Canadian Solar (CSIQ)

[Mark 45]

Schroder Investment Management opened a new position in CSIQ in Q1.  2,761,958 shares or 4.762% of the company, the 4th largest shareholder.

 

[Klothilde 85]

CANADIAN SOLAR SUBSIDIARY RECURRENT ENERGY COMPLETES SALE OF MUSTANG SOLAR PROJECT TO GOLDMAN SACHS
https://investors.canadiansolar.com/news-releases/news-release-details/canadian-solar-subsidiary-recurrent-energy-completes-sale

[MVA 24]

36 minutes ago, Klothilde said:

CANADIAN SOLAR SUBSIDIARY RECURRENT ENERGY COMPLETES SALE OF MUSTANG SOLAR PROJECT TO GOLDMAN SACHS
https://investors.canadiansolar.com/news-releases/news-release-details/canadian-solar-subsidiary-recurrent-energy-completes-sale

This particular Mustang plant was in operation since Q3/2016. Probably recovered some portion of its cost with electricity sells by now.

But stock is simply dead! Volume is ridiculous... Nobody sells & nobody buys...

Edited May 16 by MVA

[Klothilde 85]

CANADIAN SOLAR SCHEDULES FIRST QUARTER 2019 EARNINGS CONFERENCE CALL FOR MAY 30
http://investors.canadiansolar.com/news-releases/news-release-details/canadian-solar-schedules-first-quarter-2019-earnings-conference

[MVA 24]

On 5/13/2019 at 10:27 AM, MVA said:

CNY continue to fall: 6.87/USD as of now. Step by step increasing margin for Canadian solar!

USD/CNY   6.9131 as of now... steadily moving to $7

Edited May 17 by MVA

[Mark 45]

Might they raise FY guidance in light of Mustang and Brazil?  Not saying it'll be a huge raise, but do you numbers junkies think its possible?  Or perhaps that was all factored in.

[Klothilde 85]

I'll let somebody else answer because I have a horrible feeling regarding this company.

I think some said earlier the largest revenue chunk of Brazil was likely going to come in when these projects are built, i.e. 2020/21.

[SCSolar 83]

5 hours ago, Mark said:

Might they raise FY guidance in light of Mustang and Brazil?  Not saying it'll be a huge raise, but do you numbers junkies think its possible?  Or perhaps that was all factored in.

I would believe that Mustang and Brazil was factored into guidance.

Their guidance is likely around 7500MW for revenues. That would place project sales and EPC work at around $1.5-1.6B.

 

Brazil is a pre- construction sale. That makes very little money up front. It is the services and sales where they make the money. The Construction is supposed to start later this year. That would likely push the bulk of revenues from module sale out to 2020/2021 and a majority of the EPC services out then as well.

[Mark 45]

Another hobo sighting:

Evaluating Canadian Solar's Q4 2018 Earnings Selloff 
https://seekingalpha.com/article/4265136

[Klothilde 85]

Good Lord I'm taking the kids on a trip till wednesday but when I'm back I will tear this article to pieces. No word on project risk in China, Mexico, etc. Be careful you guys. Didn't this guy push LDK at one point?

[explo 706]

1 hour ago, Klothilde said:

Good Lord I'm taking the kids on a trip till wednesday but when I'm back I will tear this article to pieces. No word on project risk in China, Mexico, etc. Be careful you guys. Didn't this guy push LDK at one point?

Above all he pushed TSL post financial crises (maybe before and during too, that was before my time) and if I remember correctly "bashed" CSIQ (as much as he would bash anything) post its 2009 accounting scandal. His view on LDK was more opportunistic if I remember correctly (as a previous LDK and then SOL pusher myself).

Mostly he was right. Of the many solars that are no longer listed TSL at least produced some return for shareholders.

[SCSolar 83]

5 hours ago, explo said:

Above all he pushed TSL post financial crises (maybe before and during too, that was before my time) and if I remember correctly "bashed" CSIQ (as much as he would bash anything) post its 2009 accounting scandal. His view on LDK was more opportunistic if I remember correctly (as a previous LDK and then SOL pusher myself).

Mostly he was right. Of the many solars that are no longer listed TSL at least produced some return for shareholders.

Hobo was opportunistic. He weaves a nice compelling story. He totally blew his credibility on his pumping of LDK. He used to bash CSIQ because they were not vertically integrated and vertical integration was the way forward according to him. That is why he shifted to LDK and their Poly to module story line. 

 

He trashed CSIQ because they were just buying cells and slapping them into modules. Anyone could do that  he claimed and the real module makers were doing the full production line. Then the markets shifted to mass producers to lower costs and the CSIQ non vertical integration became the way to go. They carried less inventory and had less exposure during the down cycles. CSIQ did not take the massive write downs that others did in part because they did not have the inventory buildups and they did not spend heavily on Capital expenditures like others including Trina. Their worst write down was what $20 or $40M payment to LDK unlike Trina and others that wrote down hundreds of millions  to Billions in contracts and PPnE.

