Fintel Energija: All set for the auctions ahead (stays BUY)
We reiterate our BUY recommendation on Fintel, with a new price target (PT) of RSD 803/share (from RSD 824), implying 34% upside. This year, Fintel’s wind portfolio should unlock its full potential, in our view, after the COVID-19 related measures imposed by the government hit its profitability last year. We expect its 2021E EBITDA to grow by 64% yoy. Separately, by September, the form of the new support mechanism should be known, followed by auctions later either this or next year. Fintel could, therefore, start building more than 100MW of new wind capacity (out of its 1GW wind pipeline) next year already. We believe Fintel is well-positioned to win the auctions at attractive prices, thanks to the stages of its planned projects and the investments made already. Lastly, recently, Fintel announced its 640MW Agrosolar project, which is intended to operate as a merchant plant. The stock remains very illiquid and is fairly valued vs. its peers, in our view. However, we still believe that our DCF captures the company’s vast potential better, so we stick to our BUY rating.
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