Equity valuation of Scatec ASA
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We estimate a current intrinsic equity value of NOK215,48 per share, this implies that the market is currentlypricing Scatec ASA shares highly efficiently at NOK 209per share. The company has experienced strong growth incash flows from operations and has recently announcedthe acquisition of SN Power which expands thecompany’s diversification in the renewable energy sectorto both solar PV and hydropower. We are quite certain theacquisition will bring a stable increase in EBIT of aboutNOK 1124 million annually and expect this to remainconstant. Scatec ASA has a highly efficient business with strongoperating efficiency. From our estimations we expect thelarge debt positions to be manageable from our futurecash flows estimations.The COVID-19 pandemic sparked immediate uncertaintyand fear in the financial markets, but Scatec seems largelyunaffected in cash flows. Therefore, we do not expect anysignificant negative effects for the company. Overall, weexpect the company to continue to increase its cash flowsin the future. Current market prices reflect thefundamental value of the business. Recommendation: Hold.