摩根士丹利-美股-能源行业-可替代能源2019年Q2：首选依然是FSLR、TPIC、HASI与BE-2019.7.10-49页.pdf

North America Equity Research10 July 2019Alternative EnergyInto the 2Q19 Print:Top Picks Remain FSLR,TPIC,HASI,and BEIT Hardware,Alternative EnergyPaul Coster,CFA AC(1-212)622-Bloomberg JPMA COSTER Mark Strouse,CFA(1-212)622-Paul J Chung(1-212)622-J.P.Morgan Securities LLCSee page 47 for analyst certification and important disclosures.J.P.Morgan does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.We remain constructive regarding Alt Energy fundamentals and reiterate our favorite ideas heading into the 2Q print.Alt Energy stocks under coverage have outperformed YTD(up 52%on average vs.S&P 500 up 19%)owing to strong global demand,stable ASPs,decent execution,and improved clarity regarding government policy(especially in China).Top picks into the 2Q19 print are FSLR,TPIC,HASI,and BE,all Overweight rated.With this note,we are introducing CY21 estimates and introducing Dec 2020 price targets for Alt Energy stocks under coverage.First Solar(FSLR/OW/AFL).We believe that the company is heading toward a strong earnings inflection on the back of the Series 6 ramp that is not fully-priced into the stock and which could deliver EPS upside in 2020,relative to current expectations.FSLR stock is up 58%YTD(S&P up 19%),and we have high conviction that the stock can continue to outperform if the 2H19 Series 6-related earnings surge plays out as forecast.2H19 estimated EPS of$3.13 represents a more normalized earnings power for the company and points to potential for massive upside to consensus 2020E PF EPS of$3.68.We are establishing a Dec 2020 price target of$74 from a Dec 2019 price target of$72.TPI Composites(TPIC/OW/AFL),the leading global wind blade contract manufacturer,is up just 2%YTD owing to one-time negative events that occurred during 1Q.We expect 2Q results to point to easing headwinds associated with the 1Q events and for management commentary pointing to normalized operations by YE19,setting up for solid growth heading into FY20.We are establishing a Dec 2020 price target of$37 from a Dec 2019 price target of$34.Hannon Armstrong(HASI/OW),is a capital and services provider focused on assets that reduce greenhouse gas emissions and lower the impact of climate change.We expect transaction volume to remain elevated in 2Q,and a high mix of securitizations,driven by the shape of the yield curve during the quarter,could lead to upside to earnings estimates.The stock has outperformed YTD,up 49%,but with tailwinds to earnings and a DPS yield of 4.7%,we believe the stock remains attractively valued.We are establishing a Dec 2020 price target of$31 from a Dec 2019 target of$28.Bloom Energy(BE/OW),a July 2018 IPO,is a leading supplier of fuel cell energy solutions that will contribute to both de-carbonization and potentially disruptive decentralization of the global electricity grid over the next 10-20 years.The stock has also outperformed YTD,up 30%,and we expect managements narrative to remain constructive,particularly regarding 2H19 and into FY20 ahead of the Gen 7.5 server availability.Backlog,above all else,provides us with confidence that demand is strong,aided by the recently announced partnership with Duke Energy,justifying managements outlook for a return to above 25%revenue growth and over 25%gross margin in 2H19.We are establishing a Dec 2020 price target of$33 from a Dec 2019 price target of$30.2North America Equity Research10 July 2019Paul Coster,CFA(1-212)622-Equity Ratings and Price TargetsMkt CapRatingPrice TargetCompanyTicker($mn)Price($)CurPrevCurEnd DatePrevEnd DateBloom EnergyBE US2,054.8812.96OWn/c33.00Dec-2030.00Dec-19Canadian SolarCSIQ US1,282.3621.65Nn/c25.00Dec-20n/cDec-19First Solar,IncFSLR US7,049.6467.11OWn/c74.00Dec-2072.00Dec-19Hannon ArmstrongHASI US1,774.9228.46OWn/c31.00Dec-2028.00Dec-19Ormat TechnologiesORA US3,204.0662.81Nn/c66.00Dec-2060.00Dec-19SolarEdge TechnologiesSEDG US3,224.7462.27OWn/c71.00Dec-2063.00Dec-19SunPower CorporationSPWR US1,802.8412.47Nn/c9.50Dec-207.00Dec-19TerraForm Power,Inc.TERP US3,066.6414.59OWn/c16.00Dec-20n/cDec-19TPI CompositesTPIC US874.4025.05OWn/c37.00Dec-2034.00Dec-19Source:Company data,Bloomberg,J.P.Morgan estimates.n/c=no change.All prices as of 09 Jul 19.Table of ContentsAlternative Energy Coverage.3Stock Coverage.3Stock Performance.3Bloom Energy.7Canadian Solar.10First Solar,Inc.14Hannon Armstrong.17Ormat Technologies.21SolarEdge Technologies.25SunPower Corporation.29TerraForm Power,Inc.33TPI Composites.3610 Years of De-Carbonization and Some Electrification.39BloombergNEF 2019 New Energy Outlook.45United States ITC and PTC Update.463North America Equity Research10 July 2019Paul Coster,CFA(1-212)622-Alternative Energy CoverageOur top picks heading into 2019 are Overweight-rated Bloom Energy(BE),First Solar(FSLR),Hannon Armstrong(HASI),and TPI Composites(TPIC).We are also overweight TerraForm Power(TERP)and Solar Edge(SEDG).Stock CoverageTable 1:J.P.Morgan Ratings and Price TargetsCompanyTickerAnalystRatingYE20 PTPrior YE19 PTBloom EnergyBECosterOverweight$33.00$30.00Canadian SolarCSIQStrouseNeutral$25.00$25.00First SolarFSLRCosterOverweight$74.00$72.00Hannon ArmstrongHASIStrouseOverweight$31.00$28.00Ormat TechnologiesORACosterNeutral$66.00$60.00SolarEdge TechnologiesSEDGStrouseOverweight$71.00$63.00SunPowerSPWRStrouseNeutral$9.50$7.00TerraForm PowerTERPStrouseOverweight$16.00$16.00TPI CompositesTPICCosterOverweight$37.00$34.00Source:J.P.Morgan.Within solar,our top pick is First Solar(FSLR).Alan Hon,J.P.Morgans Asia-based Utilities and Environment analyst,favors Overweight-rated LONGi(601012.CH).In November 2018 we published a report recommending FSLR and LONGi(see report),which highlighted the progress that thin film is making in terms of energy density(First Solar)and the progress that Mono is making in terms of cost/watt(LONGi).Stock PerformanceAlt Energy Stocks under coverage have posted positive returns YTD,mostly outperforming the S&P 500.Three of our top four picks have posted very strong returns:FSLR is up 58%,HASI is up 49%,and BE is up 30%.TPIC is up just 2%following the unexpected headwinds experienced in 1Q,underperforming the S&P 500 return of 19%.4North America Equity Research10 July 2019Paul Coster,CFA(1-212)622-Figure 1:Covered Solar Stock Indexed Performance,YTDSource:Bloomberg,J.P.Morgan.Year-on-year returns are more mixed:HASI and FSLR have outperformed y/y,but BE and TPIC are down y/y.Figure 2:Stocks under Coverage,Indexed Y/Y PerformanceSource:Bloomberg,J.P.Morgan.5North America Equity Research10 July 2019Paul Coster,CFA(1-212)622-Figure 3:YTD Stock Performance for Select Alternative Energy Stocks Source:Bloomberg.-69.0%-9.5%-3.5%1.5%12.6%17.7%19.9%20.3%20.7%21.2%21.2%29.8%31.4%33.6%40.3%42.8%51.1%52.6%54.3%56.5%57.8%77.4%82.0%88.4%124.5%149.9%-100.0%-50.0%0.0%50.0%100.0%150.0%Senvion SAGCL-Poly Energy HoldingsGuodian Technology&EnvironmentTPI CompositesRenesolaNextEra Energy PartnersS&P 500Ormat TechnologiesVestasAtlantica YieldAdvanced Energy IndustriesBloom EnergyPattern EnergyTerraForm PowerSiemens GamesaBrookfield Renewable PartnersCanadian SolarHannon ArmstrongLONGi Green Energy TechnologyGuggenheim Solar ETFFirst SolarSolarEdge TechnologiesSunrunNordex SEJinko SolarSunPowerEnphase Energy6North America Equity Research10 July 2019Paul Coster,CFA(1-212)622-Figure 4:Comp Table Source:J.P.Morgan,Bloomberg.Note:Prices