Performance and challenges in overseas markets are intensifying.

Investor Network Jordan

In recent years, the photovoltaic industry has faced unprecedented challenges, with many listed companies experiencing significant stock price declines, and the overall industry valuation has fallen to historically low levels.

Against this backdrop, to rebuild investor confidence and stabilize market sentiment, many photovoltaic companies have chosen to cope with difficulties through methods such as Share Buyback. Canadian Solar (688472.SH) recently announced a considerable share buyback plan aimed at addressing market volatility and conveying the company's firm confidence to the outside world.

However, in the context of continuous price fluctuations in the Global photovoltaic industry chain, the market maintains a complex expectation for the industry outlook. Relevant departments and industry associations have repeatedly issued guidance opinions, aiming to reasonably regulate the expansion and release of production capacity, but challenges within the industry remain severe. Canadian Solar is no exception, with declining performance, increased debt pressure, and uncertainties arising from overseas anti-dumping and countervailing duty policies putting considerable Operating pressure on the company.

Large-scale buybacks encounter Shareholder discounted transfers.

On the evening of November 29, Canadian Solar announced plans to buy back shares valued between 0.5 billion to 1 billion yuan, with a maximum buyback price of 21.42 yuan/share. Following the announcement, the market reacted quickly; on December 2, Canadian Solar's stock price rose, opening at 14.68 yuan/share, peaking at 14.85 yuan during the session, and ultimately closing at 14.7 yuan/share, an increase of 3.09%.

According to the announcement, the number of shares Canadian Solar plans to buy back is expected to be between 23.3427 million and 46.6853 million shares, accounting for 0.63% to 1.27% of the total share capital. These repurchased shares will be canceled, thereby reducing the company's registered capital. In addition to its own funds, the buyback funds will also include special loans, and Canadian Solar plans to sign a "Share Buyback Shareholding Loan Contract" with the Bank Of China Suzhou New District Hi-Tech Industrial Development Zone branch to obtain a maximum of 0.4 billion yuan in dedicated repurchase loans.

Industry insiders generally believe that Canadian Solar's share buyback plan conveys the company's confidence in its own value and helps enhance the stability of its stock price. However, shortly after the buyback announcement was released, Canadian Solar faced the challenge of shareholders transferring shares at a discount.

On December 6, Canadian Solar announced that shareholder Beta Metric Limited and Wuxi Yuanhe Chongyuan Yongneng Venture Capital Partnership plan to transfer a total of 55.3233 million shares through an inquiry-based method, accounting for 1.5% of the company's total share capital. According to the inquiry transfer results report released shortly after, the transfer price was set at 11.88 yuan per share, a discount of 19% compared to the closing price of 14.65 yuan per share on the 6th, which quickly attracted market attention.

Shareholders transferring shares at a discount are usually regarded as a signal of Company Valuation, especially when the transfer price is significantly lower than the market price, often raising investors' concerns about the company's prospects. Although this transfer was not conducted through centralized bidding or block trading, the significantly lower price compared to the market price may put certain pressure on the stock price in the short term. The market may interpret it as Canadian Solar shareholders not recognizing the current stock price enough, thus affecting investor confidence.

Overseas "double reverse" adds uncertainty

This year, the overall environment in the photovoltaic module Industry has become exceptionally difficult, with most photovoltaic companies experiencing varying degrees of profit pressure. Against the backdrop of continuously declining prices for photovoltaic modules in the domestic market, many manufacturers have seen their profit margins significantly compressed, making it a common challenge within the Industry to maintain profitability.

In this severe context, Canadian Solar insists on implementing a "profit-first" sales strategy, striving to find breakthroughs in adversity.

From January to September 2024, the company's module shipment volume reached 22.9GW, a slight year-on-year increase. Among them, the third-quarter shipment volume was 8.4GW, a quarter-on-quarter increase of 2.4%. In the energy storage Business, Canadian Solar's large-scale energy storage product shipments reached 4.4GWh, with third-quarter shipments at 1.8GWh, both shipment volume and unit Net income hitting a historical quarterly high.

However, despite the increase in shipment volume, Canadian Solar's overall performance still faces severe pressure. In the first three quarters of this year, the company's revenue and Net income decreased to 34.178 billion yuan and 1.955 billion yuan, respectively, with year-on-year declines of 12.63% and 31.17%. This is mainly attributed to external factors such as supply-demand imbalance and price drops in the photovoltaic Industry. In this situation, Canadian Solar adjusted its market strategy, increasing shipments to high-priced markets in North America and beyond, with North American market shipment accounting for over 30% in the third quarter.

In the process of transforming from full-cost competition to cash flow competition in the photovoltaic Industry, maintaining cash flow has become an important task for many enterprises. Although the net operating cash flow of Canadian Solar in the first three quarters remained positive, it decreased by 55.81% year-on-year, to 2.476 billion yuan, and the financial pressure cannot be ignored. At the same time, the company is also facing a certain amount of debt pressure, with cash and MMF amounting to 15.09 billion yuan, while current liabilities total as high as 34.1 billion yuan, indicating an urgent need for improvement in financial conditions.

Another serious external challenge comes from overseas "double-reverse" tariff policies. According to reports, the U.S. Department of Commerce has made a preliminary affirmative ruling on the anti-dumping tax investigation of crystalline photovoltaic cells from four Southeast Asian countries, with anti-dumping tax rates ranging from 0-271.28%, with specific rates varying by company. This ruling will have a direct and far-reaching impact on Canadian Solar's production bases and export business in Southeast Asia. In particular, the company has two important ongoing projects in Thailand—the 5GW slicing project and the third phase expansion project for battery modules in Thailand, with budget figures reaching 0.272 billion yuan and 3.85 billion yuan respectively, and has already invested a large amount of funds, with some partially capitalized.

Under the influence of the "double-reverse" tariff policy, Canadian Solar's business in Southeast Asia may face greater uncertainty. The imposition of anti-dumping taxes will directly increase export costs and could weaken the company's competitiveness in these markets. For the Thai projects that have already invested huge sums and for which some assets have already been capitalized, this policy undoubtedly brings greater risk and uncertainty. (Produced by Thinking Finance)■