First Berlin – TubeSolar AG Research Update (30/09/2021)

First Berlin Equity Research has published a research update on TubeSolar AG (ISIN: DE000A2PXQD4). Analyst Dr. Karsten von Blumenthal reiterated his BUY rating and decreased the price target from EUR 7.70 to EUR 7.50.

The strategic cooperation recently agreed with Ascent Solar (ASTI) secures TubeSolar's long-term supply of large volumes of thin-film photovoltaic foils for its glass tube modules. It includes the establishment of a joint production facility in Germany in a joint venture (Tubesolar share: 30%, Ascent Solar: 70%) as well as a cooperation for the development of CIGS perovskite tandem solar cells. These cells are characterised by high efficiency and low production costs and therefore have disruptive potential in the solar industry, as the market-leading monocrystalline silicon cells are getting closer and closer to their practical maximum efficiency. Following TubeSolar's $2.5m investment in ASTI in January, the collaboration agreement provides the basis for a secure second source of PV foil supply alongside its existing European supplier. In the first half of the year, as expected, TubeSolar has not yet generated any revenues and has posted a net loss of €1.2m. Following the delay in module certification, we have pushed back our investment and financing plan somewhat. We have also incorporated the expected investment costs for setting up the joint venture with Ascent Solar into the model. An updated DCF model yields a price target of €7.50 (previously: €7.70). We confirm our Buy recommendation.