| dc.description.abstract | We estimate a current intrinsic equity value of NOK
215,48 per share, this implies that the market is currently
pricing Scatec ASA shares highly efficiently at NOK 209
per share. The company has experienced strong growth in
cash flows from operations and has recently announced
the acquisition of SN Power which expands the
company’s diversification in the renewable energy sector
to both solar PV and hydropower. We are quite certain the
acquisition will bring a stable increase in EBIT of about
NOK 1124 million annually and expect this to remain
constant.
Scatec ASA has a highly efficient business with strong
operating efficiency. From our estimations we expect the
large debt positions to be manageable from our future
cash flows estimations.
The COVID-19 pandemic sparked immediate uncertainty
and fear in the financial markets, but Scatec seems largely
unaffected in cash flows. Therefore, we do not expect any
significant negative effects for the company. Overall, we
expect the company to continue to increase its cash flows
in the future. Current market prices reflect the
fundamental value of the business.
Recommendation: Hold. | |
