Valuation of Scatec Solar

Dino Ligonja & Martin Køhn Nilsen

Student thesis: Master thesis

Abstract

Target price of NOK 49.69 implies an upside of 30.42%. Scatec's current share price indicates an inaccurate pricing relative to the value of pipeline and opportunities. Scatec has experienced rapid growth since its listing in 2014 and is expected to triple installed capacity by 2019 (~7NOK/share). Focus on climate changes, population growth and lower construction costs will continue to drive demand growth. Scatec's organizational structure build on SPV's, which yields a strong financial position. Along with important partners, Scatec has achieved a strong foothold in EMDE, allowing high-yield projects with low costs of capital. Scatec's self-funding through O&M and D&C strengthens its ability to invest in multiple projects simultaneously. Decreasing LCOE improves the competitiveness of PV technology, requiring less subsidies. Auctions are preferred by authorities worldwide, which increase rivalry and pressure margins. Scatec is expected to benefit from cost reductions and remain highly profitable.

EducationsMSc in Applied Economics and Finance, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2017
Number of pages138