Scatec ASA (Hold, TP: NOK155.00) - Going nowhere
Scatec delivered a decent Q3 with power production 11% above consensus, offset by lower pricing, margins, and D&C contribution. Management has changed its view on cost inflation, which negatively affects upcoming projects, as we see an increasing risk that project economics could result in negative NPV. While new projects add to D&C earnings, we are 12% below consensus EBITDA for 2022e. We reiterate our HOLD, but have lowered our target price to NOK155 (165) owing to estimate revisions.Scatec Solar ASA is a Norway-based integrated independent solar power producer. It develops, builds, owns, operates and maintains solar power plants, and has several projects under development in Africa, the United States, Japan, Brazil the Middle East and Europe. The Company has three operating business segments: Power Production (PP), Operation & Maintenance (O&M), and Development & Construction (D&C). The PP segment comprises the Kalkbult and Linde plants in South Africa, the ASYV plant in Rwanda and four plants in the Czech Republic. The O&M includes services provided to solar power plants in which Scatec Solar participates or to third party plants constructed by the Company. The D&C comprises development activities as well as construction of solar power plants developed by Scatec Solar.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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