.
  15. 2 points
    SunPower going after First Solar. https://www.pv-tech.org/editors-blog/sunpower-running-scared-of-first-solar
  16. 2 points
    This is getting a bit more exciting, I found this piece on it. Apparently, the acquisition is $800M, which would translate to $2.03 per watt dc and $2.64/watt ac. If the number was accurate, the GM and equity look like 29% or 232/800. This would support the version of 20% project equity and 9% GM. If Koreans are paying the same for residual 309MW/1.3=237.7MW ac that is an additional $628M. In total selling that 707MW would bring $1.430B revenue, a cash increase of $414M, and GM of $128M. That alone is a $1 per share at 50% net margin. I would say that net margin is probably likely 80%, so by the looks of it, CSIQ will earn $100M and $1.65 per share. Not bad when considering that IP is coming in and 25% GM could bring $65M and net income this for $52M, that is about the $0.85. We still have 150MW in UK, and collection of all other sales, If this is coming Q4, the revenue could hit $2B. http://westdollar.com/sbdm/finance/news/1354,20171013784710780.html
  17. 2 points
    The question is, compared to what? Other types of electricity generation can be damaged by severe weather, too. And rebuilding a solar or wind farm (using the insurance proceeds disdaniel mentions) is not rocket science. Putting up a solar panel or wind turbine, even a large number of them, is considerably less complicated than building a coal, oil, or gas plant. And we won't even talk about nuclear....
  18. 2 points
    I'm only trading/investing in CSIQ and FSLR for the next 6-8 months. Not even going to try and trade JKS, simply because i don't want to get caught holding the bag. I already own shares at 30 there, so that's more than enough. It's all CSIQ and FSLR for me and I'm going in heavier on CSIQ for the reasons you've stated. It seems like a no-brainer. Well, maybe Travis won't get it.
  19. 2 points
    I was business traveling this week and got late last night back. I read the questions here and I think there is a lot of doubt about FSLR and what it means to have tariffs in the US for Canadian. First, I agree with some people saying that FSLR gained huge on the idea of Suniva and when it materialized most sold. While trader in me curses not to sell at $53 or whatever it was, the investor does not mind the drop. I believe that tariffs will improve FSLR dynamic offer dominant role in the US and allow to bring a lot more capacity to the US market. I explained many times why CSIQ is a better choice, now I feel one needs to have each. Even technology landscape requires diversity. JKS offers the same thing what CSIQ does. I see no financial, operational or technological advantage of JKS over CSIQ. However, CSIQ has profit making dev business which few people credit. JREIT should offer a good entry point for us to understand what Japan portfolio can do for the company. I am comfortable holding both and I am used to the market not be at the same place with me as I think I am ahead of it.
  20. 2 points
    I made my own observations under the recent, excellent article posted on SA https://seekingalpha.com/article/4108224-canadian-solar-rare-bargain-hiding-plain-sight I quote it in full here, Author, thank you for an excellent article. A couple of observations. The resale value of $1.8B, as per quote from the company release, includes “only the class B share value of the Company's tax equity deal projects in the U.S.” In my interpretation, this excludes minority-owned 49% of Southern purchase worth to the company $297M in carrying value under, as you have excellently pointed out, investment in affiliates. The confirmation is offered by the asset valuation of 1.26GW of operational plants, where the investment in affiliates is not included. I quote the company’s statement as “recorded on its balance sheet as project assets ($1,308.5 million), assets held-for-sale ($203.5 million) and solar power systems, net ($65.8 million). “ So 897MW, including the only 443MW in the US, is recorded as $1.57B worth of assets with the resell value of $1.8B. Based on the balance sheet from the Q2 the company had as much as $2.1B in solar plant assets, in three asset lines mentioned already, plus the non-current solar plant assets, including those in construction. For all those assets, the company has declared $1.3B in debt. The net of equity against the debt is $700M. At this point, the $297M of equity in affiliates is not