Shares of CSI Solar rose after the Chinese unit of Canadian photovoltaic module giant Canadian Solar said it will invest around CNY9.6 billion (USD1.3 billion) to build a highly efficient solar industrial park and plans to buy back up to CNY1 billion worth of shares.
CSI Solar [SHA: 688472] closed 3.7 percent higher at CNY14.45 (USD2.01) a share today. The Shanghai Composite Index rose 1.3 percent.
The solar park will be located in Huai'an, Jiangsu province and will have a production capacity of 14 gigawatts a year, CSI Solar announced late yesterday. It will make N-type solar products with an advantageous PV conversion efficiency, it added.
The project will include factories manufacturing silicon wafers, cells, and modules, three major links in the solar industry chain, with the plants to have the same production capacity, CSI Solar noted.
The project will be built in three phases, with the construction period for each to last at most seven months and an equipment installation period lasting at most six months, CSI Solar noted. Building the facilities for the first phase will likely start next month, it added.
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 and annual capacity.
The project will help CSI Solar quickly generate capacity for the large-scale production of cutting-edge N-type solar battery modules and further increase its market share, the company said regarding making such an investment during a capacity glut in the sector. It will also be beneficial to forming an operating effectiveness with the firm's three other facilities in Jiangsu's Suqian, Yancheng, and Yangzhou, it noted.
Despite the sector's concerns about overcapacity, suppliers in the solar industry cannot stop expanding their capacity for fear of being replaced by more cutting-edge technologies. PV firms are in a dire strait "where they will be outperformed if they don't expand their capacity," industry insiders previously told Yicai.
In a separate statement released yesterday, CSI Solar also announced plans to buy back between CNY500 million and CNY1 billion (USD69.5 million and USD138.9 million) of corporate shares for no more than CNY20.12 (USD2.80) each. The shares will be used 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 early last June with an issue price of CNY11.10, with its price surging to record CNY20.79 shortly after its listing before tumbling more than 30 percent due to the sector's overcapacity concerns. The stock of other PV firms has also similarly dropped in the period.
Canadian Solar, the world's fifth-largest supplier of PV modules, [NASDAQ: CSIQ] ended down 0.2 percent at USD21.13 yesterday.
（Picture: Veer）
