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Canadian Solar – on the way to nr1 in the solar industry

In case you are wondering which company you should invest next in, the answer is here, CanadianSolar. The company is bound to make you lots of profits, as long as you can be enough patient. If you are new to the stock market, remember to take your time and never make rash decisions, for quick cash try a casino online instead. Among the photovoltaic companies, Canadian Solar mainly competes on a price-based basis rather than technical. Profit margins are quite low due to this intense competition. Canada’s Canadian Solar (NASDAQ: CSIQ) was established in 2001 in Guelph, Ontario, by Shawn Qu and has subsidiaries in over 24 countries around the world. As a manufacturer of solar PV modules, they support the installation of solar energy and are involved in a number of utility-scale power projects. Canadian Solar increased its project pipeline by 2.4 GW to 20.4 GW through the acquisition of Recurrent Energy. (Nasdaq: CSIQ) went public in November 2006 at a share price of $15.

Canadian Solar (ISIN: CA1366351098 – Symbol: CSIQ – Currency: CAD)

Canadian Solar: On the best way to becoming the largest module manufacturer in the world

Due to the sharp drop in module prices, solar power is now considered the most competitive sustainable form of energy and, in some countries with a particularly large number of hours of sunshine, even the cheapest available power source. In the warm regions, it has already been possible to produce solar power at an (almost) unbeatable price of 0.01 USD / kWh. No wonder solar power is on the rise. According to the International Energy Agency IEA, solar power only covers around 3% of the world’s electricity demand, but around half of the newly installed power generation worldwide is currently solar energy. Solar companies benefit from this development.

The Canadian solar company Canadian Solar is the second-largest solar module manufacturer in the world. Since it was founded in 2001, Canadian Solar has said it has already delivered solar modules with a total output of more than 46 GW. The company currently has a module production capacity of approx. 16 GW. In addition to modules, inverters and power storage solutions, as well as services, are offered. Canadian Solar also develops, builds operates, and sells entire solar parks. Own parks with a current total output of 1 GW are currently being operated; there are further large projects in the pipeline with a total volume of 15 GW. This project business, in which finished systems and parks are usually handed over to energy companies, is to be expanded significantly in the future. While the completion of major projects with a total volume of 1.1 to 1.3 GW is planned for this year, it should be 3.6 to 4.1 GW by 2024.

On the way to number one in the solar industry?

The company expects a big leap in the coming year. From an expected 11 to 12 GW in 2020, deliveries are expected to increase to 18 to 20 GW in 2021. This could – in terms of performance – even if only marginally overtake the current market leader JinkoSolar and become number one in the industry. Since China and Southeast Asia have some of the world’s largest manufacturing facilities for solar cells, this project could well succeed. The company expects the world market share to increase from currently 10% to 14%. The location and size advantages and economies of scale are hoped for an enormous boost in terms of profitability. And here Canadian Solar is already well in the running. Since 2016, the gross margin has increased from 15% to now 24%, the competition here is still below 20% on average. For the past fiscal year 2020, analysts expect earnings per Canadian Solar share of USD 1.67, with a profit of USD 2.01 in the current year 2021. Sales are expected to increase from USD 3.43 billion in 2020 to USD 4.93 billion next year.

Conclusion: only suitable for speculative investors

Canadian Solar is one of the photovoltaic companies that mainly compete on the cost or price level and less on the technology level. Since there is a lot of competitive pressure here, the profit margins are still quite low. As a result, Canadian Solar’s market capitalization is currently around USD 3.2 billion, well below the expected annual sales of USD 4.9 billion. If the competitive situation eases because the demand for solar modules is picking up, this – as was the case recently – has a very positive effect on profit margins. However, Canadian Solar shares are not suitable for conservative investors and are more suitable for speculative investors. Long-term-oriented investors can enter the range of 45 USD to 50 USD in the event of a setback and rely on the fact that the module prices will develop significantly more stable in the future due to the increasing demand. Because then the price increase in 2020 could only be the prelude to a longer-term upward movement.

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