Canadian Solar (CSIQ) 21 Mar 232022 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to Canadian Solar's Fourth Quarter 2022 Earnings Conference Call. My name is Rob, and I'll be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the call over to Isabel Zhang, Investor Relations Director at Canadian Solar. ahead. go Please

on and XXXX operator, provided to Solar's Presentations are Canadian to within Relations Thank Events the call. welcome, Please quarter and available which call, conference today's have Solar's note fourth Investor accompany website you, section. conference everyone, Canadian that slides we

President VP Qu, Corporate Joining majority-owned Dr. Solar; after subsidiary, Shawn CEO; Canadian and and Zhuang, Guerrero, Chairman of Senior Ismael CFO; today and subsidiary, formal management's participate us All Dr. President wholly-owned Yan VP CSI executives Huifeng and remarks. committee session are in Global of Solar's Solar's Chang, Canadian Q&A the Energy. will

of call, Yan results. and with after Global the for will Shawn Huifeng, the some over Energy the businesses, this followed outlook, will and key will financial questions. respectively have quarter. will prepared the by go through messages the remarks business highlights time we for CSI On Ismael who Shawn Solar go the conclude will which review

Before management's contain company's of Commission. may from risks today. on Canadian future as no forward-looking questions and claims uncertainties. protection the today by company found to of remarks projections harbor their Form the results safe the contained Any are more answers law. required that detailed filed Exchange assumes the company's as Litigation as report differ future the Solar will listeners be with we expectations. may can The management's applicable Act Securities discussion statements Securities of XX-F I of management's statements to to current projections risks that Reform otherwise and in well that represent the update performance obligation uncertainties annual subject and unless in these of A the estimates begin, for is in the forward-looking prepared remind Private XXXX. Actual

generally GAAP. accounting Management's prepared SEC principles Regulation presented regarding of within remarks requirements G accepted be will or the

during call on both presented GAAP non-GAAP the information and will provided a Some financial basis. a be

with non-GAAP the and additional not certain measures disclosing investors of for data Non-GAAP permit establish to in should underlying by to be and provide to substitute uses better performance investors viewed performance information By trends. as accordance goals. Management information operational non-GAAP further prepared information, analysis management operating GAAP. assess to a with intends company's

Solar's And now CEO, Canadian Dr. I would go call Qu. to Chairman Shawn, Shawn to the over like turn ahead. please and

for call you, Thank thanks joining hi, our today. Welcome, Isabel, and on everyone. and us

of XXXX their and $X.X income turn we a by revenue Page XX% record revenue year Solar record Please to for grew to X. $XXX like Diluted these and for profit. in a XXXX We by and to in thank earnings shareholders grew achieving to was $X.XX. for record Global I attributable net terms focus Solar Energy to million. XXX% teams both work Canadian was and outstanding billion, would results. per CSI our a share

of call Before to Ismael seeing. turning you like to the over we a and would are Huifeng, view higher level I Yan, what give

X. Page to turn Please

revenue limited financials If solar to offset massive in was XXXX, in as increase you and decline between costs huge volume our modules. notice the will earnings and look XXXX key in at growth ASP you the by

technology this to critical standpoint. of from a capital government attractive both put reduce in sustainability achieve goal output. economically energy energy This helped efforts good place parity pool subsidies. invested cost focus we This a a great significant make product clean is much while investments greater space. and attracted unlocked us has demand amount in and Today, and of into improving and of solar period, investment global strict without financial the efficiency helped and that During manufacturing control R&D our our and costs discipline

curve, cost closer the integrated of growth the an are translating into and both to a developer, growth. and we As revenue manufacturer reached earnings the we closer bottom volume the

curve; years, look as you reasons. that ramp Recently, at as to the given curve meaningfully the of increased material declines. innovation will we quite polysilicon our are costs at predominant drivers some cleaner leverage energy COVID-related such energy. technology and at of stabilizes is will greater bottom to that getting see the value and infrastructure world But and not the gains With point help started due achieve as yet, are two and capacities of new raw we that, the costs pricing of and profitability, material not to further, key secure the decline, cost continues power very have the that us structure expect close of differentiation past efficiency universal we to become which If up. the The to to the further bottom pipeline in cost point, in technological cost operating the invest the cost cost. raw access

at closely. is are very point critical watching company and a our think I turning worth our industry and

the Please turn to next slide.

