PAS med oppdatering i dag. Kursmål kr 27:

The sunrise is getting closer REC Silicon is edging closer to restart, with activities reportedly going according to plan. Bond refinancing is out of the way removing another risk-factor. Financing of capex and operational restart costs remains the last meaningful hurdle, with offtake at premium prices already in place. We remain bullish, arguing that valuation fails to reflect the positive outlook. Buy, TP NOK 27 reiterated.
2023 will be a transitional year... REC Silicon's P&L in H1'23 will be soft, with the company fighting inventory and consequently lower demand at semiconductors customers both for silicon gases and EG poly. Price increases will come to offset higher cost at RECSI's end, so H2'23 should be better. For Q1'23, we foresee USD 25m in revenues and LBITDA of USD 20m.
...before 2024 and onwards will mark the start of a new RECSI era... Moses Lake restart activities are reportedly going well and according to plan, scheduled for "first" production during late 2023. More comments on this, the recent refinancing of USD 110m bond and restart financing should be the focus at the Q1'23 report 11 May. Our estimates still reflect a USD 120m equity raise, although the company prefers non-dilutive instruments. The refinancing, where the company got USD 110m in bank debt form KEB Hana Bank, is said to have favorable terms compared other financing alternatives. With the bond trading at Par at the time, we believe rates are lower than the 11.5% coupon at the old bond. We remain bullish on the future, making small estimate changes ahead of the report (primarily 2023E revisions). Polysilicon prices are holding up well despite more supply enters the market, underpinning strong demand. The US PV market is expected to grow with a CAGR of ~20% towards 2027 (avg. of ~40 GW annual installments) but for the nation to reach is 30x30 target an average 70 GW of annual installments are needed by 2030 (compared to an installed base of 135 GW). Understandably, demand should be stellar, helped by the IRA. RECSI's EBITDA guiding at full capacity reflects ASP between USD 14-27/kg for the lower and upper of USD 100m and 300m, respectively, on our estimates. Current polysilicon prices would yield USD ~260m in 2025 EBITDA.
...which is not reflected in valuation Current market valuation is too pessimistic in our view. It trades at 4.1x our 2025E EV/EBITDA (incl. dilution from a USD 120m equity raise), and 3.3x using current polysilicon prices. Way too low for a company benefitting from green megatrends and offtake contracts at premium prices in place. Add the fact that there are expansion opportunities in Moses Lake, a potentially more lucrative silicon-anode battery market to exploit, as well as a re-evaluation of the Yulin JV set for expansion (currently zero valued carried), there is further upside beyond our base case. Buy, TP NOK 27.