[MVA 24]

Canadian Solar among buyers of 75% stake in Kazatomprom photovoltaic (PV) cell and module production units.

https://renewablesnow.com/news/kazatomprom-selling-75-stake-in-kazakh-pv-production-ops-654654/

[Klothilde 85]

Here are my Q1 metrics you guys.  Just plugged them into estimize as well, wish me luck.  I think Q1 numbers will be close to consensus but I'm getting a vibe that outlook will suck.

Revenue $476.3M
GM 19.1%
GP $91.1M
OPEX -$103.9M
Net Int -$16.9M
forex -$8.0M
Tax +$7.0M
Net income -$30.7M
EPS -$0.49

Any other estimates out there you guys?  Don't be chicken.

[MVA 24]

CANADIAN SOLAR SET A WORLD RECORD OF 22.28% MULTI-CRYSTALLINE CELL CONVERSION EFFICIENCY

http://investors.canadiansolar.com/news-releases/news-release-details/canadian-solar-set-world-record-2228-multi-crystalline-cell

[Mark 45]

Safe to say everyone here is bearish on Chinadian except for MVA?

[SCSolar 83]

3 hours ago, Mark said:

Safe to say everyone here is bearish on Chinadian except for MVA?

I expect a good loss from CSIQ in Q1. I expect a profit for the full year based on current guidance. I expect 2020 will be les sprofitable than 2019 and once the Japan projects are history, for them to stay in the $1-$2 EPS in most years. To me that is a $10-$18 price range for the next 2 + years.

[Klothilde 85]

CANADIAN SOLAR SIGNS 1,800 MW MODULE SUPPLY AGREEMENT WITH EDF RENEWABLES NORTH AMERICA - LARGEST MODULE SUPPLY AGREEMENT IN THE COMPANY'S HISTORY
http://investors.canadiansolar.com/news-releases/news-release-details/canadian-solar-signs-1800-mw-module-supply-agreement-edf

hmm... how come so many "fantastic news" PRs ahead of the ER?

[solarpete 101]

44 minutes ago, Klothilde said:

hmm... how come so many "fantastic news" PRs ahead of the ER?

Because as you've pointed out to all of us before, ''the market is forward-looking''?

[Mark 45]

I was going to dump my remaining shares before the close, but I like this deal.  Everyone's so bearish, maybe time to hang onto those shares and roll the dice on some positive forward guidance.  Though this is clearly gambling at this point.  Only positives I can see are institutional support and this supply agreement.  But maybe all the excuse big money needs to run this up toward 19 tomorrow. 

[Klothilde 85]

Good Gracious, Dr. Qu hurt in an accident and naming an interim CEO while he's in the hospital.  Let's wish him all the best.
http://investors.canadiansolar.com/index.php/news-releases/news-release-details/canadian-solar-announces-appointment-yan-zhuang-acting-chief

[Klothilde 85]

So what's the take so far you guys?  I won't be able to listen to the con call so keep those insights coming please.

What I've noticed so far:
-  Module ASP in Q1 probably dropped to around 27 cts
- Strong module shipments in Q2, however to hit the revenue guidance they need around $400M in project revenue, which points to another big project sale in Q2 besides Mustang and Aguascalientes, probably in the U.S.
- Margin drop in Q2 is a concern, even though they blame it on Mustang.  A quick hack shows they'll need an average GM of 19% in H2 to hit the EPS consensus for the year of 2.23.  I think it's a bit of a stretch...

[SCSolar 83]

1 hour ago, Klothilde said:

So what's the take so far you guys?  I won't be able to listen to the con call so keep those insights coming please.

What I've noticed so far:
-  Module ASP in Q1 probably dropped to around 27 cts
- Strong module shipments in Q2, however to hit the revenue guidance they need around $400M in project revenue, which points to another big project sale in Q2 besides Mustang and Aguascalientes, probably in the U.S.
- Margin drop in Q2 is a concern, even though they blame it on Mustang.  A quick hack shows they'll need an average GM of 19% in H2 to hit the EPS consensus for the year of 2.23.  I think it's a bit of a stretch...

Q1 was proped up by a 16.1M CVD reversal and a 7.5M tax credit. Else the loss would be pushing pushing $0.68

 

Q2 guidance is suggesting breakeven to slightly profitable based on top end revenues and margins. The guidance is suggesting $151M in gross profits. The Opex should climb ased on about $12M based on 500MW of added shipment costs.

[Mark 45]

ASP in Q1 was 30 cents

[SCSolar 83]

Interesting quote in the ER regarding guidance. I do not recall them ever making this claim in an ER. They have discussed in the past bookings for the year.

" Separately, in our MSS business, we are currently running with about 50% to 60% of our long-term capacity booked. We have historically left some capacity to meet the needs of higher margin near-term sales. This has been a very successful strategy and remains an important element of our planning, execution and track record of success."

