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19 hours ago, SCSolar said:

The article is clearly off a bit.

When you find yourself thinking you know more than Finlay Colville you might want to take step back and reevaluate things. He is perhaps the most knowledgeable person on the solar industry.

In regards to First Solar, the company has said it plans on making ~$2.50 this year and should get the S6 manufacturing wrinkles ironed out by the end of the year. With costs around 22 cents and a backlog averaging 37 cents for the next two years, 2020-21 will be extremely profitable.

That gives the company 2 years to get efficiency up to 20%. When that happens, it will have around 9GW of modules at a mid teen cost. With solar reaching cost parity and battery technology improving, it is doubtful prices will far much further.

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4 hours ago, Luz del Norte said:

When you find yourself thinking you know more than Finlay Colville you might want to take step back and reevaluate things. He is perhaps the most knowledgeable person on the solar industry.

In regards to First Solar, the company has said it plans on making ~$2.50 this year and should get the S6 manufacturing wrinkles ironed out by the end of the year. With costs around 22 cents and a backlog averaging 37 cents for the next two years, 2020-21 will be extremely profitable.

That gives the company 2 years to get efficiency up to 20%. When that happens, it will have around 9GW of modules at a mid teen cost. With solar reaching cost parity and battery technology improving, it is doubtful prices will far much further.

Well I spent 30 years in bleeding edge technology. In Tech the product life cycles run around 5 years before the product is basically obsolete. To give you an example, a company I worked for acquired a next gen product when they bought a startup for $400M. They brought that product out as a high speed high density product. I looked at it and said  it was too small. People thought I was crazy. 1.5 years later we had 10 times the density and speed.  2 years after that we had new products that were 4 time faster than that with tech that was another 10 fold faster. Then the density climbed. Each and every next gen bleeding tech and IEEE spec  all became standards.

 

The fact is solar is technology and it is not coal nor gas. There is new tech every 3 years  sometimes incremental sometimes revolutionary.  There is always early adopters and as the product stays out there it becomes the standard generally within 2 years and has a life of 2 -3 active years before it becomes obsoleted by the next gen. That is the fact of Tech which solar is. Sure it is a commodities business but it is tech.

 

The Tier 1's and the next gen modules are not new tech rather incremental tech. Right now Bi Facial is the next gen as it can gain 5-30% more power and is optimal for Ground mount and commercial at minimal cost impact. In fact much of the change in bifacial is just the back eva.

The new half cell still uses the same Si tech but cuts the cell in half. That gains power by lower heat and resistance. It is not a huge leap but incremental.  The shingling of the cells is not new either as that was first developed in the 60's. Anti reflective coating and etching has been done now for going on 10 years.

 

As far as larger panels, they have had 72 cell modules for 8-10 years. So the size relative has not changed. 

 

But then again, FSLR new Series 6 is a new format a large format they never made prior. So they are prone to some of the same issues.

 

You can say what you want about the author,  but 72 cell modules is the mainstay of ground mount systems.

 

All I did was say I disagreed and gave a reason based on real customer demand  to point to why I disagree with some of his points.

 

As for FSLR, as I noted, they are in a protected market for now. They are a 1 trick  market as of now and can milk it. I believe they will have issues internationally now and in the future as their  future costs are out of line with market costs these days. 

They will not have 9GW of  U.S. protected markets in the US come 2022. Your target costs of $0.22 is where similar products are selling at today. You can expect those products to gain another 10-20% lower costs in the next 2 years. In fact the targets being suggested in China by 2025 is in the $0.15 range.

 

Where is First Solar earnings when they are selling 8GW of modules at $0.04/watt gross and  all their US pipelines are sold? 

 

We can disagree to disagree.

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Nebras Power Investment Management, a Dutch affiliate of Nebras Power, has announced the acquisition of an 80 per cent stake in a portfolio of four major solar projects in Brazil (482.6 MW) from Canadian Solar.

https://www.powerengineeringint.com/2019/11/01/nebras-power-acquires-majority-stake-in-brazilian-solar-projects/

Edited by MVA
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6 hours ago, Klothilde said:

Read the PR's carefully, your April PR is an agreement to sell the plants to Nebras. MVA PR is Nebras announcing it has completed the transaction.

 

" announced today the signing of an agreement for the sale of its 80% interest in a 482.6 MWp portfolio of contracted solar projects in Brazil to Nebras Power Investment Management B.V. , a Dutch affiliate of Nebras Q.P.S.C. "

 

MVA PR

" Nebras Power Investment Management, a Dutch affiliate of Nebras Power, has announced the acquisition of an 80 per cent stake in a portfolio of four major solar projects in Brazil. "

 

It basically means it took 6 months from the announcement  of the intent to sell to Nebras to all the terms financing and signatures required to be completed.

