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Canadian Solar (CSIQ)

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Guest Klothilde

Nano you mention that you are in for the long term? I agree that CSIQ has a lot of potential in the short term, but I fail to see the long-term competitive advantage. For me superior proprietary technology is the key to a long-term competitive advantage, and I don't see it at all in CSIQ. In fact these guys have one of the lowest R&D spendings in the industry and one of the highest outsourcing rates. As to the projects: They provide value if you are good in securing project rights at low cost in predetermined tariff regimes like the one in Canada or Japan. When either the tariff or the EPC price are set by competitive bidding the margins of the project business quickly become razor thin. And I'm afraid competitive bidding will be the norm going forward.

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Guest larryvand

It is important to know that some of us who were also bullish on CSIQ in 2012 could NOT predict CSIQ's massive solar losses in 2012. And if I was to take a guess, the same people won't be able to predict 2013 either. The fact still remains that they are still way too many players in this industry and unlike other industries, we hear of consolidation and we don't see consolidation, while all the ones that remain want and need to become bigger, gain market share and be running at 100% utilization. The fact that LDK and STP are still alive, especially in the balance sheet state they are in, is testament to that. One thing is certain. More solar surprises are in store for 2013, both negative and positive. So be ready for lots of volatility. Hopefully more up than down as we are all solar long here. If I was to guess for the big story of 2013, it will be the price of poly that will surprise almost everyone when it doubles from the bottom of 2012. Good luck to all.

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Guest spiritcraft

Question for Nano or others... This is great for CS. I have been saying that projects will be huge in the future for some time due to having a pipeline and for visibility. I remember TSL stating that they too were going to go big into the project side. The question is at what selling price is CSIQ selling these? Are they being made / assembled in Ontario or subject to the tariff? Further, CSIQ, TSL and others, for them to get in the game on US projects what is the selling price with the tariff? Can they get around it and at what cost? I think that the US is ripe for huge growth even outside the SW and SE areas. Without the tariff, we are maybe a year or two away from 10's of GW potential yearly plant installations especially at global cost without the tariff. BOS plays into that heavily but FSLR and SPWR don't have anywhere near the capacity to meet potential demand. How might this all shake out? And what if there was suddenly 10's of GW of utility scale demand? Could certain Chi-Solars go back to a plan for some kind of "manufacturing" in the US? I don't think we are too far away from a real shift in terms of HUGE utility scale demand here and who could meet that demand? Again, TSL had a plan before the tariff to get into everything including installation here to manage BOS? Where do you think this is all headed for CSIQ, TSL and others? Obviously CSIQ is not shut out, neither is SOL but what if?

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Guest littleguyintucson

solarman1 I did not state CSIQ was undervalued now. That was a thread from last year posted by nano frog. But my take on the solars and CSIQ is as follows. There is more money in projects than modules and upstream right now. CSIQ is well positioned in the project pipeline. Some of those projects have very healthy margins. Over half their 2013 revenue target is to be from projects. There is some $1.2B in project pipleine targeted for 2013 as of 4 months ago. It they can earn guidance of 20-25% GM on those projects, then they will generate over $200-$250M in gross profits from them. If modules can maintain profits close to JKS, then you get another $120M for $320-$370M in gross profits. They should run at $280M-$300M in interest and Opex. This would put profit before taxes and expenses at $20-$90. or a mid range of $55M before taxes. After tax this could be $45 or just over $1 a share in earnings. If you are bearish, drop to $37.5M before tax, if you are bullish, pus to $75-$80M before tax. CSIQ is the bet positioned of the Chinese 11 for profits in 2013. ReneSola would be my third pick behind JKS. On a pure valuation, SOL is a better proposition due to the run up of JKS. ReneSola could be profitable in Q2 with the right mix of module shipments, and continues cost reductions if the ASP maintains around $065. This would be barely profitable but in the black none the less. If wafers can creep to $0.27, they are setup nicely. Below $0.25 they are tight on any profits. JKS is operating at full capacity and should be able to gain on their margins from Q3. They could make $0.12 gross per watt come Q2. On 350MW that puts them at $42M in gross profits. That is their current Opex and interest. The recent funding received for expansion should allow a 300MW or more increase in capacity. JKS has a propensity for buying distressed companies. They themselves were founded by acquisition. They might be able to pick up 500MW of capacity There issue like all other is expansion is now debt and not profit expansion. JKS does not have the earnings potential of a CSIQ. Interesting since they have ran more than any solars. JSK does have better potential profitability near term than SOL. Jaso is a dark horse. They have large capacity and could easily expand upstream. Their operating expenses are not bad, they are moving more downstream as a % of shipments and revenues, their 1 for 5 split has reduced their share count to low levels and they have relatively low inventory and costs going forward. They owe a large debt payment this year that they have the cash to pay down. When they do, I expect this to drop interest payments by $7M per quarter.