included. However, it is easy to assume that at a minimum, $700M of equity is recoverable, if sales had zero profit. Canadian received only $190M in revenue from Southern in the sale of 379MW, which indicates that Southern has potentially taken on all the debt. In this case, $297M could be recoverable in full. Since all the projects have capitalized expenses, I would think the gross profit from $1.8B resale, in the amount of $222M can go all the way to the bottom line. I am not sure how much gross profit would be offered for 49% minority ownership of 363MW. At $0.15 per watt additional $55M could be extracted. In total, CSIQ can see around $1.2B added into cash with a reduction of debt by $1.3B. Since the $1.3B in equity of plants generates electricity, further debt is being reduced, therefore, improving the level of equity. Recurrent does have 6GW in mid-term project development pipeline in the US. CSIQ should be able to expand Canadian operations to few hundred of MW and use cell factory in Thailand to support tariff-free modules for own developer since Canada was not found as a cause of injury under Suniva. Lastly, the 75MW sold to IPO fund which the trading suppose to start on October 30th this year are estimated to sell at $3.51/watt. The revenue from those projects is about $28M per year based on FiT and generation. The 20% ownership retention would bring additional $0.70 per watt, which is very close in your estimates with $4.21 per watt.
  21. 2 points
    What is the gross margin in cents on a module versus a solar plant sale? So let's say you sold 1GW of modules in a quarter and the other company sold 1GW of plants. You overhead costs are the same. So you sold a module at .35 cents, and you made 0.035 per watt, you made a gross profit of $3.5M. As a plant builder, you built a plant at 1.10 and had 10% margin. You made $110M. Your gross profit is 3.14 times better. If you business costs 50M to run you lost money as a manufacturer, but as a plant builder you made $65M, etc. Your opex can be higher and you still make money. When CSIQ will start selling a large volume of plants this will be a lot more visible.
  22. 2 points
    I certainly appreciate your kind words on judgment, but I think if you have a look what is happening at Jinko balance sheet and what they are saying you will find CSIQ a lot more "sustainable". Interestingly JKS is holding very well and CSIQ is not. I think a lot are afraid that plants, especially those in the US, cannot be sold. Klothilde made a great effort to show they are not high margin plants but they are cash stoppers and so are the other ones. CSIQ has at least $600 to $700M plus cash flow potential from the plants. Yes including construction, Brazilian projects sold GM is about $300M. Just for those who are wondering rest of the known pipeline is the $300M of cash and GM potential, called it Japan for easy understanding. Although this is not Jinko's thread few observations. $1.5B in accounts payable $1.2B in receivable. They are not having a lot of cash generation. $10M in cash increase by borrowing $160M. Their inventory has for the second quarter over $700M. Sounds to me like poly, maybe, their GM will be sustained even without that much of the OEM, but at 10% plus. Suddenly black silicon is making a statement, the cost is 2 cents higher than CSIQ and price is about 0.7 higher for all that mono being sold. The company is exiting plant business, in case someone is still wondering due to not having the cash flow to support it. Impressive shipments, but looks like the balance sheet is getting heavy on leverage, and with the $1.2B in payables, people jumping to buy on weakness are paying for weakness in my opinion. JKS with all the signs of flat margin could make a loss in Q3 while CSIQ is likely to make a profit. Brazil appears not giving any issues to them and yes the US plants will be sold, it is a matter of time. Finally CSIQ all that cash let's go with $700M it can build a lot more plants it built last round and based on module pricing, even 10% is getting a lot more out of $1 per watt versus $0.37 per watt. The market may come to a realization on this or not, for now, JKS is a people's solar company.
  23. 2 points
    Canadian modules used by interesting construction site in Germany http://www.pveurope.eu/News/Installation/Innovative-PV-landfill-system-saves-costs-and-protects-the-environment
  24. 2 points
  25. 2 points
    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.