Canadian Solar Inc.

CSIQ Details

Canadian Solar Inc. (NASDAQ: CSIQ) is a manufacturer of solar photovoltaic modules, provider of solar energy and battery storage solutions, and developer of utility-scale solar power and battery storage projects. It has delivered over 55 GW solar photovoltaic modules in over 150 countries.

Result Performance – For the first quarter ended 31 March 2021 – (Q1FY21)

• Shipped Solar module of 3.1 GW: Made shipments of 3.1 GW Solar module to over 70 countries in Q1FY21, (Guidance: 3.0-3.2 GW). The top five markets ranked by shipments were the U.S., China, Brazil, Australia, and Japan
• Revenue increased 32%: Revenue grew 32% YOY to $1.1 billion (Guidance: $1.0-$1.1 billion) driven by increased sales in Japan and the United States, a higher module average selling price (ASP), which was partially nullified by lower module shipments recognized as revenues
• Gross margin at 17.9%: Gross margin was 17.9%, driven by high margin project sales and higher module ASP, which was partially nullified by higher manufacturing costs
• Net income at $23 million: Net income stood at $23 million, or $0.36 per diluted share, versus net income of $7 million, or $0.11 per diluted share in Q4FY20

Key Data (Source: Company Reports)

Recent Update:

• On 14 July 2021, the company advised that it has signed a 10-year power purchase agreement with Centrica Energy Trading for 2 solar power projects totalling 12 MWp in Italy.
• On 12 July 2021, the company has been awarded the first utility-scale battery storage project in Colombia of 45 MW/45 MWh.
• On 29 June 2021, the company advised that it has been awarded 86 MWp in Japan's 8^th solar energy auction, reporting for the largest share of the total capacity auctioned.

Risks:

The company could be impacted by the volatile solar power market and industry dynamics, especially if the demand for solar power products and services declines significantly. The mix of revenues from CSI Solar and Global Energy segments could be subject to significant fluctuation because of the number of factors. The continued growth strategy relies upon the continued availability of third-party financing arrangements.

Outlook:

Q2FY21 Guidance: Total module shipments to be in the ambit of 3.5-3.7 GW, including ~80 MW of module shipments to the CSIQ’s projects. Total revenues are expected to be in the ambit of $1.4-$1.5 billion and gross margin between 9.5%- 10.5%.

FY21 Guidance: Total module shipment is expected in the range of 18-20 GW and sales guidance of 1.8-2.3 GW. The company gave total battery storage shipment guidance of 810-860 MWh and total revenue expected to be in the ambit of $5.6-$6.0 billion.

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation (Illustrative)

Stock Recommendation:

The stock has made a 52-week low and high of $21.65 and $67.39, respectively and is currently trading below the average of 52-week high-low range.

Considering the aforesaid facts, we have valued the stock using an EV/EBITDA multiple-based illustrative relative valuation and have arrived at a target price which reflects a rise of low double-digit (in % terms). We believe the company can trade at a slight premium to its EV/EBITDA Multiple (NTM) (Peer Mean) considering strong Q1FY21 result and stronger guidance for Q2FY21 and FY21.

Considering the aforesaid facts, we give a “Buy” recommendation on the stock at the current market price of $38.67 per share, down 2.37% on 15^th July 2021.

Technical Chart:

Source: REFINITIV

Amicus Therapeutics, Inc.

FOLD Details

Amicus Therapeutics, Inc. (NASDAQ: FOLD) is a patient-dedicated biotechnology company primarily focused on discovering, developing, and delivering novel medicines for rare diseases. The product opportunities include oral monotherapy for Fabry disease, a differentiated biologic for Pompe disease, and a rare disease gene therapy portfolio.

Result Performance – For the first quarter ended 31 March 2021 – (Q1FY21)

• Galafold revenue increased 9.8%: The revenue for Galafold (migalastat) stood at $66.4 million, up 9.8% YOY. Meanwhile, Q1FY21’s total revenue was $63.0 million, indicating operational revenue growth measured at constant currency exchange rates of 4.1% that was benefited by a positive currency impact of $3.4 million.
• On-track in rolling BLA: On-track to complete the rolling BLA submission of AT-GAA in Pompe disease in Q2FY21.
• Net Loss Decreased: Net loss stood at $65.7 million versus a net loss of $88.9 million in Q1FY20.
• Cash and cash equivalents: The cash, cash equivalents, and marketable securities stood at $417.4 million as of 31 March 2021 versus $483.3 million as of 31 December 2020.

Key Data (Source: Company Reports)

Recent Update:

• On 14 June 2021, the company advised the election and appointment of Eiry W. Roberts, M.D. to its Board of Directors.
• On 8 June 2021, the company advised that the UK’s Medicines and Healthcare Products Regulatory Agency (MHRA) has granted a positive scientific opinion through the Early Access to Medicines Scheme (EAMS) to AT-GAA

Risks:

The company is dependent on sales of Galafold in Europe, the US, and Japan for its growth perspective. Further, any delays in obtaining required regulatory approvals will impact the commercialization of product or product candidates, thereby, impacting revenue generation.

Outlook:

FY21 Revenue Guidance: For FY21, the company forecasts total Galafold revenue of $300-$315 million driven by continued operational momentum and commercial execution across all major markets like the US, EU, UK, and Japan.

FY21 Operating Expense Guidance: For FY21, non-GAAP operating expense is expected in the ambit of $410-$420 million, led by continued investment in the global Galafold launch, AT-GAA clinical studies, pre-launch activities, and advancing gene therapy pipeline.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

Stock Recommendation:

The stock has made a 52-week low and high of $8.68 and $25.39, respectively and is currently trading below the average of 52-week high-low range.

Considering the aforesaid facts, we have valued the stock using an EV/Sales multiple-based illustrative relative valuation and have arrived at a target price which reflects a rise of low double-digit (in % terms). We believe the company can trade at a slight premium to its EV/Sales Multiple (NTM) (Peer Mean) considering revenue growth in FY21, plan to expand EU label to cover adolescent population and geographic expansion by the company.

Considering the aforesaid facts, we give a “Speculative Buy” recommendation on the stock at the current market price of $9.13 per share, up 2.7% on 15^th July 2021.

Technical Chart:

Source: REFINITIV

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined:-

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine do not hold interests in any of the securities or other financial products covered on the Kalkine website.