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2020-09-11

Analysis Industrial Solar: "Increasing public interest and exciting new partners"

Detta är en betald analys på uppdrag av Industrial Solar Holding Europe utförd av Analysguiden
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Stable development through turbulent year

The first half year of 2020 has so far been a turbulent one for Industrial Solar and the effects on their sales efforts has been large. Not only has the travel restrictions made any international travel for businesses and projects impossible, but many companies have also postponed major investments. Combining this with historically low oil prices create an environment where companies focused on renewable energy solutions are facing many challenges. Nevertheless, although the impact on the company’s sales have been large the situation could have been worse. Net sales have increased for the quarter and the half year and the company has managed to not see any significant increases in costs. The projected increased attention and support from the public sector as part of the economic recovery after Covid-19 bodes well for the future growth of the market as a whole. Although restricted, the company the quarter has so far brought several exciting news and events for Industrial Solar.

 
Larger revenues expected from SolarSpring

In the beginning of July, the company announced that the share issue for the acquisition of SolarSpring had been completed. The share issue resulted in 795 243 new shares being emitted, raising the total number of outstanding shares to 12 188 792. This acquisition is already beginning to bear fruit, as the company states in the latest report that synergies has already been identified and utilized. These synergies are especially apparent in sales activities, allowing the company to streamline and comarket these technologies. SolarSpring has provided two additional solarpowered drinking water solutions to Colombia during the period through their sales partner Col Energy. When market conditions turn more favourable the results of the SolarSpring acquisition will become obvious where we expect more significant increases in sales. Overall, we expect Industrial Solars revenues to grow for the full year and that larger growth will be visible from 2021 onwards. 
 
Upside remains despite strong share development

Since our last analysis, the share price of Industrial Solar has shown impressive development. Through using a DCF valuation method with a 15 percent discount rate as well as relative comparisons to the sector and industry, we still find an upside and retain our motivated share price of Industrial Solar at 7.5-10 SEK at this moment. Many factors are hard to project and the market is still young and dependent on public sector support, making it hard to predict and adds more risk. However, we see the company and their technologies as being well positioned to meet future market demands and global trends and we now await larger orders and increases in net sales.  

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