 

Now CSIQ can book the sale in the Q4 Earnings and start counting the sales of modules and services as revenue

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6 hours ago, Klothilde said:

Below is a quote from August 15 ER CC. Which means that out of 80% of 482.6 MW project 30% were closed in Q3 and 70% of 80% is already closed in Q4.

"Last week we completed the sale of around 30% of Brazil's 482.6 megawatt late stage project portfolio. We expect to complete the sale of the remaining Brazilian projects in the coming months."

https://seekingalpha.com/article/4285939-canadian-solar-inc-csiq-ceo-shawn-qu-q2-2019-results-earnings-call-transcript?page=3

Edited by MVA

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11 minutes ago, MVA said:

Below is a quote from August 15 ER CC. Which means that out of 80% of 482.6 MW project 30% were closed in Q3 and 70% of 80% is already closed in Q4.

"Last week we completed the sale of around 30% of Brazil's 482.6 megawatt late stage project portfolio. We expect to complete the sale of the remaining Brazilian projects in the coming months."

https://seekingalpha.com/article/4285939-canadian-solar-inc-csiq-ceo-shawn-qu-q2-2019-results-earnings-call-transcript?page=3

MVA a question for you what project do they have on the books that they are looking at closing in Q3 or Q4, that adds roughly $200M in revenue at roughly 38% margins or ~$77M in gross? Would this be a 60-70MW Japanese project sold to the Yieldco? I have not heard a PR on it's sale so I might presume this is a Q4 sale now and not a Q3 sale.

 

https://seekingalpha.com/article/4285939-canadian-solar-inc-csiq-ceo-shawn-qu-q2-2019-results-earnings-call-transcript?page=3

 

"The aforementioned revenue forecast does not include the potential sales of a project that may be completed in the third quarter. If the transaction is closed in time, total revenue for the third quarter is expected to be in the range of $970 million to $1 billion and gross margin between 27% and 29%. "

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2 minutes ago, SCSolar said:

MVA a question for you what project do they have on the books that they are looking at closing in Q3 or Q4, that adds roughly $200M in revenue at roughly 38% margins or ~$77M in gross? Would this be a 60-70MW Japanese project sold to the Yieldco? I have not heard a PR on it's sale so I might presume this is a Q4 sale now and not a Q3 sale.

 

https://seekingalpha.com/article/4285939-canadian-solar-inc-csiq-ceo-shawn-qu-q2-2019-results-earnings-call-transcript?page=3

 

"The aforementioned revenue forecast does not include the potential sales of a project that may be completed in the third quarter. If the transaction is closed in time, total revenue for the third quarter is expected to be in the range of $970 million to $1 billion and gross margin between 27% and 29%. "

It is Japanese project. See quote below and the link:

"Huifeng Chang

But the major portion of the potential like we provided two numbers for the Q3. Our revenue guidance and that difference is mainly for the project in Japan. Other projects we believe most likely will be closed in Q3. But for the project in Japan, we think, we may be very likely able to close it in Q3, but there's a probability it may slip into Q4."

https://seekingalpha.com/article/4285939-canadian-solar-inc-csiq-ceo-shawn-qu-q2-2019-results-earnings-call-transcript?page=5

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An earnings trade from these levels seems too easy, eh?  It seems so easy to me that I can't bring myself to buy.  Been trading FSLR several times a day since earnings successfully.  But I feel like I need to turn attention to this free CSIQ lunch sitting here.  And I can't pull the trigger.

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20 hours ago, Mark said:

An earnings trade from these levels seems too easy, eh?  It seems so easy to me that I can't bring myself to buy.  Been trading FSLR several times a day since earnings successfully.  But I feel like I need to turn attention to this free CSIQ lunch sitting here.  And I can't pull the trigger.

I agree with you.  Too many times, solar stocks have actually dropped, sometimes significantly, after good earnings and guidance.  Earnings are a crap shoot these days.

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Here's my Q3 estimates which I also used for estimize. Other estimates out there?

Rev $842.9M
GP $219.1M
OPEX & Net Int $130.9M
EBT $88.2M
Tax $18.4M
NI $69.9M
#shares 60.3M
EPS $1.16

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Just now, Klothilde said:

Here's my Q3 estimates which I also used for estimize. Other estimates out there?

Rev $842.9M
GP $219.1M
OPEX & Net Int $130.9M
EBT $88.2M
Tax $18.4M
NI $69.9M
#shares 60.3M
EPS $1.16

Klothilde, a question: How many Q3 project sales is included into your estimation? Thanks.

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I didn't estimate a module / project rev split but my guess is they'll have sth. like $200 - $250M in projects.  I assume they will recognize the big japanese project (Yamaguchi) in Q4 cuz there still was no PR.

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1 hour ago, Klothilde said:

Here's my Q3 estimates which I also used for estimize. Other estimates out there?

