Canadian Solar Inc.
) announced that
Credit Suisse Group
) will provide the company with a one-year tenor loan of up to
$40 million. The loan will be used to finance Canadian Solar's
previously announced acquisition of solar projects in Ontario,
Earlier, in December 2012, Canadian Solar Inc. had acquired the
majority interest in two utility-scale solar power projects in
Ontario from SunEdison Power Canada Inc. ("SunEdison"), a
MEMC Electronic Materials Inc.
). The company has the option to buy two additional utility-scale
solar power projects in Ontario with a total capacity of
approximately 22.5 MW DC. Per the agreement, Canadian Solar can
also purchase a fifth solar project from SunEdison in the
In distinct contrast with its solar peers, Canadian Solar had
a stable balance sheet with a long-term debt-to-capitalization of
22.5% at the end of the first nine months of 2012. As of Sep 30,
2012, the company had approximately $690.8 million in cash, cash
equivalents and restricted cash.
In recent times, Canadian Solar booked positive growth in
Europe, most notably in Germany, offsetting the weakness in the
U.S. market. However, higher volumes were more than offset
by persistently falling average selling prices. Average selling
prices continued to decline as the Euro weakened and Germany
transformed into a new, lower feed-in-tariff regime.
CREDIT SUISSE (CS): Free Stock Analysis
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Looking forward, the company is actively branching out to capture
new opportunities in key solar markets worldwide. The
company continues to see attractive opportunities for growth in
China, Japan and India, as well as other emerging markets in
Asia, Africa and Latin America. Moreover, its specialization at
the downstream total solutions business makes it a higher margin
However, in the near term, the fortunes of Canadian Solar could
be impacted by the industry-wide supply glut, leading to sharply
falling average selling prices, tepid module demand in Europe and
rising competition in the market. Given the industry-wide high
inventory level, we do not foresee any short-term margin
improvement for the company.
Canadian Solar Inc. is one of the world's largest solar
companies. As a leading vertically integrated provider of ingots,
wafers, solar cells, solar modules and other solar applications,
the company designs, manufactures and delivers solar products and
solar system solutions for on-grid and off-grid use to customers
With operations in North America, Europe, Australia and Asia,
Canadian Solar provides premium quality, cost-effective and
environmentally friendly solar solutions to support global,
sustainable development. The company holds a Zacks Rank #3, which
translates into a short-term Hold rating.
In the near term, we would rather advise investors to accumulate
the short-term Zacks Rank #1 (Strong Buy rating) stock
Yingli Green Energy Holding Co. Ltd.