CSIQ Shipped Over 6 GW Modules In Q1/2023

• Canadian Solar reported its Q1/2023 shipments of 6.1 GW to have grown 66% YoY but declined by over 4% QoQ
• Increased module shipments led to 36% YoY increase in net revenues, but lower ASPs and lower revenues pulled down the same 14% QoQ
• Its current global solar development pipeline stands at 25 GW, and that of battery energy storage projects at 47 GWh

Canadian Solar has reported 36% annual increase in net revenues for Q1/2023 with $1.7 billion thanks to increase in module shipments, but lower ASPs and lower revenues from utility scale battery storage and project sales pulled it down by 14% QoQ, nonetheless the company has reiterated annual guidance.

Module shipments of 6.1 GW reflect an annual improvement of 66% but quarterly decline of over 4%. China, Brazil, the US, Spain and Germany were its largest markets in terms of shipments.

Consequently, gross profit went up 76% YoY and 9% down QoQ to $318 million. Gross margin improved to 18.7% in the reporting quarter, up from 17.7% in the previous quarter due to lower manufacturing costs, partially offset by lower module ASPs (see Canadian Solar Shipped Over 21 GW Modules In 2022).

As polysilicon prices come down with more capacity available in the market, management sees its input costs also coming down. As it expands manufacturing capacity, the company expects greater control over its supply chain, as it shared with analysts during the call to discuss the results.

"We delivered a record operating profit in the first quarter, despite normal seasonal softness with lower input and manufacturing processing costs, and lower logistics costs," said President of Canadian Solar's subsidiary CSI Solar, Yan Zhuang. "Looking ahead, as we continue to grow our volumes and increase the level of vertical integration, we expect profitability to remain healthy as our cost structure continues to improve and we reap the benefits of greater scale."

Having bundled all its global energy business under Recurrent Energy, Canadian Solar now counts a global development pipeline of 25 GW of solar and 47 GWh of battery energy storage projects. Interconnections have been secured for 14 GW and 12 GWh respectively, according to the management.

Most of the solar pipeline exists in the EMEA market, followed by North America and Latin America. As for storage, it counts North America, MEEA and China as its largest markets.

Guidance

For Q2/2023, the company has guided for revenues within the range of $2.4 billion to $2.6 billion and gross margin as 19% to 21%. Total module shipments are likely to be within 8.1 GW to 8.4 GW range.

For full year 2023, the management has reiterated annual forecast of module shipments within 30 GW to 35 GW range, while battery storage shipments will be within 1.8 GWh to 2.0 GWh. Total revenue guidance has been improved for the lower end from previously $8.5 billion to $9.5 billion to now $9.0 billion to $9.5 billion.

Canadian Solar is moving fast towards n-type technology as all its new additions are going to be based on the same. As announced previously, it aims for a total annual production capacity of 50.4 GW, 50 GW, 60 GW and 75 GW for ingots, wafer, cell and modules, respectively by the end of March 2024 (see Gigantic Expansion Plans From Canadian Solar).

Answering an analyst's question about its US manufacturing plans, Canadian Solar's Chairman and CEO Dr Shawn Qu said the company will go for backward integration starting with modules and follow up with cells or wafers. It won't be funding the US production plans with the planned China initial public offering (IPO) that's due to be finished in June 2023.