the we the the turning you for the This Yan, want Regulatory Before with on received in approval to morning, registration Commission. Solar's over CSI call Securities IPO China. to I update carve-out China

completed. in process Solar's fully prospectus of Our auditing our the update XXXX once the financial CSI will XXXX we auditing are financials, auditors and is

update, QX complete we today's in this to the we of IPO are think Given year. track on

our ahead. me to go let please more provide Yan business. will details Solar Yan, turn now CSI With who that,

Thanks, turn Slide Please Shawn. X. to

growth As X.X-gigawatt macro strength record storage year-over-year record Xx. module gigawatts. grew our Despite margin Gross challenging XX% business the of Shawn and for and operating battery opportunities XX%. year-over-year, up XX was We noted, long-term by And multiyear solar Full ahead. XX% this year underscores increased year profit to backdrop, over the shipment year doubled to a XXXX revenue shipments hour. was grew us.

moving If you turn possible. we market continue our take slide, to extent favor, the volatility. actions the you can in see to the generally next Trends are of but wherever

some an of of polysilicon materials raw Lunar expected New polysilicon example, China's timing quickly. driven Year. by and prices to December of acquire a reopening policies collapsed us prices For we This as in January, rebound quite to chance gives quantity and sudden COVID opportunistic

gradually believe prices polysilicon will markets. are fundamentally, believe large the see still strong, also, And come to over very our market to we However, elastic. today very customer several We we given the down continue as views drastically is across pipelines past shared demand the we that price and very opposed unchanged. is quarters

other on the can decline to improvement costs profitability levels, as driver the The big of shipping you was of more the see normal chart.

volumes, able our more our as grow operating while will we costs go costs up as shipping includes leverage which fast bit see with not on be operating shipping to So a will will top line. expenses,

X. Slide to turn Please

very high-priced through our focus market the on trends words, and advantage while In remains positioning manufacturing strengthening capabilities. of other strong and building integration costs of we competitive can factors technology that markets; our on vertical monitoring So closely, premium in customer in channel we brand our and, products; control. relationships; increasing are our control

the which on and regional show our premium charts The in are left channel over-indexed distribution, markets.

On the distribution. side is right-hand our capacity

grow this and our with flexible to to increase over we keep vertical and continue demand to value of across integration the up in are strong strategy. gain the chain, level capacity We control our costs more

This announced, we reflects but supply across year, ingot slowed the As plans. our we chain. this expansion and of cell accelerated previously balance the capacity value demand relative our expansion views on our

Please turn Slide X. to

on Moving our to battery storage business.

projects revenue battery team, in credible of zero wanted achievements shipments storage one scale the every which of XXXX. with right the delays. some delivered we over scale What’s prices. the incredible the project $XXX been the at and of And storage of and -- despite of few CSI delivered of First, more? team Our energy largest has X.X-gigawatt battery to hour have from pandemic team I beginning in million very players delivered The utility the year. over in almost our material storage raw utility the profitable, in between steep global middle key was the and highlight to pandemic formed the past increases that executed no the XXXX grew market was

In key prices come areas. strategic started XXx over is although more have growth storage one period, Battery up of by the than fact, prices carbonate long-term our recently lithium to down. went

past the have in launched and Over the successfully utility most been competitive R&D several quarters, SolBank. one of scale products, storage the we investing have battery

from SolBank. year-over-year battery storage for a transition XXXX considering for label storage be going solar. our shipments, flat transition lead battery white to delivering we to a deliveries year especially why own is times is As fulfillment expect manufactured compared our product to the order This in previously longer we XXXX.

we long-term very visibilities over However, strong our growth. have

and XX-gigawatt revenue of As storage business. had pipeline of our turnkey hour billion over a contracted $X SolBank total XX, utility-scale in January in

continue long over expect grow expand this We space. further to commercial in to our we as term this capabilities the

Please turn to next the slide.