 

From the reading of it. their long term capacity for the second half looks to have about 5GW of module capacity. 50 to 60% of that is 2.5-3GW is on the books. The second half guidance is suggested at around 4.3GW.  This suggests they need to book 1.3-1.8GW  still to meet full year guidance.   That would be an 86% target capacity rate presuming capacity being added in the second half comes online for a 50% utilization. .

 

There would be upside of around 350MW a quarter for Q3 and Q4 based on target module capacity between June and End of year getting 50% utilization. That is an upside potential of >$200M in earnings upside for the full year.

 

 

[Mark 45]

They had also mentioned the possibility of a 10% rise in module ASPs in the back end of the year once China ramps up.  They were at .30 in Q1, but noted that they had slid a little (not sure if they gave a number, he was kinda mumbling or my ears aren't what they once were), but if we're to assume they're around 28 cents now, that 10% increase later in the year due to potential shortages, that would put them back around 30/31 cents.

[solarpete 101]

On ‎5‎/‎29‎/‎2019 at 4:39 PM, Mark said:

I was going to dump my remaining shares before the close, but I like this deal.  Everyone's so bearish, maybe time to hang onto those shares and roll the dice on some positive forward guidance.  Though this is clearly gambling at this point.  Only positives I can see are institutional support and this supply agreement.  But maybe all the excuse big money needs to run this up toward 19 tomorrow. 

Congrats--good move!  Held my trading shares as well.  Will sell a few more around $22-23 if it gets that high.

[Mark 45]

7 minutes ago, solarpete said:

Congrats--good move!  Held my trading shares as well.  Will sell a few more around $22-23 if it gets that high.

Congrats to you as well.  Right there with you, aiming for 22-23 as well.  Not sure how patient I'll be with that target, however, given Trump's antics and effects on the market. I also made a little extra cash on a day trade this morning too.  Sold it too early, but sticking to my spreadsheet trading given the trade war nonsense.  

[SCSolar 83]

11 hours ago, Klothilde said:

So what's the take so far you guys?  I won't be able to listen to the con call so keep those insights coming please.

What I've noticed so far:
-  Module ASP in Q1 probably dropped to around 27 cts
- Strong module shipments in Q2, however to hit the revenue guidance they need around $400M in project revenue, which points to another big project sale in Q2 besides Mustang and Aguascalientes, probably in the U.S.
- Margin drop in Q2 is a concern, even though they blame it on Mustang.  A quick hack shows they'll need an average GM of 19% in H2 to hit the EPS consensus for the year of 2.23.  I think it's a bit of a stretch...

Looking at the numbers I find reasonable

 

module margins 22%

other MSS 25%

project COD/NTP 10%(Q2 COD 5%)

 

Rev

Q / Total / (Module) / (OtherMSS) / (Project)

2 / 1001 / 580 / 80 /341

3 / 1157.5 / 598.125 /80 /479.375

4 / 1157.5 / 598.125 /80 /479.375

 

Gross

Q /Total /Module /OtherMSS / Project / Margin

2 / 164.65 / 20 / 17.05 / 16.5%

3 / 199.525 / 131.588 / 20 / 47.94 / 17.24

4 / 199.525 / 131.588 / 20 / 47.94 / 17.24

 

Opex and Interest

Q2 = 140

Q3 = 142

Q4 = 155

 

Q / Net after Taxes /EPS

2 / $21M / $0.35

3 / $48.9M / $0.83

4 / $37.85 / $0.64

 

Upside for Q3 and 4 with JPN projects sold is $16M/Q or $0.27/share EPS

Upside for added module sales $11MNet or $0.1874

 

Upside EPS Q3/4 = $0.45/share

 

Upside EPS Q3 = $1.28

Upside EPS Q4 = $1.09

 

That upside with Q3 EPS pushes 2019 estimates plus a dime or 2.

 

Moving into 2020 I expect projects sales revenue  to drop significantly as a whole of revenue as the move to predominately  NTPrevenue  vs predominately COD revenue of 2019. 2020 Module margins are likely to maintain in the 20% +/- range.

 

 

 

 

 

 

[Klothilde 85]

Well I'm starting to go over the numbers but first of all kudos to CSIQ for convincing the market that business is getting better and better despite margins heading south 😉

I need your help to make sense of the ASP/CPW numbers you guys.  They say ASP was 30 cts in Q1 and they state MSS GM at 21.6%.  Makes a CPW of 23.5 cts.  Which is kinda high to me in light of their low 20s CPW claim in the Q4 con call and the Q1 rev/shipment hack that points to 26-27 cts (pointed out by Philip Shen as well).

Also CSIQ's ASPs have historically been below the mono-PERC spot prices, and mono-PERC has been around 27-28 cts for some time now.

Help me out you guys please.