as of 7/9/19 close.Trading multiples for selected comparable companies$in millions,except per share data and as indicatedNameJPM RatingAnalystPriceMkt CapEVP/EEV/RevenueEV/EBITDACY19ECY20ECY19ECY20ECY19ECY20EChina-based Solar DevCosCanadian SolarNeutralStrouse21.67$1,288$3,2389.4x7.8x0.9x0.8x7.9x7.1xJinko SolarNCN/A22.22$964$3,27811.5x9.8x0.8x0.7x10.8x9.6xLONGi Green EnergyOverweightHon21.67$11,399$11,173nmnm2.5x1.8x13.0 x9.9xChina Solar DevCos Mean10.5x8.8x1.4x1.1x10.6x8.8xChina Solar DevCos Median10.5x8.8x0.9x0.8x10.8x9.6xNorth American-based Solar DevCosFirst SolarOverweightCoster66.99$7,058$5,65627.4x18.0 x1.6x1.7x11.1x7.8xSunPowerNeutralStrouse12.42$1,768$2,612nmnm1.3x1.2xnm14.9xNorth American Solar DevCos Mean27.4xnm1.5x1.5x11.1x11.3xNorth American Solar DevCos Median27.4xnm1.5x1.5x11.1x11.3xInvertersSolarEdgeOverweightStrouse62.27$2,961$2,69320.7x17.7x2.2x2.0 x13.7x11.6xEnphase EnergyNCN/A20.38$2,246$2,24741.7x26.8x4.6x3.7x29.7x19.5xABB Ltd.UnderweightWilli18.69$40,523$47,19917.5x14.5x1.6x1.6x13.7x11.2xSMA Solar Technology AGNCN/A21.10$948$506nmnm0.5x0.5x11.1x7.3xInverters Mean26.6x19.7x2.2x1.9x17.1x12.4xInverters Median20.7x17.7x1.9x1.8x13.7x11.4xYieldCo/Total ReturnTerraForm PowerOverweightStrouse14.56$3,045$9,412nmnm9.3x9.1x12.4x12.2xHannon ArmstrongOverweightStrouse28.36$1,811$2,99820.4x19.7xnmnm24.2x21.5xBrookfield Renewable PartnersNCN/A46.80$10,998$30,851nmnmnmnm14.7x14.7xPattern EnergyNeutralTurnure23.57$2,316$5,752nm48.4xnm10.0 x15.7x14.5xNextEra Energy PartnersNeutralTurnure49.58$2,784$9,66638.1x27.3x8.1x6.4x8.7x7.5xAtlantica YieldNCN/A22.89$2,295$7,30826.3x16.4x6.4x5.8x8.5x7.5xYieldCo Mean28.3x27.9x7.9x7.8x14.0 x13.0 xYieldCo Median26.3x23.5x8.1x7.8x13.5x13.3xSolar IPPSunrunNCN/A19.81$2,281$4,196nmnm5.0 x4.5xnmnmSolar IPP Meannmnm5.0 x4.5xnmnmSolar IPP Mediannmnm5.0 x4.5xnmnmAsia-based Renewables IPPChina LongyuanNCN/A5.16$5,310$19,10555.0 x49.4x4.4x4.2x6.8x6.3xHuaneng RenewablesNCN/A2.22$3,004$10,95240.8x36.7x5.6x5.1x6.4x5.8xChina Datang RenewablesNCN/A0.78$726$8,94125.3x22.3x6.4x5.9x7.4x6.7xAsia-based Renewabless IPP Mean40.4x36.1x5.5x5.1x6.9x6.3xAsia-based Renewabless IPP Median40.8x36.7x5.6x5.1x6.8x6.3xWind OEMsVestasUnderweightGupta586.60$17,522$15,720nmnm1.2x1.1x8.9x7.8xSiemens GamesaUnderweightGupta14.90$11,376$11,98916.2x12.4x1.0 x0.9x8.3x7.6xSenvionOverweightGupta0.68$56$332na2.0 x0.1x0.1x2.8x2.0 xNordexNCN/A14.29$1,553$1,829nm24.7x0.5x0.5x11.3x7.1xWind OEM Mean16.2x13.0 x0.5x0.5x7.5x5.5xWind OEM Median16.2x12.4x0.5x0.5x8.3x7.1xOverall Mean26.9x22.1x3.2x3.2x11.8x10.0 xOverall Median25.3x18.9x1.9x1.8x11.1x7.8x7North America Equity Research10 July 2019Paul Coster,CFA(1-212)622-Bloom EnergyOverweightCompany DataShares O/S(mn)15952-week range($)38.00-8.88Market cap($mn)2,054.88Exchange rate 1.00Free float(%)80.3%3M-Avg daily vol(mn)1.383M-Avg daily val($mn)17.1Volatility(90 Day)61Index RUSSELL 2000BBG BUY|HOLD|SELL 5|4|0Bloom Energy Corporation(BE;BE US)Year-end Dec($)FY18AFY19EFY20EFY21ERevenue($mn)7428781,1421,469Adj.EBITDA($mn)6978210270EBITDA margin 9.3%8.9%18.4%18.4%A income($mn)(60)(45)87126Adj.EPS($)(0.62)(0.39)0.710.99BBG EPS($)(0.72)(0.56)0.210.79Reported EPS($)(2.48)(2.32)(0.60)0.01DPS($)-Dividend yield-Adj.P/E NMNM18.213.1Source:Company data,Bloomberg,J.P.Morgan estimates.We maintain our Overweight rating ahead of BEs 2Q results.The stock has also outperformed YTD,up 30%,and we expect the management narrative to remain constructive,particularly regarding 2H19 and into FY20 ahead of the Gen 7.5 server availability.Backlog,above all else,provides us with confidence that demand is strong,aided by the recently announced partnership with Duke Energy,justifying managements outlook for a return to above 25%revenue