Original-Research: MPC Energy Solutions (von NuWays AG)
Original-Research: MPC Energy Solutions - from NuWays AG
Classification of NuWays AG to MPC Energy Solutions
Company Name: MPC Energy Solutions
ISIN: NL0015268814
Reason for the research: Initiation
Recommendation: Kaufen
Target price: NOK 23.00
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Christian Sandherr
Here comes the sun // Initiate with BUY
MPC Energy Solutions (MPCES) is ready for a virtuous growth cycle: The
integrated IPP owns 144 MW (99 MW proportionate) of PV and CHP assets
(incl. under construction) and has a 336 MW development backlog (225 MW of
mature projects).
The regional focus of MPCES is Latin America and the Caribbean, which offer
plenty of attractive growth prospects. Although boasting an impressive
overall renewable energy share of 63%, certain nations, notably the
Caribbean countries, find themselves trailing behind with a meagre average
of 8% but with targets of 50-100% during the next 10-20 years. This created
a lot of pent-up demand: Until 2030, the regions need an incremental 50 GW
of renewable assets to remain on the net-zero trajectory.
Assets in these regions are in high demand due to attractive returns (>15%
equity IRRs) on the back of high power/power purchase agreement (PPA)
prices coupled with strong solar irradiation leading to high full load
hours and long-term PPAs with private corporates, private and state-owned
utilities.
However, access to suitable assets remains one of the key bottlenecks in
the industry. By offering tailored energy solutions for each client with a
technology agnostic approach rather than trying to find clients for halfway
developed projects, MPCES put itself at the forefront of the regions’
transformation, since it is (1) able to de-risk its projects and (2) gain
access to sufficient high-quality PPAs.
Ready to kick-start a cycle of growth. While FY23 was a transition year
with the departure of the former CEO and the resulting strategy overhaul
(divestment of several projects and focus on co-investments to improve
equity IRRs), the company's mid-term should be marked by strong growth.
MPCES' current proportionate production portfolio can generate annual sales
of around $ 11.4m (eNuW). This is seen to strongly increase as MPCES
executes its backlog. San Patricio alone (construction started at the end
of Feb.) should contribute $ 4m additional sales annually. The remaining
225 MW of mature development projects could boost annual proportionate
sales to roughly $ 31m (eNuW, 51% ownership and $ 65 per MW/h). With
incremental EBIT margins north of 40%, the group’s EBIT margin would hence
surpass 30% (not reflected in eNuW until the projects are under
construction).
Initiate with BUY and a NOK 23 PT. We value MPCES on a sum-of-the-parts
(SOTP) valuation, separately accounting for the value of its current IPP
portfolio (NPV) and its development backlog (multiple).
You can download the research here:
http://www.more-ir.de/d/29303.pdf
For additional information visit our website
www.nuways-ag.com/research.
Contact for questions
Die Analyse oder weiterführende Informationen zu dieser können Sie hier downloaden: www.nuways-ag.com/research.
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.
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The result of this research does not constitute investment advice
or an invitation to conclude certain stock exchange transactions.