Canadian Solar breaks ground on 60 MW cell fab in China

Although the stock market’s initial response to Canadian Solar’s Q1 results on Friday was a near 12% retreat by the Chinese manufacturer and developer’s share price, market-watchers including the Motley Fool website are pointing out the stock is now priced at half its January high and could be a canny opportunity.

Canadian Solar on Friday emphasized it had exceeded its predicted figures for what it described as ‘a seasonally slow quarter’ whilst compiling inventory and cash – courtesy of a US$255.7 million cash call in February – for a predicted return to growth from now on.

CEO Shawn Qu used Friday’s conference call to announce the figures to mention work officially started on Saturday on the company’s new solar cell manufacturing facility in Funning, in Jiangsu province, China.

According to the conference call transcript at the Seeking Alpha stock market investors website, the new factory will be a joint venture with GCL-Poly, a major wafer supplier to Canadian Solar.

Although headlines have focused on a potential 1.2 GW capacity for the factory, Dr Qu was careful to emphasize that the fab will have only a 60 MW production capacity initially, when it is up and running by the end of the year.

He added the option of expanding the facility, up to a maximum 1.2 GW, would only be taken up ‘if market demand exists and is healthy.’

Under the terms of the JV, outlined by Dr Qu, Canadian Solar will own 80% of the facility and GCL-Poly 20%.