XXX are started our total. the working in Tokyo been Shawn Japan. that World XXXX easy we in year, million EP beautiful customers us launch position XXX-megawatt launched residential officially products World We're which Power -- barriers design, strengthen battery battery Last and that team Cube's directly Week network, to ability achieve in a back shipping building Europe Smart be existing is EP entry. advantage has storage by Cube solar the editorial will we hour our picked has a the as and Cube leverage DC installation storage XXXX week. their installer our one business Cube storage both able at AC and came significant the strong distributors the product. with best of given customizable design. from This our the market and believe modular last echoed U.S., to consumer side, and closely now targeting On been QX in to battery and the very EP products the after I help successful we've residential the and favorite least Energy in We market brand coupled, launch, channels. were competitive Solar our Since and to from incredibly and the which in module in the EP just have event

neutrality through change of defined in The that energy the carbon security our Energy significant our decarbonize other market to economies is proposition strategically with and is company as and carbon industry awareness not and tools impact creation value growing our same the value Global look the of about such future. how initiatives would pricing global the undergoing how we positioning, system think efforts

will PV+ the to But efficient more we is our treaty. and be it the creation. focus integration energy past, systems it plus We PV PV+ business been to even customers. value seek only. increasingly, that much for storage, storage, creating systems a on differentiate may our always intelligent to so value facilitate Our model always have In are

Now go ahead. on to it pass let Ismael, me Ismael. please

gigawatts in million gross revenue $XXX Thank in profit. you, $XXX XXXX, We and to XX. in project in sales X Please Slide turn achieved Yan. million

improved Our by gross margin year-over-year points XX.X%. to XXX basis

timing the to a smaller project was of a project expected, monetization due As from sales. quarter standpoint

to certain Additionally, in term markets decided as the projects can long-term capture Europe, such value being owner where in longer operator. to QX, we we more hold and asset by more believe on we

Next slide, please.

focus QX solace XXXX, project originating of we developing global most to During on larger solar continue and assets. valuable and battery energy pipeline and

more we or this decarbonize both they value of to more the over XX, energy critical. few that but important congested environmental at gigawatts will focus shift We interconnect hours time next position believe energy. determinants hours contracted as one where important, battery we mainly a gigawatt hours of reasonable gigawatts projects. continue As have of which that past, permitting, be high-quality battery solar still XX pipeline total be at as clean years. of is The grids assets interconnections assets that low deliver a increase already value. we of XX the on solar projects the of are And and cost a XX solar from solar at our world most and to had XX over timeframe the storage to of very and was revenues ability only This and the interconnections. XX XX-gigawatt will and wind this, means become January and absorb stood absolutely Of in for of will storage fact interconnections gigawatt to gigawatts continues of storage are strong the

Please Slide XX. turn to

We Solar differentiates we vast of cycle. that pipeline greenfield. through can that Canadian the companies few our the developed value is one from factor development of the entire that capture majority other significant The are project

we selection operations And XX financing from of hours gigawatt is gigawatts hundreds and all our continents. X and six plants are have capabilities nearly power amazed maintenance, initial asset across unparalleled. and Our expertise permitting storage literally the management. projects projects the years' site truly of across battery we major These all to delivering way and solar execution, of X experience have had expand regions

please. understand select slide, business revenues calls, asset form as such and difficult to to as increase basis, given to its our income, discussed the retain accurately means to through lumpiness while We sales, generated Global difficulty income. power term, operations forecast our Longer not the recycle most to asset our assets, markets capital create. that Next we in value strategy we've of closings. recurring and on the constant the is a is the greater and current on may ownership And and management quickly we in maintenance solar Energy develop capture sales quarterly sufficiently pressure some that storage time of product the battery we deal valuable prior

value where standpoint. sense So to our for on creation a it plan assets certain is to longer, risk hold makes and from

operate in fund. in to This strategic partnering creation project and projects and was will assets the be we we term with lower a recently recurring of revenue flow keep for more gradually first a to accounting example, spot decision slightly of over us by QX capital term will This closed retain cash one, investment our XX% partners. cost a sales. over investment the longer way, Europe sales considerations. For sale longer alternative The moving to vehicle allow of business value Italian factor from lower the

let Now, detail. in Huifeng, results it who to will financial go on ahead. through pass go greater please Huifeng, the me

at to XX% XX% we revenue. healthy Please higher guidance CSI $X.XX to Global XX.X%. margins of XX%. was points by gross Solar Ismael. basis you, with to expanded our while XX XX. Energy Thank growth achieved turn of margin end XX.X%, in In year-over-year margins in at Slide QX QX, XX.X% a Gross billion gross were revenue the a

in even Selling with sequentially and continued distribution shipping our expenses increase declined XX% volumes. by