growth and over 25%gross margin in 2H19.We are establishing a Dec 2020 price target of$33 from a Dec 2019 price target of$30.We look for 2Q PF EBITDA of$13mm on revenue of$204mm(Street:$12mm/$208mm).We look for Acceptances of 265(guidance of 250-280)and PF gross margin of 21.5%.We estimate an ASP of$6,200/kW and total installed system cost of$5,025/kW versus guidance of$6,050-6,350/kW and$4,875-5,175/kW,respectively.We expect 3Q19 guidance to align with our expectations.We look for 3Q Acceptances of 315,up 53%y/y.We estimate an ASP of$5,385/kW and a total installed system cost of$4,300/kW.Recall that Bloom looks for revenue growth to jump to above 25%y/y in 2H as the firm delivers on known backlog at known(flattish)ASPs and the mix shifts away from Korea.The company looks for gross margins to jump to above 25%.We believe investors should be in the stock ahead of this inflection.Investment Thesis,Valuation and RisksBloom Energy Corporation(Overweight;Price Target:$33.00)Investment Thesis At 28x CY19E EV/EBITDA(JPM),the multiple for this stock in our view only partly expresses future earnings power;roll forward one year and the stock is trading at a more interesting 10 x CY20E EV/EBITDA.A discounted approach to future-dated earnings or cash flows suggests to us the stock is undervalued.ValuationWe are establishing a Dec 2020 price target of$33 from a Dec 2019 price target of$30.00 based on a discounted forward EV/EBITDA valuation approach.We assume 30%annual revenue growth through 2023,implying FY23E revenue of 8North America Equity Research10 July 2019Paul Coster,CFA(1-212)622-$2.5bn.We assume PF operating margins of 14.5%,within the companys long-term target range of 13-15%,implying$460mm in PF EBITDA.We assign a 16x EV/EBITDA multiple to 2023E EBITDA,a premium multiple justified in our view by BEs growth opportunity,then discount back three years to YE20E using a discount rate of 10%,computing a$33 per share valuation based on 159 million shares.Table 2:Price Target DerivationSource:J.P.Morgan estimates.Risks to Rating and Price TargetExecution risk.The company has a lot to do in the next two to three years to scale up,commercialize the Generation 7 servers,extend FRU life,and expand sales capability.Execution risk could increase as the company goes international.Resource constraints.Blooms principal execution challenge relates to its ability to attract talent necessary to scale the business.The firm will need to build an indirect sales channel over time,but doing so could weigh on corporate gross margins.Government policy support could be withdrawn.The ITC expires in 2022 but could conceivably be withdrawn earlier.Also PUCs could oppose the introduction of DG resources if they believe they are de-stabilizing the grid.Gas costs could escalate,weighing on ASP/kWh relative to expectations.Gas supply could be disrupted in some locations.Gas infrastructure,including delivery systems,may not expand to Blooms target end markets.Competition could intensify.Bloom faces competition from other fuel cell companies,such as Fuel Cell Technologies and Doosan,and from traditional gas turbine companies,which may lower costs in response to Blooms products.Stock-based compensation,dual-class shares.Stock-based compensation is very elevated for the next three years,which could be more dilutive to earnings than anticipated.Also class B shares carry 10-to-1 voting rights compared to 1-to-1 for Class A.Class B shares,representing 88%of the total outstanding,represent 98%of the voting power of the company.Therefore,Class A shareholders may be at risk if Class B holders do not act on behalf of all shareholders.2023Revenue$2,483EBITDA$460EV/EBITDA16x2022 EV$