Canandian Solar (CSIQ) 13.50 Hold – solar will see some benefits from lower interest rates as a sector, but it may be better to look at stonger US based companies, though.
Revenues have grown every year at single digits and it has ben profitable 2.96 to 7.61, profitable every year. The stock is down over 40% in the past 12 months and negative in the last 5-10 years.
Positives
Interest burden will come down with lower rates, after Powell signalled a lower interest rate regime from the next meeting.
They have a decent enough presence in the US markets and should there be more emphasis on renewable energy this will benefit.
Negatives
Solar panel producers face a glut from Chinese suppliers and this year was no different, plus Canadian was selling to the Chinese market, which was slow. It is a Chinese company even though the name is Canadian – I suspect valuations will tend to be lower.
80% of CSIQ’s solar manufacturing capacities are based in China and ~15% in Southeast Asia, with CSIQ already facing additional import duties beginning June 2024, attributed to the ongoing EU and US trade ban surrounding Chinese-made polysilicon products.
Lot of debt like most solar panel producers.
Customers struggle with financing of solar panels at their homes because of high interest rates, particularly in the U.S. Solar loans are now around 9% after being around 4% for many years.