Decline in unit selling price + increase in costs such as tariffs, Canadian Solar's revenue and net profit both declined in Q1

On the evening of April 28, Canadian Solar released its 2024 annual report and Q1 2025 report.

In Q1 2025, Canadian Solar achieved operating revenue of 8.586 billion yuan, down 10.54% YoY. Net profit attributable to shareholders of the publicly listed firm was 47.2582 million yuan, down 91.83% YoY. This was primarily due to a decline in the company's average selling price during the reporting period, leading to a decrease in operating revenue compared to the same period last year. Additionally, increased costs for tariffs and freight expenses contributed to a decline in gross profit margin. However, a decrease in the comprehensive manufacturing cost of products partially offset these impacts.

In 2024, Canadian Solar achieved operating revenue of 46.165 billion yuan, down 10.03% YoY. Net profit attributable to shareholders of the parent company was 2.247 billion yuan, down 22.60% YoY. The significant decline in the selling price of the company's PV modules was the main drag. However, revenue from the energy storage system (ESS) business achieved rapid growth, becoming a new profit growth point for the company.

In Q4 2024, Canadian Solar achieved operating revenue of 11.987 billion yuan, net profit attributable to shareholders of the parent company of 292 million yuan, and net profit excluding non-recurring gains and losses of 342 million yuan.

According to the annual report, Canadian Solar's net cash flow from operating activities was 2.43 billion yuan, down 70.49% from the same period last year. This was mainly due to a decrease in the selling price of PV modules, leading to a reduction in cash inflows from sales of the main business.

Canadian Solar's net cash flow from investing activities was -9.989 billion yuan, and net cash flow from financing activities was 3.538 billion yuan, down 50.82% YoY. This was primarily due to an increase in cash payments for dividend distributions and share repurchases during the reporting period.

In 2024, PV module products and ESS products were the two businesses with the highest revenue contributions for Canadian Solar. Among them, PV module products achieved revenue of 31.483 billion yuan, down 25.62% YoY, with a gross profit margin of 12.75%, a decrease of 2.95 percentage points from the previous year, mainly due to the decline in selling prices of PV modules and systems.

During the same period, ESS products achieved revenue of 9.738 billion yuan, up 420.76% YoY, with a gross profit margin of 30.84%, an increase of 13.74 percentage points from the previous year. The rapid growth of the ESS business partially offset the impact of the decline in the PV module business.

From the perspective of product structure changes, Canadian Solar is gradually shifting towards the ESS sector, with a significant increase in the proportion of the ESS business.

In terms of shipments, in 2024, Canadian Solar's total PV module shipments in the global market reached 31.1 GW. Shipments of its second main business, ESS, reached 6.5 GWh, up over 500% YoY.It is expected that by 2025, the shipment scale of its large-scale ESS business will further increase to 11-13 GWh, maintaining a rapid growth trend.

By region, in 2024, Canadian Solar's overseas market revenue was 35.811 billion yuan, accounting for 77.59% of total revenue, up 1.54% YoY, with a gross profit margin of 19.55%, an increase of 2.14 percentage points from the previous year. Its domestic market revenue was 9.604 billion yuan, down 36.60% YoY, with a gross profit margin of -1.80%, a decrease of 9.02 percentage points from the previous year.The company's overseas market revenue has grown steadily with an improved gross profit margin, while domestic market revenue has declined significantly, having a substantial impact on its overall revenue structure.

During the reporting period, Canadian Solar's R&D investment was 857 million yuan, up 21.67% YoY, accounting for 1.86% of operating revenue, an increase of 0.49 percentage points from the previous year. This was mainly due to increased R&D investment in technologies such as N-type cells.

Canadian Solar has achieved breakthroughs in TOPCon cell technology, HJT cell technology, etc., holding a cumulative total of 456 invention patents, 3,017 utility model patents, and 270 design patents, with 84 new invention patents added during the reporting period. Relevant technologies have been applied to high-efficiency PV modules and ESS products.

Currently, the global PV industry is in a period of profound adjustment, with sustained but slowing growth in market demand and prominent overcapacity issues across various links of the industry chain. Despite this, as an important component of the new power system, the value of ESS has expanded from traditional valley filling to areas such as power grid frequency regulation and capacity reserve, demonstrating broad development prospects.

According to its annual report, as of the end of the reporting period, the top ten circulating shareholders of Canadian Solar held a combined 39.37% stake. New shareholders include Industrial and Commercial Bank of China Limited - E Fund Shanghai-Shenzhen-Hong Kong CSI 300 ETF (holding 62.5747 million shares) and Industrial and Commercial Bank of China Limited - Huatai-PineBridge CSI 300 ETF (holding 24.201 million shares). Shareholders that exited include Yangzhou Honglian Ruisi Investment Partnership (Limited Partnership) (originally holding 73.1498 million shares) and CICC Capital Operation Co., Ltd. - Xiamen CICC Yingrun Equity Investment Fund Partnership (Limited Partnership) (originally holding 54.5693 million shares).

Regarding fundraising and investment projects, Canadian Solar's "10 GW Annual Rod Pulling Project," "Funing 10 GW Wafer Project," "4 GW Annual High-Efficiency Solar PV Cell Project," and "10 GW Annual High-Efficiency PV Module Project" have all been completed and closed as planned, with a total cumulative investment of raised funds of 6.161 billion yuan, accounting for 92.95% of the planned total investment. Additionally, its "Jiaxing Canadian Solar PV Technology Co., Ltd. Research Institute Construction Project" has also been completed, with a cumulative investment of 150 million yuan, accounting for 100% of the planned total investment.

In terms of important matters, Trinasolar has initiated multiple patent lawsuits against Canadian Solar, involving litigation in US federal courts and the 337 investigation process. Currently, the cases have not yet entered the trial stage. Meanwhile, Canadian CSIQ has filed a lawsuit against Chubb Insurance Company regarding warranty insurance claims. The first-stage ruling supported Canadian CSIQ's claims, and the second stage is expected to commence in February 2026. These lawsuits may have a certain impact on the company's short-term operations, but the company has stated that it will actively respond to the lawsuits and take legal measures to safeguard its rights and interests.