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Guest larryvand

What did I tell you? Still lots of ups and down ahead... open $4.68 now $4.33... the wall street criminals still have it in for Chinese solars....

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Guest larryvand

CSIQ down 9% from the open. Anyone know why? We have good news and solars go down. Why? What is wall street discounting?

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Guest ILOVEPV

Larry. Trading especially day trading is OK too but let's take a look at solars from a bigger distance. We have big and powerfull oil/gas/nuclear/coil power generation lobbies who started to worry about solars. These guys dominate in the wall street. A problem is there are a lot of private and "near government" money that anxious to be invested with a profit (we have a huge lack of capital effectiveness for the time being). As soon as PV solar electricity reaches a par or becomes cheaper others an avalanche of funds will pour into solars (actually it started already). As for now hold your breath and buy cheap shares. What company stock is going to be the best performer we are unable to predict but if you diversify solar portfolio mistakes will be levelled. The solar stocks made only a tiny fraction of their long term rally. Unless a general stock market collapses as it happened in 2008 I won't be too surprised with 8-12 fold gain from current solar stock prices within next 20-30 months. China's 10Gw in 2013 can be easily "transformed" into 20-25Gw in 2014. A huge rush also is going on in US, Mexico and Latin America. In this environment $2.45 SOL can be "transformed" to $24.5 much faster than anybody thinks. I'm confident that record share prices reached in IPO times will be exceeded for certain solars (not for all of them definetely).

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Guest larryvand

ILOVEPV, I'm not as euphoric as you. Unfortunately we are invested in a commodity market and if anything the last 20 years of investing taught me, commodity markets are riddled with bankrupt companies, low margins and complete technological obsolescence. So my sights are much lower than yours, hopefully before something technological comes along that makes the current factories and equipment obsolete and before someone with big pockets (like LG, Samsung etc..) decides to make a big move and crash all the current small fry solar players.

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Also CSIQ has a debt-to-equity ratio of 418%, which is one of the worst among the solar 11.

That doesn't look correct. How did you arrive at that?

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Guest nanofrogfish_spf

spirit...all modules from the Canadian assembly plant use cells made in China, and are all intended to be sold into the Ontario market. All US sales are Chinese module imports using non-Chinese cells...this ups the cost by a nickle or dime per watt for the cells...but is then just passed along to the US consumer... For a possible explanation for the solar market manipulation on no decernable news...see WinOneGipper's post today over at investorvillage...very very interesting....

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Guest larryvand

Lower margins due to more expensive cells. Must be why CSIQ is leading all solars down today since the open on the U.S. news. Down 12% since the open. However I took this opportunity and bought some at $4.16.

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Guest nanofrogfish_spf

SOL just announced that they opened a subsidiary in Japan. Well I guess better late than never!...lol.

CSIQ’s been there since 2009 (see attachment from IR presentation), and opened its subsidiary in 2010. And looking at the shipment data, SOL’s got a lot of catching up to do...CSIQ’s Q4 numbers were solid, only slightly less than the leader STP.

At least SOL’s on the right track with the kits...CSI has been selling large volumes of these. But isn’t that “proprietary” battery storage comment a little overboard on the sales pitch side...?

On another note, thanks Odyd on that ECN interview (better late than never). Several companies have been ramping up production of this MWT technology (CSIQ, YGE, etc.), and many more appear to be looking to adopt it. It’s starting to get more press also. I can see it having a big impact in the market in 2013...not only does it help lower BOS, but can/will be manufactured for about the same $/W as cells/modules w/o this technology. Once the base process is in place, incremental improvements to efficiency will be much easier and quicker to implement into the production process. CSIQ has targets to get their cells to 23% this year (lab), and hopefully they can beat that.

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Guest nanofrogfish_spf

I can also see the ResidentialAC module being introduced as part of a premium kit offering, and being very popular in the Japanese market.

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Guest sc_solar
He actually said better late then never and also made a positive point/s about SOL. If anyone is pumping SOL, while taking an opportunity to bash CSIQ and question every little thing while giving their actual/fantasy trades its yourself, Klothilde, Pops for starters. Maybe you should stick to the SOL thread. I dont see Nano...spending anytime there. Obviously you can dish it out, but can't take it when someone makes ANY point about SOL thats not a "cheerleader" statement. This site has been infested with former yahoo players that have changed their names and signed up here. Their motives are all too obvious. They are unable to post on yahoo anymore for attempting to decimate several solar boards and in particular CSIQ's. JMHO. Sorry ODYD, just making a point,...but the pattern is becoming obvious here on SPVI.

