Photon Energy: expanding beyond physical assets (stays BUY)
We reiterate our BUY on Photon Energy and increase our 12M price target (PT) to CZK 105/share (from CZK 90/share), yielding 56% upside. While we expect power prices to continue falling in Europe and we have also become more conservative on the company’s capacity rollout, mainly in Poland, the hike in our PT is driven by Photon’s recent acquisition of Lerta, a Polish power-tech company. Moreover, we assess the impact of recent regulatory changes in the region (caps and windfall taxes) as in line or even better than we expected previously. With double-digit EBITDA growth in the coming years, a healthy balance sheet and exposure to all of the segments of PV downstream, Photon remains one of our utilities top picks. Photon is trading at our 2022-24E EV/EBITDAs of 7.4-9.7x, 37% below its peer group, at attractive multiples, partly on the very low liquidity of its shares.Photon Energy NV. Photon Energy NV is a company engaged in renewable energy industry. The Company offers solutions and maintenance services for photovoltaic (PV) systems. It divides its activity into five segments: Wholesale and Import of PV Components that includes purchasing and sale of PV systems components and sales, distribution and support; Engineering and Construction Services that comprises project engineering and turnkey construction of PV plants; Production of Electricity that includes special purpose entities (SPE) engaged in building of PV plants and distribution network and electricity production; Operations, Maintenance and Supervision of PV Power Plants of third parties and internally owned; PV Investment that represents joint venture (JV) companies; Corporate Operations that comprises financing and insurance solutions for PV investors, investments in PV projects, among others. On September 3, 2014, it established new wholly owned subsidiary, Global Investment Protection AG (GIP).
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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