Canadian Solar Inc.

CSIQ Details

Canadian Solar Inc. (NASDAQ: CSIQ) is the solar power and battery company. The Company is the provider of solar power products, services and system solutions with operations in North America, South America, Europe, Africa, the Middle East, Australia as well as Asia.

Financial Results

• The company has released financial results for 3Q ended September 30, 2023. It has witnessed 39% rise in solar module shipments YoY to 8.3 GW. Its net revenues stood at $1.85 Bn, with the 16.7% gross margin as well as net income attributable to Canadian Solar stood at $0.32 per diluted share.
• It delivered robust profitability in Q3 FY 2023 with the continued progress on the capacity diversification, despite lower-than-expected market demand growth because of increased interest rate environment driving higher inventories in certain markets.
• The company’s revenue in Q3 FY 2023 was sequentially lower for the Recurrent Energy business. It monetized 18 MWp Hiroshima Suzuhari project in Japan as well as several smaller but collectively meaningful projects in Taiwan.

Key Updates

CSIQ announced that e-STORAGE, which is the part of the Company's majority-owned subsidiary CSI Solar Co., Ltd., would be launching SolBank 3.0, the latest iteration of the utility-scale energy storage system.

Outlook

The outlook is subject to uncertainty regarding the customer demand, project construction and sale schedules, product sales prices as well as costs, etc. For Q4 FY 2023, the company is expected to post total revenue in between $1.6 Bn - $1.8 Bn.

Fundamental Valuation

P/E Based Relative Valuation (Illustrative)

Key Risks

CSIQ is exposed to the risks related to the supply chain constraints, geopolitical conflicts, the state of the solar as well as battery storage market and industry, etc.

Stock Recommendation

The stock has made a 52-week low and high of USD 17.82 and USD 45.29, respectively. The company is exposed to risks like delays in new product introduction, delays in utility-scale project approval process, etc. Therefore, investors should exit the stock.

Hence, a ‘Sell’ rating has been provided on the stock at the closing price of USD 26.43 per share, up by 2.4% as on 28^th December 2023.

Technical Overview:

Daily Price Chart

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.