SB1M er ute med en oppdatering på REC i forkant av kommende G20-møte hvor også handelskrigen mellom USA og Kina vil bli drøftet. SB1M mener det er dårlig risk/reward å sitte short over dette møtet, og har derfor tatt REC opp til nøytral:

"REC (Neutral tp NOK0.4): Neutral ahead of G20

Conclusion
We upgrade our recommendation on REC to Neutral from Sell ahead of the G20 meeting on November 30, 2018. President Trump and Xi Jinping plans to discuss the future trade balance of the two countries, and although the chances are slim for a solution to the solar power trade war, we believe the recent drop in share price provides an unattractive risk/reward of being short over the coming week. Our market view is unchanged, we make no estimate changes, and at current depressed polysilicon prices, REC is out of cash in approximately 4-5 quarters. If China removes import tariffs and the company is able to scale up production at Moses Lake to 100% of capacity, we value REC at c.NOK1.5/share.

Our analysis
The G20 meeting on November 30, 2018. President Trump and his Chinese counterpart Xi Jinping will meet at the G20 meeting in Buenos Aires to discuss the future trade relation between the two countries. Markets reacted positively earlier this month when Trump tweeted that talks were “moving along nicely”, but it soon bounced back down after the APEC meeting resulted in the leaders for the first time being unable to reach a formal declaration due to the differenced between US and China over global trade rules. Vice-president Mike Pence said that the President is prepared to more than double tariffs and last week a trade representative from the White House said that he expected there to be a direct confrontation between the two countries at the G20 meeting. In sum, we do not believe there will be a solution, but have no high conviction on the matter. After all the US managed to reach a revised agreement with Mexico and Canada earlier.

Valuation. We do not make any estimate changes based on possible political outcomes. However, if China reduce import tariffs on polysilicon and REC increase production at Moses Lake to 100% of capacity (18,000MT), we believe the plant can generate approximately USD30m in the current market (USD9.56/kg) and USD90m at newbuild parity (USD13/kg). Thus, if there is a solution we value REC at c.NOK1.5/share. On the negative side, we see a need for external financing within 12-15months if the market remain as today with potential earlier triggers in the tax case and indemnity loan.

In sum. We will know the outcome of a potentially positive trigger of a trade war solution during the next weeks, while the potentially negative triggers from running out of cash most likely will materialize in 2019. Thus, we believe the short-term risk/reward of a Sell recommendation is unattractive and upgrade to Neutral.

Analysts
Jonas Meyer"

I følge SB1M sin ukentlige shortrapport er det 267 mill aksjer utlånt til shorthandel. Ikke alle disse vil dekke inn pga en analyse fra ett meglerhus, men noen vil nok redusere risikoen frem mot det aktuelle møtet. Det kan (og jeg understreker KAN) derfor være en mulighet for å gjøre et klipp i REC den kommende tiden hvis noen av de som sitter short ønsker å redusere risikoen.