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Canadian Solar Inc. (CSIQ - Analyst Report) 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, 2013.

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 month.

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 year.

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 modules.

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. (FSLR - Analyst Report), Trina Solar Limited (TSL - Snapshot Report) and Enphase Energy, Inc. (ENPH - Snapshot Report), all with the same rank as Canadian Solar.

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