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Analysis Hexicon: The value of the project portfolio increases

Detta är en betald analys på uppdrag av Hexicon utförd av Analysguiden

Important progress in South Korea
Rising global energy prices and an increasingly clear need for a forceful energy transition increase interest in offshore wind power and other fossil-free solutions. The market for floating wind technology is predicted to double annually over the next 20 years. Hexicon has a large and diversified portfolio of ongoing and possible projects that have been both expanded and refined in 2022. The most important expansion has taken place in South Korea, with an additional 450 MW in capacity. The most significant refinement relates to electricity production licenses obtained in the Munmu Baram project. Shell is the principle owner of this project, which looks set to become the world's largest floating wind farm. Hexicon's share is estimated to be worth MSEK 500-750 in 2024.

Important milestones ahead for TwinWind
Hexicon has two strategic prongs; technology-independent floating wind projects and its own patented technology "TwinWind". These reinforce each other commercially. TwinWind, which with its two turbines differs from already established solutions, is making progress in its development plan. The demonstration project will be in place by the end of 2023. Platform development with partner Worley is progressing. The company expects partner financing from one or two players later in 2022. Hexicon will also apply for development money from the EU's Horizon programme and the Swedish Energy Agency. Funding for the demonstration project is an important milestone. Another is bidding for guaranteed electricity prices over 15 years in the first commercial project with own technology (Cornwall, England). Results are expected here on July 8. Marine licenses are already in place. The project has the prerequisites to confirm the technology commercially, and is important as a complement to the demonstration platform in Norway.

Raising the target price to SEK 3.60
The required rate of return has increased in the current stock market and inflation climate. However, the increased value in the project portfolio justifies a certain upward adjustment of the price target. Interesting and potentially price-driving news can be expected during Q2-Q4 and refers to, among other things: revenue in connection with the introduction of new partners in certain projects, network connection agreement in important Munmu Baram and results regarding bidding in Cornwall. Price target: SEK 3.60 (3.54). A sustainable re-valuation likely presupposes that the stock market climate is stabilized for this type of company within sustainable energy.

Note: A Swedish version of this report was published on May 23

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