Stock Alert for Canadian Solar Inc. (CSIQ)

Canadian Solar Inc.  (CSIQ) is a vertically integrated provider of ingots, wafers, solar cells, solar modules and other solar applications.  It designs, manufactures and delivers solar products and solar system solutions for on-grid and off-grid use to customers worldwide. With operations in North America, Europe, Australia and Asia, CSIQ provides premium quality, cost-effective and environmentally-friendly solar solutions to support global, sustainable development. CSIQ reported shipments of 803 megawatts (MW) for its fiscal year 2010, compared to shipments of 310 MW for fiscal year 2009.

Share Statistics (20-Dec-11)   FY












Symbol CSIQ Revenue, $Mn 630.96 1,495.51 137.0% 377.18 499.64 32.5%
Current price $2.95 Gross marg. 12.4% 15.3% 23.4% 17.3% 2.4% -86.1%
52wk Range: $2.07-$16.79 Oper. margin 8.0% -6.2%
Avg Vol (3m): 1,083,810 Net margin 3.6% 3.4% -5.6% 5.4% 8.8% 63.0%
Market Cap. 127.30M              
Shares Outstanding 43.15M EPS, $ 0.60 1.16 93.3% 0.47 -1.02 -317.0%

Source:, SEC Filings.

Investment Highlights

Shares of Canadian Solar Inc. (CSIQ) jumped as much as 42% to $3.13 Tuesday, boosted by news that its wholly owned subsidiary, Canadian Solar Solutions Inc. (CSSI), has inked a sales deal with TransCanada Corp. (NYSE: TRP), whereby TransCanada will acquire from the Company an 86 megawatts AC solar project portfolio for about 470 million Canadian dollars.

CSIQ shares have gained 20.9% in the last five days and 24.0% in the last month.  Year-to-date, the stock is down 77.1%.

Under terms of the companies’ agreement, CSSI will provide TransCanada with 9 fully-operational and commissioned utility-scale solar projects across the Province of Ontario which are expected to come into service between late 2012 and mid-2013.

These projects are all contracted assets under Ontario’s Feed-In Tariff Program. In addition to securing construction finance, CSSI will provide turnkey engineering, procurement and construction services as well as being the supplier of major components to the projects. All solar PV modules used in the portfolio will be manufactured at CSIQ’s manufacturing facility in Guelph, Ontario.

Shawn Qu, chairman and CEO of CSIQ, stated that this agreement with TransCanada is a true achievement for the solar industry in Canada, and an important milestone for the Company as it continues to expand its total solutions business to promote the expansion of solar power worldwide.

“We are proud of our association with TransCanada, one of North America’s strongest and most successful energy infrastructure companies, which have chosen to partner with us for their entry into the Solar PV space. We look forward to a successful cooperation with TransCanada.”

Just last week, CSIQ announced it had supplied 2.5 MW of solar modules for two solar projects — a rooftop system and a carport — constructed by Siemens for the University of Murcia, Spain. For both projects, Siemens used CSIQ’s MaxPower CS6X modules, the Company’s utility-scale module series. Due to its larger size, power and performance, MaxPower cuts balance of system costs per watt by optimizing tracker and racking space.

Shares of CSIQ gained $0.74 to close at $2.95.  Over 3.45 million shares traded hands during the session, versus the 10-day average of just 382.55 K.  Over the last 52 weeks, the stock has ranged from a low of $2.07 to a high of $16.79.  It is currently above its 50-day moving average of $2.69 and below its 200-day moving average of $5.97.


Financial Summary

CSIQ reported net revenue of $499.6 million for the third quarter of 2011, up 3.7% from $481.8 million for the second quarter of 2011 and up 32.5% from $377.2 million for the third quarter of 2010.  Total solar module shipments for the latest period were 355 MW, compared to total module shipments of 287 MW for the second quarter 2011 and 200 MW for the third quarter of 2010.  Total solar module shipments for the third quarter of 2011 included 19.4 MW used in the Company’s total solutions business.

Gross profit in the third quarter of 2011 was $11.9 million, compared to $63.7 million in the second quarter of 2011 and $65.3 million in the third quarter of 2010.  Gross margin was 2.4% in the third quarter of 2011, compared to 13.2% in the second quarter of 2011 and 17.3% in the third quarter of 2010.  The sequential and year-over-year declines in gross profit and gross margin were primarily due to lower average selling prices and approximately $36.1 million in non-cash inventory write-offs and non-cash loss on firm purchase commitment in the third quarter of 2011.

CSIQ realized a net loss of $43.9 million, or $1.02 per diluted share, for the latest perid, compared to a net income of $7.1 million, or $0.16 per diluted share, in the second quarter of 2011, and net income of $20.3 million, or $0.47 per diluted share, in the third quarter of 2010.

As of September 30, 2011, the Company had $621.1 million in cash, cash equivalents and restricted cash, compared to $686.3 million as of June 30, 2011, and $476.2 million as of December 31, 2010. The sequential decline in cash, cash equivalents and restricted cash was due to a decrease in restricted cash, as the Company reduced its short-term borrowings.


Financial Strength (20-Dec-2011)




S&P 500

Quick Ratio (MRQ) 0.81 2.73 2.05 0.78
Current Ratio (MRQ) 1.11 3.32 2.80 1.15
LT Debt to Equity (MRQ) 29.89 20.90 14.16 106.21
Total Debt to Equity (MRQ) 183.60 40.38 22.78 142.68
Interest Coverage (TTM) 1.23 13.24 1.61 26.53

Source:, SEC Filings

Technical Analysis


CSIQ is within its Bollinger Bands. This is a normal condition suggesting that it is neither overbought nor oversold relative to the recent levels.

CSIQ’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

Comparative Analysis

Company Name Ticker Price per Mrkt. Cap. P/E P/S
Dec-20-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
Hanwha Solarone Co. Ltd. HSOL 1.08 90.86M n/a n/a 0.09 0.11
SunPower Corp. SPWR 5.45 545.95M 77.86 13.97 0.22 0.20
Yingli Green Energy Hold. Co. Ltd. (ADR) YGE 4.10 648.58M 9.53 n/a 0.28 0.32
Suntech Power Holdings Co., Ltd. (ADR) STP 2.29 413.46M n/a n/a 0.14 0.17
Semiconductor – Specialized Median       10.29 n/a 1.47 n/a
Canadian Solar Inc. CSIQ 2.95 127.30M n/a n/a 0.07 0.08

Source: Thomson Financial

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