Back to top

Image: Bigstock

CSIQ's Subsidiary to Expand Manufacturing Capacity in China

Read MoreHide Full Article

Canadian Solar Inc. (CSIQ - Free Report) recently announced that its subsidiary, CSI Solar, has inked an investment agreement with the municipal government of Yangzhou City in China to add manufacturing capacity in China.

Details of the Agreement

Through the agreement, CSI Solar aims to augment its manufacturing capacity in high-efficiency wafers, cells and modules, as well as battery systems, through a vertically integrated system in Yangzhou's clean energy manufacturing industrial park.

Canadian Solar plans to carry out project development activity in three phases, wherein phase I will comprise adding 14 gigawatts of wafer and cell capacity. This is expected to reach commercial operation in the second half of 2023. However, the execution of phase II and phase III is subject to change, as disclosed by the company.

The agreement tends to assist Canadian Solar in expanding its wafer, cell, module and battery storage amid the rising demand for solar products. This may boost its revenue generation prospects and also aid its margins as upstream raw material costs continue to decline.

Global Solar Market Boom

The global solar market is likely to witness an increased demand scenario supported by various government incentives and rebates, coupled with the falling cost of solar panels and other related technology that makes it affordable for homeowners. Moreover, the need to transition to clean energy sources to curtail climatic conditions adds to the demand.

Also, the advanced technology and system, which ease the process of the installation of solar panels, make it easier for homeowners to shift to solar-based energy for energy requirements. Per the report from Mordor Intelligence, the global solar energy market is likely to witness a CAGR of 12.7% over the 2023-2028 period.

Amid such an expanding market size projection, Canadian Solar’s strategy to increase its manufacturing capacity may prove prudent considering the current supply-chain environment.

Peer Moves

Other than Canadian Solar, solar companies that are poised to benefit from the expanding market size are as follows:

Enphase Energy (ENPH - Free Report) enjoys a valuable position in the global solar market by manufacturing fully integrated solar-plus-storage solutions and microinverters. As of Sep 30, 2022, more than 52 million microinverters were shipped, while approximately 2.7 million Enphase residential and commercial systems were deployed in more than 145 countries.

Enphase boasts a long-term earnings growth rate of 43.7%. ENPH shares have rallied 51.1% in the past year.

ReneSola (SOL - Free Report) continues to benefit from a steady flow of contracts from domestic and international customers. With the successful execution of its downstream strategy, SOL is currently expanding its business in international markets. It is committed to adding an incremental project pipeline to its core markets, including the United States, the United Kingdom, Spain, Poland, France, Germany and Hungary.

The Zacks Consensus Estimate for 2022 sales suggests a growth rate of 9.5% from the prior-year reported figure. ReneSola shares have increased 12.5% in the past three months.

SolarEdge (SEDG - Free Report) optimized inverter solutions address a broad range of solar markets. The company registered record revenues in 14 European countries and may continue to witness strong growth momentum.

SolarEdge’s long-term earnings growth rate is pegged at 34.5%. SEDG shares have rallied 26.7% in the past year.

Price Movement

In a year, shares of Canadian Solar have soared 42.5% compared with the industry’s growth of 42.6%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank

Canadian Solar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Published in