Maxeon's change 'nearly in position' as it upgrades production centres and lands SunPower contract

• The foundation of a "transformed Maxeon Solar Technologies" is almost in place, according to the business's CEO, after it resolved its logistical failures, experienced strong demand for its products and landed a supply contract with US residential installer SunPower.

Maxeon reported Q3 module shipments of 577MW, above its advice variety of 540MW to 570MW but below the 655MW it shipped in Q4 2022.

In November, Maxeon introduced it was overhauling its logistics technique after a shipping "logjam" made it miss its Q3 shipping advice. By the end of Q3, 37% of the business's modules stayed in transit and also can not be counted in its shipment results, adding to its missed support, it stated at the time.

The Singaporean firm has actually now built out its interdigitated back contact (IBC) module line in Malaysia and "can currently ship product to Asia consumers in less than four weeks contrasted to our previous reliance on Mexico, which took more than 10 weeks for delivery," said its CEO Jeff Waters during a teleconference with analysts.

In North America, Maxeon's freshly updated performance line capacity in Mexico "can deliver product to United States clients by means of vehicle in one to 2 days compared to a lot of solar business taking a minimum of 10 weeks delivering on the water from Asia," stated Waters.

" On a more tactical level, we're additionally renegotiating contracts with shipping partners in Asia, focusing more volume and also less partners to secure better pricing," he included.

Sky-high shipping costs have actually been a thorn in the side of the sector because the COVID-19 pandemic started, with some carriers currently charging ten-times greater than they were in February 2020, adding to the boosting cost of modules.

On the other hand, consumer demand for Maxeon's performance line modules reached around 700MW of incremental orders with more than US$ 70 countless prepayments.

" Given that our last incomes phone call, we carried out agreements with 2 consumers to supply over 700MW of our bifacial efficiency line panels through 2024, bringing our acquired backlog to over 2GW," said Waters.

A ROTH Capital note on the outcomes said Maxeon's "reservations energy stays solid as it is properly sold out for 2022/2023 as well as is currently scheduling into 2024."

" We expect demand to continue to be strong provided the business's exposure to the EU distributed generation (DG) market, which management mentioned as a solid development driver in its Q1 2022 overview," it included.

" In our DG organization, European channel partners remain to set brand-new sales records and also are responding with terrific interest to our new item launches-- AC modules, Maxeon 6, 40-year service warranty as well as extra products coming soon," said Waters.

On the other hand, Maxeon has actually settled a supply contract with US residential solar installer SunPower, "which not just reset prices for our items to current market levels, but also improved and accelerated our capability to extra generally resolve the United States market," claimed Waters.

The agreement additionally supplies Maxeon with "the chance to launch our own US DG channel, starting with industrial this year and also including residential next year," claimed Waters, including that SunPower doesn't resolve 90% of the US market suggesting more room for business growth.

Undoubtedly, ROTH Capital believes the agreement with SunPower sets Maxeon up for higher ASPs and also margin expansion, with the company's ASP up from US$ 0.39/ W in Q4 2021 to US$ 0.44/ W in Q1 2022 based on the midpoint of the guide.

Maxeon styles and also manufactures Maxeon and also SunPower brand solar panels, and also has sales procedures in greater than 100 countries, operating under the SunPower brand name in certain countries outside the USA.

Analyst phone call details extracted from Seeking Alpha