Canadian Solar Inc.
) inked an agreement with China Perfect Machinery Industry Corp.
for the supply of 32 megawatt (MW) of solar photovoltaic ("PV")
modules for a solar power project in China. Investors greeted the
news positively with the share price moving up 13.4% on Nov 13,
CANADIAN SOLAR (CSIQ): Free Stock Analysis
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Per the contract, Canadian Solar will use its high performance
CS6X-P modules, which have a power output of 295 Wp and 300 Wp,
for the project. These modules also carry a warranty period of 10
years on materials and workmanship and a 25-year warranty on
linear power output performance. With respect to quality control
inspections and testing, these modules have received key
international certifications. The company has already started
module deliveries and expects to complete shipments by this
There has been a rapid increase in solar product demand from
China in the fourth quarter of 2013. We note that the solar
market has in the recent past suffered from an inventory glut and
falling average selling prices. But with an improving
pricing scenario and more striking payment options, Canadian
Solar believes that China will lead the solar PV market this
Canadian Solar caters to a geographically diverse customer base
spread across its key markets in Germany, Spain and the U.S., as
well as emerging market opportunities in France, the Czech
Republic, Italy, South Korea, Canada, Japan and China. Canadian
Solar is a vertically-integrated manufacturer of solar modules.
The company's China based manufacturing assets give it a distinct
cost advantage over its peers. Being a low cost solar module
producer, Canadian Solar focuses on delivering high-performance
Recently, it reported earnings of 56 cents per share in the third
quarter of 2013, reversing its loss of $1.01 per share in the
year-ago quarter. The strong performance in the reported quarter
was driven by an increase in shipment volume and higher revenues.
Canadian Solar has already secured 1,015 MW of geographically
diversified utility-scale project pipeline, which extends
visibility on revenue, profitability and cash flow of its total
solution business for the next two to three years. This business
accounted for 41.1% of total revenues in the third quarter.
The company presently holds a short-term Zacks Rank #2 (Buy).
Other stocks that are worth considering in the solar space are
First Solar Inc.
Trina Solar Limited
Enphase Energy, Inc.
), all with the same rank as Canadian Solar.