First Berlin – PNE AG Research Update (13/03/2019)

First Berlin Equity Research has published a research update on PNE AG (ISIN: DE000A0JBPG2). Analyst Dr. Karsten von Blumenthal reiterated his BUY rating and maintained his EUR 3.60 price target.

PNE reported preliminary EBIT of €7.8m. This is below our forecast (€12.6m) and guidance (€10-16m). The reason for this is a €10.8m valuation adjustment on three offshore wind farm projects. However, disregarding this non-cash one-off, PNE exceeded its guidance with EBITDA of €27.2m and EBIT of €18.5m. We expect a weak German onshore wind market this year due to slow approval procedures. However, we expect this to change later in 2019 and envisage a much stronger German market in 2020E, supported by the first supplementary onshore wind tenders in September and December 2019. As the German coal commission has decided to exit coal by 2038 we see additional medium and long-term potential for onshore and offshore wind. PNE has further internationalised its business with its market entry in Latin America and strengthened its service segment through two acquisitions in Germany. The company has a strong balance sheet, enormous global business opportunities in the renewable energy market, and is attractively valued. We expect the current negative sentiment to change soon and see the current share price level as a very good investment opportunity. Our rating remains Buy at an unchanged price target of €3.60.