First Berlin – Energiekontor AG Research Update (19/05/2020)

First Berlin Equity Research has published a research update on Energiekontor AG (ISIN: DE0005313506). Analyst Dr. Karsten von Blumenthal reiterated his BUY rating and maintained his EUR 26.30 price target.

Abstract
On 15 May, Energiekontor published its interim status report for Q1/20, which gives a qualitative update on business development. Project business is well on track. Highlights were the commissioning of the 13.5 MW Waldfeucht wind farm in January as well as the sale of three solar parks (13.3 MW) and the conclusion of a PPA for a 41.5 MW solar park with Engie in May. Good wind conditions in Q1 resulted in above average wind yields for Energiekontor's 287 MW green power plant portfolio. The company has adjusted well to restrictions caused by the pandemic. So far, we do not see any material impact of the pandemic or the recession on Energiekontor's business. We note that its business model is very stable, as power generation cash flows only depend on wind conditions and solar radiation, and green power assets remain in high demand despite the pandemic and recession. As many projects are scheduled to be completed this summer at the latest, even delays of some weeks will not prevent commissioning this year. The company reiterated guidance (double-digit million EBT). We stick to our 2020 EBT forecast of €20m. An updated sum-of-the-parts valuation still yields a €26.30 price target. We confirm our Buy recommendation.