FSLR - Embedded Expectations Analysis - 2020 03 03
ï€ First Solar, Inc. (FSLR:USA) currently trades at a discount to UAFRS-based (Uniform) Assets, with a 0.9x UAFRS-based P/B. At these levels, the market has muted expectations for the firm, which may be unwarranted given management's confidence about their energy production, late stage pipeline, and development business, justifying equity outperformance going forwardï€ Specifically, management is confident they expect 5.7 gigawatts of production from their lower-cost Series 6 module, have seen significant improvements in throughput and efficiency, and are increasing Perrysburg capacity to 2.4 gigawatts by the end of 2021. In addition, they are confident they have a US mid-to-late-stage pipeline of close to 2 gigawatts, have hit substantial completion on the projects they were targeting by year-end, and have leveraged their scale to maintain a profit pool in an aggressive pricing environment. Moreover, management is confident their transition to a third-party EPC execution model will move 900 megawatts of sales from their systems segment to the module segment, and they are confident their development business saw hundreds of megawatts of purchase power agreements and that they are evaluating the business for further strategic options. Finally, management is confident there is significant value creation in 2022 and 2023 for their ITC project
First Solar is a provider of photovoltaic (PV) solar energy solutions. The company designs, manufactures and sells PV solar modules with a thin film semiconductor technology, and also develops and sells PV solar power systems that mainly use the modules it manufactures. The company also provides operations and maintenance (O&M) services to system owners. The company's modules segment involves the design, manufacture and sale of cadmium telluride solar modules, which convert sunlight into electricity. The company's second segment is its systems segment, through which it provides power plant solutions, which include project development, engineering, procurement, and construction services and O&M services.
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