China’s CSI Solar Jumps on Share Buyback Plan, Unveils USD1.3 Billion Industrial Park Investment
Tang Shihua
DATE:  Feb 27 2024
/ SOURCE:  Yicai
China’s CSI Solar Jumps on Share Buyback Plan, Unveils USD1.3 Billion Industrial Park Investment China’s CSI Solar Jumps on Share Buyback Plan, Unveils USD1.3 Billion Industrial Park Investment

(Yicai) Feb. 27 -- CSI Solar’s shares rose after the Chinese unit of photovoltaic panel giant Canadian Solar said it plans to repurchase up to CNY1 billion of its own shares. The firm also said it will invest about CNY9.6 billion (USD1.3 billion) to build a highly efficient PV industrial park.

CSI Solar [SHA: 688472] closed 3.7 percent higher at CNY14.45 (USD2.01) a share today, while the Shanghai Composite Index rose 1.3 percent.

In a statement released yesterday, CSI Solar announced plans to buy back between CNY500 million and CNY1 billion (USD69.5 million and USD138.9 million) of its stock for up to CNY20.12 (USD2.80) each and use them for employee stock ownership plans or equity incentives.

Buybacks are generally aimed at buoying a company's stock price by removing some of its shares from the market. 

CSI Solar went public on Shanghai's Nasdaq-like Star Market last June at CNY11.10 a share. That surged to a record CNY20.79 shortly after listing before tumbling more than 30 percent due to concerns about overcapacity in the solar industry. The stock of other PV firms has also similarly dropped in the period. 

Canadian Solar [NASDAQ: CSIQ], the world's fifth-largest supplier of PV panels, ended down 0.2 percent at USD21.13 yesterday.

CSI Solar’s new PV park will be located in Huai'an, Jiangsu province and will have a production capacity of 14 gigawatts a year, the company said in a separate announcement yesterday. It will make N-type solar products with an advantageous PV conversion efficiency, it added.

The project will include factories that manufacture silicon wafers, cells, and modules, three major links in the solar industry chain, and they will have the same production capacity as one another, CSI Solar noted.

The project will be built in three phases, with the construction period for each taking up to seven months and equipment installation to last six months at most, CSI Solar noted. Building the facilities for the first phase will likely start next month.

Excluding the construction period, the project's investment payback period will be just over three years, CSI Solar noted, without disclosing further details such as each phase's investment amount and annual capacity.

The project will help CSI Solar quickly create capacity for the large-scale production of cutting-edge N-type solar battery modules and further increase its market share, the company said about the investment amid a sector-wide capacity glut. It will also be advantageous for achieving economies of scale in operations with key neighboring bases in Suqian, Yancheng, and Yangzhou, it added.

Despite concerns about overcapacity in the industry, solar companies have been unable to stop expanding their production capacity due to the risk of being replaced by more cutting-edge technologies. If firms do not expand production, then they are just waiting to be surpassed, according to industry insiders.

Editor: Martin Kadiev

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Keywords:   New Industrial Park,Solar Wafer,Solar Cell,Solar Module,CSI Solar,Canadian Solar