mentioned, back normalized level. Yan shipping finally As costs to are a more

due other lower different are are the OpEx limited transportation impairment but and shipping XX% see labor and costs starting General picking to the declined world in offset hand, On by slightly this to of is decline due we expenses administrative to in costs. the ground parts than sequentially availability, the up costs. efficiencies more

sequentially. Net total foreign in and Research operating are in driven in the and $XX the in was the loss $XX to XX% higher Put $XX were which to net million level we R&D $XX Japanese net EPS quarter development introductory XX% million since XXXX, battery dynamics is the shareholders by third partially QX play Shawn expenses derivative This down was his as expenses together, Canadian our was yen million, in Total lowest investments storage remarks, is and starting and fourth workshops. of increased gain revenue, U.S. sequentially of mentioned income the of total reversing the The with achieved the the quarter. strengthening solar as XX.X% euro loss out. million, dollar. at diluted against mainly driven exchange attributable Solar $X.XX. by income or the

Now flow turning sheet. the to the balance cash and

slide, please. Next

a in billion around cash $XXX in cash approximately year operating of of further prior healthy and X.Xx we and For measure excluding $XXX as period We total We net improved balance last ended million quarter the QX of net X.Xx CapEx. X.Xx restricted debt-to-EBITDA, million with in $X.X cash, million. $X our generated leverage full year. the from and to XXXX, the spent of

XX% internal the our year's next market. from be significantly favorable remaining prepare XXXX, Southeast we CapEx it business CapEx and down-payments the this reflects For scale for historical capacity establish our compared much billion to global CapEx Over with as higher we Asia, and approximately generation but growth manufacturing support will customer for another capacity by our year our U.S. is This of we the and $X.X the larger XX% expect financed in the U.S. cash capacity spending, plans. debt demand and in expand financing. especially be of as outlook, to

Now, guidance to outlook. back with let Shawn, our will turn me the Shawn, conclude call ahead. the and who go please business

Huifeng. Thanks,

XX. to Slide turn Let's

solar solar are XXXX, revenues to Total of module of Energy in of approximately quarter to Global our X.X in to seasonally is to by first to from module including Solar shipment expect XXX of billion Gross expected X.X gigawatts, be range QX project. smaller CSI quarter. expected lower billion the the be range between For we to manufacturing be shipments reflecting the XX%, costs. margin to as tends a XX% improvement margin be $X.X the to $X.X megawatts

For to although battery Energy’s may from longer products, sales of expected are the forecast own storage Solar's our full to between guidance to explained some want reiterate expected X.X as year's year of be CSI currently XXXX, our Global on module Solar's to be XX to we by the project Yan hold gigawatts, gigawatt. revisiting CSI total be shipment reflecting in solar XX are to this sales more of term. around manufactured transition label to are X white to as gigawatt hour, shipments projects X project we earlier. we range

the revenue remain $X.X $X.X areas advantage. We us this year expect profitable We full be of our differentiates billion shareholders. on value range to lasting in we also the We investing introduced in our competitive focused XXXX, and growth billion. we for believe guidance as of to long-term which build for

your open With call that, Operator? to I would for like the questions.

first question Instructions] with [Operator is our Rusch Oppenheimer. the of Colin from line And

can should of XX% you thinking something to period? this a planning. Can you as you and creation value Is end value kind a Or the that as look gross be to talked well business, gross about guys where about this margins capture about you bit XX%? company get the multiyear the you we the Shawn, XX%, vertical where little think changing XX% at up integration talk as over margins? is

Solar's had the range. good XX% XX% past, Well, very margin gross been Canadian in in to question. a That's the

quarter from much And raw material gross information. the only XX%. raw and COVID then but material to also raw everything XXXX, basically and material has we margin to not every example, our had increase cost XXXX pretty about solar, happened For the for

my the said material this bottom of cost started to already decline I of reach industry, some also of we the decline, will and for think every to And the XX% And that started in as part raw I term. it long costs the to cost hope competition in stabilizes, mid- stabilize. like just the So presentation, once we curve. to is do somehow something in the think can industry, should XX% for solar eventually

as you can And hard super the to these really to costs positions? like you've and actual there then these are That's contribution at the refi your going contribution just them? all be once built cash projects hold talk here? helpful. about you look you projects, cash retaining an and refinance be Or going out able to actual equity Is

I to answer like Ismael? ask Yes, Ismael to would question. this

you, Thank Shawn.

working That's are long is initially, as idea. the to revenues it still run, recurring on can. We the as on the move to quick but we initial into intention start

just hold value are significant idea Okay. Maybe and take of equity I'll a minimal down a actually that you be the to the then. that on that capture But part going amount take pass just But is of it the offline I'll to and able offline. cash guys road.