Rev $842.9M
GP $219.1M
OPEX & Net Int $130.9M
EBT $88.2M
Tax $18.4M
NI $69.9M
#shares 60.3M
EPS $1.16

Just curious where you get the spike in revenue above guidance if the Big Japan project is not in the sale? I have earnings above mid range at $800M with gross at $203.4M. My  margins are at 25..4%. Module margins come in at 23.2% and project margins come in at 31.4%.

The key in the con call was margins 24-26% being positively impacted by project revenues. That suggests module margins below in the 21-23% range.

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Bit the bullet and added some here in the 16.80s.  This just seems too cheap, even with all the headwinds.  I'll sell half of what I bought if it starts moving up before the close, otherwise I'm taking the earnings gamble.

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52 minutes ago, Mark said:

Bit the bullet and added some here in the 16.80s.  This just seems too cheap, even with all the headwinds.  I'll sell half of what I bought if it starts moving up before the close, otherwise I'm taking the earnings gamble.

bought some myself 16.75 range. Looking for a short term trade. Q3 looks good, Q4 looks like it should be strong and 2020 should be reasonably strong with the disposal of the rest of the Japan projects.

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Earnings out. Earnings under a buck, revenue tilted slightly below midrange, margins above guidance. Q4 guidance light with revenues similar to Q3 but margins 19-21%. Projects slipping from Q4 to Q1(Japan?). Whacked after hours initially down 22% but climbing back some.

 

https://finance.yahoo.com/news/canadian-solar-reports-third-quarter-210000179.html

 

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Scanning the report, it looks pretty good!  Solid earnings, beating expectations in a quarter that is generally characterized as challenging for solar manufacturers.  And projects slipping simply means more earnings ahead, when they do eventually sell.  No idea why the stock is down on this.  But this frequently happens with CSIQ.  Unless there's some negative information revealed on the call, I expect this to rise, although it may take a few days to start.

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14 minutes ago, SCSolar said:

Earnings out. Earnings under a buck, revenue tilted slightly below midrange, margins above guidance. Q4 guidance light with revenues similar to Q3 but margins 19-21%. Projects slipping from Q4 to Q1(Japan?). Whacked after hours initially down 22% but climbing back some.

 

https://finance.yahoo.com/news/canadian-solar-reports-third-quarter-210000179.html

 

Analysts consensus was $0.8/share result is $0.96... +$0.16

But, as usual, market reaction is brutal.... Let's see what conference call bring us...

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9 minutes ago, solarpete said:

Scanning the report, it looks pretty good!  Solid earnings, beating expectations in a quarter that is generally characterized as challenging for solar manufacturers.  And projects slipping simply means more earnings ahead, when they do eventually sell.  No idea why the stock is down on this.  But this frequently happens with CSIQ.  Unless there's some negative information revealed on the call, I expect this to rise, although it may take a few days to start.

Q4 is generally stronger quarters. The fact is they are reporting rather flat shipments and revenues with margins being lower leading to earnings that will be about 40% of Q3 earnings.

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Guidance lowered by 13.8% or $500M even though module shipments was increased by some 800MW. That suggests some $700M in project sales has slipped out of the guidance for 2019. 

Klothhilde had mentioned the China policies and lack of FIT payments was making sales on China. This could be $350M+ of the slipped projects. What would the other $350M be? They just mentioned the Japanese project which is some $250-$300M from Q3 guidance numbers They have more projects that were Q4 slipping out to 2020.

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That was not a good clean call. Several red flags along the project biz.

The first is a near $100M reduction in resale value of projects. That is being blamed on China projects. That is a hefty downgrade in value based on 350MW. The projects are having issues collection the FIT from China and projects are being sold much cheeper due to the inability to get the FITs and projects being dumped. 

 

They indicated they sold a Chinese project but they are having difficulties getting the money from the buyer.

 

They indicated there is some dispute with the buyer in Japan that is pushed out the project from Q3 and from the looks of guidance from Q4 as well.. They expect the dispute to get resolved.

 

Several other projects are being slipped out of 2019 and into 2020. No real explanation given as to why from what I heard.

 

 

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41 minutes ago, SCSolar said:

That was not a good clean call. Several red flags along the project biz.

The first is a near $100M reduction in resale value of projects. That is being blamed on China projects. That is a hefty downgrade in value based on 350MW. The projects are having issues collection the FIT from China and projects are being sold much cheeper due to the inability to get the FITs and projects being dumped. 

 

They indicated they sold a Chinese project but they are having difficulties getting the money from the buyer.

 

They indicated there is some dispute with the buyer in Japan that is pushed out the project from Q3 and from the looks of guidance from Q4 as well.. They expect the dispute to get resolved.

 

Several other projects are being slipped out of 2019 and into 2020. No real explanation given as to why from what I heard.

 

 

There is no dispute, what are you talking about? They said it is exclusively Administrative delay. Minute 29:33. They said loud and clear - there is no dispute with the buyer... 🙂

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