$First Solar(FSLR)$ $Nasdaq100 Bear 3X ETF(SQQQ)$
First Solar (FSLR) is the world's largest thin-film photovoltaic solar module manufacturer and the largest module maker in the Western Hemisphere. The company specializes in producing solar modules using Cadmium Telluride (CdTe) technology. As of the end of 2022, FSLR had a module production capacity of 9.8GW and plans to reach over 20GW of total capacity by 2025. FSLR sells to utilities, independent power producers, commercial and industrial companies, and government agencies. The US is the largest market by sales in 2022 at 57.6%, followed by EMEA (22.7%) and Asia (19.7%). FSLR is headquartered in Arizona, with production facilities in the US, Malaysia, Vietnam, India, and Germany.
Investment Overview
Technology and regional alternative to China-based solar players. First Solar's (FSLR) main competitive edge is its Cadmium Telluride (CdTe) technology. CdTe cells perform better than silicon cells in hot, humid, low-light, and durability conditions. In addition, FSLR is positioned to benefit as western countries seek to reinforce their energy security by developing their domestic solar production capacity.
Well positioned to take advantage of US growth driven by IRA. The solid growth of solar installations in the US, driven by favorable policies such as the Inflation Reduction Act (IRA), is expected to support demand for FSLR's products. The company plans to add 11GW of production capacity on top of its existing 9.8GW by 2025. FSLR also has a contracted sales volume of 61.4GW to be recognized by 2029. Revenue is forecasted to grow c.31%/33% in FY23/24F. FY23/24F net profits are poised outpace revenue growth as FSLR works through non-recurrent charges which suppressed FY22 profitability.
In the short term, shifts in module ASP and gross margin will drive FSLR’s share price. Management expects FSLR can modestly increase its base ASP through adjustments in its backlog. Gross margin is also expected to improve via increasing scale over a largely fixed overhead cost structure. In the long run, sales volume will drive earnings growth. Long term results will also depend on FSLR’s research and development efforts to maintain CdTe as a viable solar cell technology. FSLR is also well positioned to grab market share should mainstream silicon-based cell technologies encounter significant bottlenecks.
Module price fluctuation, raw material supply bottleneck, disruption from competing technologies such as silicon and perovskite, legislation changes.
At the current price the shares have already factored in a premium for lower geopolitical risk which has impacted Chinese players. We reckon there will be a better entry point in the future at lower valuations.@TigerEvents @Daily_Discussion @TigerStars @MillionaireTiger
DYODD
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