Enefit Green AS (EGR1T ET), Initiation of Coverage Report
* Enefit Green AS (‘EGR’ or the ‘Group’) operates renewable energy production units in Estonia, Latvia, Lithuania, and Poland. Over 77% of EGR is owned by the major Estonian energy group – Eesti Energia AS, which fully belongs to the Republic of Estonia. EGR produces renewable energy and heat from wind, sun, biomass, mixed municipal waste, wood chips, natural gas, and water. Currently, the Group has a total installed electricity production capacity of 457 MW.* According to the recently updated EGR’s development strategy until 2026, the Group is set to expand its green electricity production capacity four times to 1,900 MW, investing approximately EUR 1.5bn in new development projects during the period of 2022- 2026, while EGR’s annual renewable electricity production should expand from 1.2 TWh in 2021 to 4.5 TWh in 2026.
* We have approached the valuation of EGR using a combination of income and market approaches. In sum, we initiate the coverage on the stock with the fair value range (FVR) at EUR 5.00-5.40 per share. We believe that the core attractions of the investment case are EGR’s good expertise to execute the growth strategy, its solid development portfolio with potential large additions to the pipeline, supportive operating environment and regulations, good track record in securing long-term PPAs, and the current low leverage for flexible capital management.
* This report contains a full set of financial forecasts and is useful for gaining an initial insight into the company. Please also refer to the tables and charts in the attachment.
LHV Bank is an independent pan-Baltic bank, based on Estonian capital. The company was founded in 1999 by two founders of Hansapank (today’s Swedbank in the Baltics) and has been offering a full range of investment services for 15 years. In May 2009, LHV received a credit institution licence allowing it to provide all banking services.
The head office is situated in Tallinn, Estonia. Cross-border services are offered in Vilnius, Lithuania and in Riga, Latvia. LHV provides brokerage (institutional and retail), asset management, banking and capital markets services. Compared to other banks, we are more innovative and have more solid experience in investment and entrepreneurship.
The Bank, together with the Group asset management company employs over 320 people. LHV Group shares are listed on Nasdaq Tallinn.
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