odyd

Canadian Solar (CSIQ)

6,832 posts in this topic

I cannot see the scenario of recovery played out before, the recovery is even identified. The asp wars the lower demand and certainly sour outlook for the US companies does not offer a lot of support.
I have targets when I want to be back in, but I am surprised that the market is reactive with credit where credit is not due. Time will tell.

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That's where the outlook for 2017 comes in.  It will tell us if the worst is over and the recovery is in sight, or not.

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That's where the outlook for 2017 comes in.  It will tell us if the worst is over and the recovery is in sight, or not.

Yes, this is why Q4 cannot come fast enough. Counting all points in this will be the high point of the next 3 to 4 quarters.

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Pete,

I have a bit of time to put few more views in front of you on the subject of 2017. I look at the current year, and I also think now of 2018.  The first factor in my negative to the neutral scenario is the element of perception. The market itself is not useful in predicting solar business. Right now the perception is that solar stocks are cheap and bad things have been already announced. Trading now is more about Trump than industry. However, sooner than later it will be about the industry.

The US companies, SPWR and FSLR, have already made public bleeding about this and the next year. Chinese stocks dropped mostly in concert and sympathy with them, many see this as a point for a bounce.

I look at the metric of growth, and there is no growth in 2017 figures or perhaps as little as 3% to the negative 15%. Numbers for 2018 are equally poor. Action starts in 2019, not sure yet why, but that is the expectation.

ASP entering Q1 is said to be at 0.38 per watt. I did quick math for both Jinko and Canadian. Their average selling ASP for three-quarters was $0.53 and $0.56 respectively. Q4 is supposed to be low $0.40s for Jinko so add 2 cents to Canadian’s ASP making it $0.46. The point I want to make is selling modules at the same volume as 2016, but at an average of $0.38 means loss of $665M in revenues, just for three-quarters.

The situation is confusing as far as costs are concerned. It is apparent that CSIQ is not producing from Thailand in relatively high volume so that they could be doing worse than JKS. CSIQ, on the other, hand plant sales, so the bad module sales can be camouflaged a bit.

I think there is very real possibility that EPS is going to be small or perhaps lost in 2017. In the case of Chinese companies, the outlook for 2017 will be only managed by Q1, so clarity will have to wait, but some sense of situation will be known by Q4.

I am confused about the levels solar stocks trade currently, but I am somewhat unfair in this assessment. I forget they have lost more than 40% in last year, and only to me, they seem still high. FSLR is probably my most obvious example, and CSIQ being couple dollars off my target, JKS is likely to be cheaper at this point that I would suspect it to be but more pieces of the puzzle about Power sale, will clear that for me with Q4 statements.

I have not made good on holding to Pattern, on the other hand, NEP has moved handsomely. What adds salt to a wound, NYLD which I sold for PEGI is basically at the price I sold. So all yieldcos are up, of course, but the one I have.

I can predict the pattern but can not pick the name (Pattern as a name did not work. LOL)

I am going to be curious as this year goes by if the strategy holds or proves me wrong.

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Canadian issued news about Ontario plants sale. They sold all of them now.

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2 hours ago, odyd said:

Canadian issued news about Ontario plants sale. They sold all of them now.

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The sale price is what they paid for the projects in 2015.

 

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The sale price is what they paid for the projects in 2015.
 

$8 US less, but that could be an adjustment for exchange of CAD dollar


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On ‎2‎/‎3‎/‎2017 at 5:49 PM, odyd said:

I have a bit of time to put few more views in front of you on the subject of 2017.

Thanks for your thoughts.  You're right, sooner or later execution (can these companies make more than a few pennies per quarter?) will matter.  And I think the answer to that is, right now, no one knows.

The giant JKS order gives me hope that there is a market for the product.  The question becomes, can the producers make money on what have now become razor-thin margins?  That is what we're all waiting to see.  Yes, they can survive--but surviving is not prospering.

As I've mentioned before, I harbor no illusions about returning to former glory.  These days, all I want is a bit of good news every once in a while to provide a little boost so I can sell some trading positions for small gains--the old "stealing deck chairs off the Titanic" metaphor.  Any such short-term gains will evaporate again over time until the above situation becomes clearer, providing renewed trading entry positions.

As usual, good luck to us all!

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I bought few shares of CSIQ today, it will be my open door position.

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