Canadian Solar Inc.
(
CSIQ
) announced that it has signed a C$93 million (US$93.8 million)
loan agreement with China Development Bank. The loan facility has a
five-year maturity and will be used to partially finance the
previously announced C$185 million (US$186.6 million) acquisition
of a majority interest in 16 solar projects representing
approximately 190MW to 200MW DC owned by SkyPower.
Each of the 16 solar projects was awarded a 20-year power purchase
contract by the Ontario Power Authority. The projects are in the
advanced permitting stage and are expected to commence construction
in 2013 and be fully operational in 2014, with the capacity to
generate over $785 million in revenue.
SkyPower Global is Canada's largest owner and developer of solar
energy projects. SkyPower also has one of the most impressive
pipelines of solar projects in North America. With 250 MW of
awarded power purchase contracts, including 67 MW of installed
operating capacity and more than 2.0 GW at advanced stages of
development worldwide, SkyPower prospects, develops, finances, owns
and operates solar energy projects from the initial discovery
stages through to commercial operation. SkyPower is majority-owned
by Los Angeles-based real estate and infrastructure investment firm
CIM Group.
Canadian Solar is a vertically integrated manufacturer of silicon
ingots, wafers, cells, solar modules, panels and custom-designed
solar power applications. The company designs, manufactures and
delivers solar products and solar system solutions for both on-grid
and off-grid use by customers worldwide. It mainly focuses on
delivering best value in solar with recognized high-performance
modules. Canadian Solar has its module agreements spread worldwide.
Being a low cost solar module producer, Canadian Solar focuses on
delivering high-performance modules. The prospects for Canadian
Solar look favorable based on a geographically diverse customer
base and improving operating efficiencies through its vertically
integrated manufacturing operation.
However, in the near term, we are concerned about the industry-wide
oversupply, leading to sharply falling Average Selling Prices,
tepid module demand in Europe and rising competition in the market.
Moreover, given the industry-wide high inventory level, we do not
foresee any short-term improvement in margins of the company. The
company retains a short-term Zacks #3 Rank (Hold) that corresponds
with our long-term Neutral recommendation on the stock. It mainly
competes with
First Solar Inc.
(
FSLR
) and
Suntech Power Holdings Co. Ltd.
(
STP
).
CANADIAN SOLAR (CSIQ): Free Stock Analysis
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FIRST SOLAR INC (FSLR): Free Stock Analysis
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SUNTECH PWR HLD (STP): Free Stock Analysis
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