Canadian Solar Inc
.
CSIQ
has recently completed the sale of its two operational projects totaling 61 megawatt-peak (MWp) to the Canadian Solar Infrastructure Fund (CSIF). The projects sold by Canadian Solar included the 53 MWp Oita Hiji-machi and 8 MWp Miyagi Ogawara projects. The transaction amount totaled approximately $283 million.
Canadian Solar’s Growing Presence in Japan
Canadian Solar’s presence in Japan has accelerated significantly over the past few years. This is evident as the company has recently surpassed $1 billion of asset sales in the Japanese solar market. Solar market growth in Japan has also been achievable by significant growth of the Canadian Solar Infrastructure Fund, where Canadian Solar has a 15% ownership stake. Notably, the CSIF owns 25 solar power plants totaling 184 MWp across Japan.
To further expand its footprint, Canadian Solar, in March, has launched the Japan Green Infrastructure Fund to accelerate the development of new solar projects in Japan. Ever since the company launched its Japanese solar development business in 2011, it has successfully built and connected 40 solar plants or 290 MWp across 20 prefectures, making Canadian Solar one of the largest utility-scale solar developers in Japan. The latest project sale will further strengthen the company’s presence in the Japanese solar market.
Project Monetization & its Benefits
With a rapidly expanding solar market globally, monetization of projects is significantly favoring solar players and boosting their operational performance. Canadian Solar currently caters to a geographically-diverse customer base spread across key markets in the United States, China, Japan, the U.K. and Canada as well as emerging markets in Italy, India, Mexico and Germany, among others. Given its strong global presence, the strategy of project monetization tends to boost this solar player’s profits.
Notably, in December 2020, Canadian Solar completed the sale of a Japan-based solar project, Gunma Aramaki, for $64 million with a generation capacity of 19 MWp. In September 2020, the company completed the sale of the 23 megawatts-alternative current (MWac) Suffield solar project to BluEarth Renewables. Prior to this sale, Canadian Solar completed the sale of Yamaguchi Shin Mine in February 2020, a 56.3-MWp operational solar power plant in the Yamaguchi Prefecture in Japan.
It is evident that as the company continues to expand its customer base worldwide, sale proceeds from these divestments, including the latest one, will further fuel its top line.
Another solar company following a similar strategy is
ReneSola
SOL
, which sold a 16-MW portfolio of solar parks in Poland to Modus Asset Management, a renewable energy investment company that invests in the Polish solar market, in December 2020.
Peer Moves
The global solar market, which suffered a setback following the COVID-19 outbreak in March 2020, has been steadily recovering and heading to a positive growth trajectory over the past few months. This has been encouraging major solar industry players to engage in strategic transactions to expand their footprint in the global solar market. Evidently, in October 2020,
Sunrun
RUN
acquired Vivint Solar, creating a company valuation of $22 billion.
Price Performance
In a year’s time, shares of Canadian Solar have surged 145.6% compared with the
industry
’s 145.4% growth.
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Zacks Rank & A Key Pick
Canadian Solar currently has a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
A better-ranked stock in the same industry is
Enphase Energy
ENPH
, carrying a Zacks Rank #2 (Buy). It delivered an earnings surprise of 23.17%, on average, in the last four quarters. The Zacks Consensus Estimate for 2021 earnings has risen 7.7% to $1.95 per share in the past 60 days.
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