Our target prices increases to €12.39 (from €11.70) following the Urug
We are increasing our target price to €12.39, from €11.70. This combines value from the recent acquisition of Carapé in Uruguay and refinancing the Manchasol 2 plant in Spain.
We are increasing the discount rate from 5.0% to 5.5% to allow for an increased exposure to LatAm. We understand that Kiyu (49MW Uruguay), Oaxaca (102MW Mexico) and Lestenergia (144MW Portugal) may soon be acquired.
We believe that Saeta is preparing itself for a large acquisition and expect this to be funded with a combination of existing cash and a right issue that should be seen as a positive if the investment targets (cash yield and returns) are similar to those seen in recent acquisitions.
Saeta is our favourite pick of the RAB listed Spanish companies. We continue to recommend to Buy.
Saeta Yield SA is a Spain-based company engaged in the utility industry. The Company specializes in the production of energy from renewable sources. Its business activities are divided into two segments: Solar thermal plants and Wind farms. The Solar thermal plants segment comprises solar energy generation installations in Spain. The Wind farms sector is responsible for the operation of a range of wind farms located in various countries, including Spain, Uruguay and Portugal. It cooperates with Actividades de Construccion y Servicios SA (ACS). Furthermore, the Company is a parent of a number of entities, such as Extresol 1 SL, Al-Andalus Wind Power SL, Parque Eolico Valcaire SL, which are active within the energy production sector.
Bankinter S.A. is a Spanish brokerage firm established in 1989. The company's line of business includes the provision of market research and trading services for Equity and Fixed Income products.
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