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Guest spiritcraft

How did this CSIQ vs SOL rivalry begin? I don't get it. I own both and am not about to abuse myself over it! Again, I just don't understand how trashing another company reinforces yours. I would like to see nearly all of these 11 flourish. Most hold multiple names though they have favorites. Any market that allows only one of these to succeed isn't or should not be a desired outcome... Financially or for the Earth's sake. Some will do better than others but I think the shared hope is for eventual massive demand around the world? Not that we can't point out the bad but there are ways of doing so that are not spiteful. Mindless pumping and bashing really have no place here. IMO

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Guest solarman1

Oddy - I agree with sc_solar. Is there anyway to terminate those 'bashers' from posting? I see 'larryvand', "klothilod' are consistently following Nanofish's postings and it is very obvious that they are longs on SOL which is fine but why bash??? This this keeps up, eventually it might discourage members to leave for the better and more informative board. Just my opinion. :)

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Guest Klothilde

He actually said better late then never and also made a positive point/s about SOL. If anyone is pumping SOL, while taking an opportunity to bash CSIQ and question every little thing while giving their actual/fantasy trades its yourself, Klothilde, Pops for starters.

The bashing at the beginning of the thread is evident and is s.th. that I don't like to spread on this board, thas is ALL.

I cannot be a CSIQ basher because I already clearly stated that I favor CSIQ and SOL in the short term and FSLR, TSL, and JASO in the long term. As to CSIQ I see a lot of upside potential through their project business but I also question the long term competitive advantage of the company. If you read my postings carefully you will see that I have critical questions about pretty much ALL companies, including my only current position FSLR. Fair enough?

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Guest spiritcraft

That is definitely fair IMO. I guess some posts come across like your stock sucks but mine is the greatest thing on Earth. Nothing is looking too green today however and throwing stones is definitely not a good idea. Maybe some of us are a bit too sensitive as well.

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Guest larryvand

How did this CSIQ vs SOL rivalry begin? I don't get it. I own both and am not about to abuse myself over it!

It all started with a few CSIQ long Yahoo wackos who felt that as they were losing money and CSIQ was cratering, that they had to come to the SOL board and bash SOL like that was the problem that was ailing CSIQ. One of them thought that every ID posting was some guy named... well, I don't even remember anymore what the name was, camde01 or camdb01 or something like that. And so some other SOL long Yahoo wackos reciprocated. Then Yahoo changed board software to that monstrosity they have now, and while before you could put the Yahoo wackos on ignore and have them go away, the new software allowed the ignored people to flood the board with posts and completely make the board unusable (even though you could not see their post, you can see a line that they posted). On top of that, one of them Yahoo wackos figured out how to delete posts on the new software. And so the boards have become completely unusable dominated by 1 or 2 Yahoo wackos.

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Guest spiritcraft

Was that that cando person or something like that? What a clusterF! The TSL board is insane today... they really crawl out of their holes on days like today.

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Guest larryvand

Yes, something like that. And a clusterF FUBAR is right. That person needs major medical help IMO. I think someone called him a psycho and that's the closest that describes him or her or "it". Probably "it" will be more correct. LOL

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Guest nanofrogfish_spf

After reading about the 85kW sales agreement in Tanzania, I was going to add it to my spreadsheet, but then realized my decimal places didn’t go out that far...lol It's worth noting that there's a CSSKY joint venture office in Nairobi, which borders Tanzania. It was interesting that their modules for these off-grid projects ranged from 15W to 90W. A 15W module??? What are they charging? A triple-A battery?...lol. I checked their website, and could only find their Andes DC Solar Home Off-Grid System, which comes in 20W, 30W and 45W sizes (actually pretty cool little systems...this is the data sheet ). So let’s say their average system is 50W, and they will now have shipped 350kW worth...that’s about 7000 systems. And that means 7000 families in Tanzania now have electricity for probably the first time in their lives...even if it’s just to power a small light at night or a small radio...or maybe even something bigger...like a water pump. I’ve said this before, there is a huge global off-grid market. Bringing point of use power to people everywhere, regardless of how isolated they are. And with this will come demand for electrical devices...and this will help growth and prosperity in developing nations, and will significantly better the overall human condition without polluting our planet to do so.

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Guest nanofrogfish_spf

speaking of Skypower, I just noticed they added 3-more global offices (27 total now), although they aren't in the CSSKY target areas of SA, Africa and the Middle East. But CSIQ could benefit from module supply agreements nonetheless...a nice partner to be in bed with...

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