Our Vikram Bagri of line from next Citigroup. is the question with

and is spent, to whether And for talk your capacity on and modules? manufacturing vertical understand term? Can spending like TOPCon Just much being be can trying about poly expansions, does the on spent last you following of the do split expanding the where 'XX? 'XX vertical if what portion at trajectory versus how internally? be look the whether facilities compare? look you it with spend? also, What in the be How will higher think how the in capital existing is expanding at how retaining ROIC allocation is capacity the equity these ROIC will Sort integration in you projects, beyond the will When longer of integration, between capital being question. up spent on the you being on you do CapEx comment spent, investments

groups business Yes, see, CSI Solar call run the we the independently. two business, business and we project Energy now these two group. Global the run We business

they their decisions. own So make

question. that's The don't of to decisions We So their I the where own business therefore, base. money. compare equity your my guess spend their have really answer groups second They capital. make two allocate to own

CapEx I or that, the like like which Yan with is or your manufacturing integration vertical CapEx, have that. to Now spending first CapEx would question, and things whether about TOPCon are upgrade, answer money we to on

and income current covered, expansion either such manufacturing expansion is the -- the the the expansion, combination the manufacturer, And for for the are U.S. down-payment. or plans, on operating -- the projects actually excluding mostly as so the customer plan, bank the so by it's capacity Thailand lendings. CapEx sources, covered Well, other different covered of silicon a proposal U.S. it’s for

silicon for So capacity really and the longer those China is don't we CapEx expansion, on depend IPO term. more the

we’re So here China. we will decide after listed in

flow. on investment And CapEx -- details. speaking, overall cash can Isabel later I you detailed breakdowns. CapEx and our and very different for think the So return Ingot, are expenditures it's depends. module, on But coverage with we're cell okay really up on follow

backlog I has and And the Can little there like the in on see increased volumes in like drove came relative the that What our seems light down? one the to I It in pipeline. the the guidance early-stage storage America ask expectations. North a supply were to relative follow-up a also? Was constraint drivers? a batteries volumes lot,

of from, you Are new what demand the can seeing geography partnerships? increased on can that those America, seeing demand that drivers of on from? also part comment you're are what you comment increase? If increased that you're If what North

Okay.

longer utility as projects question. the much So actually, that's a sales. have storage on time have a they are Actually, -- we -- scale lead good you know,

of half actually closed ago the need So now, the longer. a was project whatever contract even or example, year we for execute, in right XXXX, first that to

had our of product. a sales But on so own the that white developed we chain SolBank storage. you of beginning -- as -- switch pretty in from product our XXXX, to and So the decided change dramatic to level, time was by supply around label that -- remember, the we

a was transition. that So

bankability to work stuff. certification, we So on need

towards this we that's second have today is pipeline half So more -- the year, not first of why this year. of half we

terms end it’s shipments, USD about So quarter rapidly. you billion and this And X the our at recognition signed number that of signed if carries very every And of skewed to look is much already. in contract, the kind however, contract increasing year. of

total towards our enough XX-gigawatt to SolBank expanding by storage we capacity Reason going we're hour [XXX%]. year, not know capacity. this, So have next behind we're

So will XX-gigawatt is the total have This transition. hour pipeline And system real next year be year growth. utility a storage the for of we integration projects.

So we know going reach year that XX-gigawatt next to number we're next year, either that already. where close to or hour

this question. answers So Hopefully, is this situation. the your

[Operator from Instructions] ROTH is Shen line the Our question Philip next of with MKM.

earlier, wondering show a QX. you as ahead color. is what I the things you of little the give IPO there in you is million was to can detail remind everyone of that on $X finally, Solar. little And it what know through terms next such rough the with some like steps? $XXX bit timing expectation know But what to I road raising a the the a the to how guys you I I can addressed CSI are on IPO more $XXX plan at much and you expect you Congrats that? billion proceeds? But that share use million for approval. completion remind billion in talk plan can valuation targeting? and you and color, us of Yan. valuation little on bit more And just gave $X you for Shawn, of the could recall Can a then the you is if

for also thanks, are Philip, the we that and we received registration. the pleased approval

schedules you. talk will and We roadshow our bankers pricing about investment update hopefully roadshow to and the and schedule,

and proceeds, Huifeng do question? the use of of want of raised proceeds be Now in terms this the to you amount address to also

