Dagens resultatfremleggelse ble ikke en fest slik noen har tatt til orde for. Det ble derimot betydelige nedskrivinger, og nesten 10 MUSD i negativ EBITDA. SB1M er ute med en oppdatering nå i kveld, hvor de blant annet skriver følgende:

REC (Sell tp NOK0.7): Still too many negative triggers - stay away

Conclusion
We reiterate our Sell recommendation and reduce our target price to NOK0.7/share from NOK0.8/share due to increased cash cost guidance. REC reported Q2 2018 EBITDA of USD-9.7m, which was below our estimated USD2.9m due to higher costs related to inventory write-downs and slightly higher cost of materials. The company increased cash cost guidance to USD15.9/kg and 15.2/kg for Q3 and Q4 2018 respectively, up from previously guided USD11-12/kg. We argue the rest of 2018 looks challenging with the current polysilicon spot price of USD11/kg vs cash cost >USD15/kg. In addition, we see several negative triggers that may lead to an equity issue near-term and we question how long Butte will continue to deliver 70% EBITDA margins on the silane gas business.

Our analysis
Weaker guidance following the reduction to 25% capacity. REC guides on a cash cost of USD15.9/kg and USD15.2/kg in Q3 and Q4 2018 following the reduction in production to 25% of capacity. Compared to the current polysilicon price of USD11/kg (and falling), the remainder of 2018 looks challenging. REC had a cash position of US42m at the end of Q2 18 and with the potential payments of USD31m for a tax claim, USD25m for the indemnity loan, and USD18m reversal of working capital, we argue that an equity issue should be base case.

Yulin is a long-term competitor to Butte, which may drive down margins. The sale of silane gas from Butte is currently keeping REC afloat with an annual EBITDA contribution of USD73m and 70% EBITDA margins on our estimates. However, the total silane gas market is approximately 5,200MT per annum, and we are worried that Yulin will sell more than the planned 500MT (it has capacity to produce 22,000mt per annum), which would significantly reduce the EBITDA contribution from Butte.

Valuation. Our target price of NOK0.7 per share is based on a SOTP valuation of NOK0.58-0.67 per share. Butte is valued at an EV/EBITDA of 6.0x, which have significant downside potential if Yulin starts competition in the silane gas market the next 2-3 years. Based on an EV/EBITDA of 4.0X, our SOTP becomes NOK0.3 per share.

Analysts
Jonas Meyer"