Canadian Solar’s 1Q13 Financial Result Evaluation: Rise in Gross Margin Lead to Decrease in Loss
Europe once was the major PV market in the world. However, due to the economic recession, PV market demand has continued to shrink in Europe. Surprisingly, it turned out that Asia’s PV market demand grew significantly this year. Impacted by the “Renewable Energy Special Measures Act”, Japan’s installation amount is likely to rise significantly. In 1Q13, sales to European markets represented 24.7%, a 42.6% decline compared with that in 1Q12. Several factors such as punitive tariff led to fewer orders in Europe and thus the proportion of Europe’s revenue in the overall revenue will continue to decrease. And sales to Asia and all other markets represented 57.4% of net revenue.. In addition, the amount of modules shipped to Japan this quarter accounted for 24.5% in the total amount of shipment, a 75.9% increase compared with that last year. Yet, the margin in Japan is high enough, which means that the Japanese exchange currency loss shouldn’t have that big of an effect. By entering the Japanese market in the early stage, Canadian Solar will continue to be benefited from the increasing demand in Japan in order to maintain higher gross margin.