Yes, planned. Yes. you Shawn. earlier Thank you, much Phil, said more so what is

U.S., that However, happening We market the the capital on market all of the know things Europe and high depends market, too. capital a Chinese the lot volatility expect in also we condition. in the in it

X.X this have we you know, years. as on working for However, been

we cetera, and obviously, as will cetera, to as et doing further process financial but and it deal there's approvals So that roadshow soon no our then quickly are get possible. needed. want process, very as et then done And such update information be more regulatory a

Going And we of the morning, with hours news only own the forward, for the the in cetera, billion ago. have And actually proceeds, prepared couple the of then obviously, cash efforts et new that, marketing the use investors. arrived of this bankers, the it's CapEx year. before our a $X.X and terms good in

So now obviously, market. this expansion, now capacity in IPO even integration up certainty, speed the support to looking the vertical proceeds, especially for with in more and U.S. be we'll

then you -- all I Great. know as was the as wondering to that But help terms Thanks expected the be earlier. rate was cents how And for you come you is Do gears us in what understand cost I color in we was through sales it percentage much you also to gave a what might expect detail. expect some you of per if comment down? shipping quantify you watt? OpEx could Shifting on get year? can ahead? shipping costs -- what of do can QX run the be to your

Okay.

So in down $X.XXX QX it terms over $X.XXX shipping and came just to of in cost, $X.XX, a like in little QX.

was much than peak. So lower peak it the than more almost in the like $X.XX, actually $X.XX was so

as are normal. most coming stage. to have a And very normal unit So stabilized The shipping the a this bit. volume the total cost down, cost can see We maintain low we situation worldwide ports overall, goes little back don't be we'll costly. will congestions to up. we saying back increase back importantly, is bounce But as and level anymore. congestions you coming know, The as the not

aside see on don't we expense, the So associated scale operating that see are major do with volume leverage any some growth. we actually, from And because the change costs scale. --

going the up. volume our should So improve, profits

ask one more. Great. I'll

gave As it official margins, relates the you to guidance guys for QX. the

potentially Just for more how continue can you as in -- potential trend and the QX more to and official support you? QX, shipping down back looking poly potentially through margins and giving strength to comes costs Do ahead without QX you guidance? see the talk you expect QX

Yes.

overall that that -- speaking, will think I would growing will It down. will I still we're And down continue fast. elastic. still to gradually not come go It costs because the we is cost the demand believe don't not market collapse, down believe price we will the polysilicon in is go also So market may right?

up going on cost So down, going demand more. even

however, we there not a everything chain. supply in pace. also on are So the moves complexities that understand perfect It's

certain material time. some may in certain shortage have are there So

that a So margin better works in may for better year. be actually a overall, I our create manufacturers certain situation. complexity. will think It module But this

Sachs. question line next Brian Lee with the Goldman from is of Our

Maybe as context in -- question us pricing hearing improve sounds building, follow-up that quoted. pricing to a what just gross There's even certain for supply a like is kind some outlook it your to the through Can expecting in give you're embedded you sense moving of year. a pockets? we of bit module in double-digit margin Phil's of being declines the are

where you through activity trends and kind of any year? see out where on pricing time as module you the real seeing update quoting So you're look

Okay.

industry module pricing years. So XX actually for the being in

old the feel price I less actually, compared So pressure times. to smart

important. pricing. industry, also market the just products, now actually So bankability down on and we all worried we do and becoming are that realized the module the gradually, reliability it's quality than customers coming see more of price but the The supply

are see the than behavior more -- There's today much to now be But little speculative speculation, customers So that a there's less market. before. rational used even low-price on last the China pricing. we

They respect reasonable So customers are pricing. your accepting margin. index

price-wise So will our but believe margin down, that continue to I still improve. going

to speak and I some prepayment if and customer what there manufacturing Can you then of the the And strategy on prepayments. applies build specifically you're to U.S. talked mix us know you where Great. capacity about also stand the in update enough. of CapEx sort Fair Okay. U.S.? planning commentary to having the you

Well, Shawn speaking. is Brian, this

proceeding manufacturing plant. are We with on our start well U.S. our plan. module We'll

any did yet. haven't announcement We

capitals. will are make two announcement. Solar a manufacturing or in So covered months, part give the maybe an customer weeks And Canadian equity also CapEx and facility, us months will down-payment. few But one or of U.S. by the be bringing the we

sense. pass Last for one for and this me, on. or Makes it Ismael. Okay. Huifeng is I'll Maybe

markets financing that just for of capital guys you environment. you in or anticipating in Global environment us availability, also does of there? What maybe the segment level segment? of the Energy in a we've set Are lot or you volatility, volatility, seeing the specifically with energy capital banking capital the and forward what environment financing Just changes cost seen any for on mean going kind see

color. Ismael, first? want don't Huifeng Well, And to add comment you may why some then

need rates up, Look, ownership Sure. puts general, pressure to interest end, at because given when the a on from in rates. you be the interest move differential the project

mind that is Now to XX project XX a that you need in years. bear an asset lasts to

and where So will rates interest higher the are have rates interest it are what then to lower. time

terms In in terms capital see the of of availability, market. capital we

in seeing raised people that I'm deployed a think constraint right not years capital actually, of I the of lot money past be opposite. to any on the sector. couple now; this

capital the having are the to sector. people on think pressure I allocate

have I more feeling money the least projects way at now, than ready there right invested is, is there be is that that on. to think I

Brian, is Hi, this Huifeng.

Huifeng?

Brian. Hi, Yes.

are For funding costs, two actually there dimensions.

the dimension pushing up, to we markets, very space. going The general are the are renewable that, into costs space capital are But world climate on correct, are all fight too. one entire the unique and for we a investments change. in in You see

projects we the they planning investors work a hand, push We space. So part in ESG mission that are the government, But want our markets, to other of the world. of of into also of institutions on to coming local financial every that, taking lot with in direction. into investors, advantage projects the different are lot the those and a

partner also lower funding them to we So our costs. with

from Instructions] [Antares [Operator Capital]. Zhang] question will of take final our [Anne now We

are business. questions our my focused on basically battery storage So

is quick. first question The pretty

for the So have guidance we do shipment quarter? first battery any for the

For the first quarter...

No.

So the is the guidance for year.

Okay.

Okay. I understand.

So a my next of margin lithium battery we to lately. is gross the business. price has lot noticed Since that question dropped related

it XXXX margin how So and will year? much battery the for help gross for our the quarter first of whole

much what? how sorry, How much --

help? it Will

Okay.

supply depends have by project. pricing So battery agreement. project speaking, mechanism But on it on overall mixed we the a do cell really

pricing. on it's So the partially indexed lithium

I for So lithium benefiting we believe benefiting are is from down. entire price going sure. also And this the industry

that scale EP residential products, product, And our released along I a Okay. SolBank, also storage understand. with storage I Cube. we utility noticed

more more As we it’s residential the see and intense. getting storage market, competition in

and So what advantages Cube Cube EP does EP have which target? that markets

Yes.

the you I much side, answer Cube, And storage is on margin the question side, to starting the on yes, we're -- margin gross think mid-teen the EP for as first, that from -- last know margin. targeting higher. So the SolBank. utility actually sorry And the

we're gross setting the so very with will similar in margin. QX So start market. U.S., in pretty Japan, quickly in anything to the ranging and the And launching we sell and line That's XX% a from in time. around actually Europe XX% to

global really year-end, we on volume, is have we by some a should guidance which -- XXX-megawatt annual So And launch. we provided hour. don't

real next the next for the scale EP and year for Cube be year. same will SolBank with for However, growth

Understood. Okay. question... last And my

say Just -- go want to ahead.

Okay.

Okay.

term, So three Cube EP my the years? say, market or share goal what last our question is is, in in five for long

market want share is we're Cube so to markets gain we with because in more -- product, to share the run. profit profit ability high-end actually EP Well, designed long the targeting more XX% term in market like the However, get as premium long more a

sustainable current So positioned as shortage Cube actually go EP we want solution to the a our -- to the we beyond products longer make of reason we is more for actually term. product high-end

time, Canadian Qu, At this remarks. you. closing Thank the for back turn floor to I'll Dr. CEO, Shawn Solar's

All right.

support. us today continued your So for thank also you and joining for

have Investor day. and or set would any please a nice have Take Relations call, a to our questions you contact If team. up like care,

lines This will Thank disconnect conclude participation, now may at today's you your your this time. conference. you for