可替代能源：调整COVID-19的近期预期

1、Alternative EnergyAdjusting Near-Term Estimates for COVID-19North America Equity Research27 March 2020COVID-19 containment is retarding residential solar deployments, where sales and installation cycles are short and field personnel meet customers face to face. C&I projects are also slowing, but uti

2、lity-scale solar and wind have solid momentum heading into the summer owing to long installation cycles. Over the long term, increasingly favorable unit economics and growing interest in energy resilience and independence will drive renewables-plus-storage growth beyond the COVID-19 slowdown, asset-

3、 backed finance should remain accessible to much of the industry, and sidelined ESG investors should return to renewables as quickly as they departed on the oil shock. In the short term it might be safer to focus on utility-scale solar and wind (FSLR, CSIQ, TPIC), but DG-solar stocks look attractive

4、ly valued relative to growth (e.g., SEDG and ENPH), or they are trading at or below the NAV of their customer portfolios (e.g., RUN and NOVA). We recommend long-term investors build positions across the sector during the COVID-19 slump because we do not foresee lasting damage to the Alt Energy growt

5、h theme. Based on recent news and interactions with many management teams we provide status updates for many of the stocks under coverage, and we are adjusting some estimates.Social distancing may weigh on resi solar deployments. Distributed solar is a short-cycle business, and door-to-door sales ac

6、tivity could be negatively impacted by social distancing. We understand that, so far, solar installations are deemed essential in some states with mandated stay-at-home policies (e.g., California), which should provide some buffer for companies to deploy existing backlog, though replenishment of tha

7、t backlog may be strained by lower new sales and some permitting delays. The Solar Energy Industries Association (SEIA) has warned that COVID-19 could cause the industry to lose up to half of its 250k person workforce as a result.IT Hardware, Alternative Energy Paul Coster, CFA AC(1-212) 622-6425 HY

8、PERLINK mailto:paul.coster paul.costerBloomberg JPMA COSTER Mark Strouse, CFA(1-212) 622-8244 HYPERLINK mailto:mark.w.strouse mark.w.strousePaul J Chung(1-212) 622-5552 HYPERLINK mailto:paul.j.chung paul.j.chungJ.P. Morgan Securities LLCEquity Ratings and Price TargetsCompanyTickerMkt Cap ($ mn)Pric

9、e ($) Rati Curng PrevCur Price TargetEndPrev DateEnd DateBloom EnergyBE US905.075.58OWn/c14.00Dec-20n/cn/cCanadian SolarCSIQ US1,052.2917.42Nn/c22.00Dec-20n/cn/cEnphase EnergyENPH US4,437.9836.19OWn/c49.00Dec-2051.00n/cFirst Solar, IncFSLR US3,996.2637.62OWn/c76.00Dec-20n/cn/cHannon ArmstrongHASI US

10、1,409.5620.82OWn/c37.00Dec-2042.00n/cOrmat TechnologiesORA US3,427.5766.77Nn/c74.00Dec-20n/cn/cSolarEdge TechnologiesSEDG US4,770.4590.45OWn/c133.00Dec-20141.00n/cSunnovaNOVA US1,059.0012.61OWn/c18.00Dec-2022.00n/cSunPower CorporationSPWR US1,008.066.38Nn/c10.00Dec-2012.00n/cSunrun Inc.RUN US1,541.9

11、312.38OWn/c21.00Dec-2025.00n/cTerraForm Power, Inc.TERP US3,608.2916.00Nn/c16.00Dec-2015.00n/cTPI CompositesTPIC US500.6914.28Nn/c24.00Dec-20n/cn/cSource: Company data, Bloomberg, J.P. Morgan estimates. n/c = no change. All prices as of 26 Mar 20.See page 45 for analyst certification and important d

12、isclosures.J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in

13、 making their investment decision. HYPERLINK / Paul Coster, CFA (1-212) 622-6425 HYPERLINK mailto:paul.coster paul.costerNorth America Equity Research27 March 2020But resi solar portfolios look relatively un-impacted. Resi solar leases provide home owners savings of 10-20% on average compared to the

14、ir local utility, which we believe should make lease payments a relatively high priority for lessees. In its latest presentation, RUN provided detail on customer defaults dating back to the 2008/09 recession, with losses consistently hovering around just 1%. Note that NOVAs and RUNs portfolio of ass

15、ets have a value of $13.50 and $12 per share using a 6% discount rate, which we believe should provide downside support for these stocks.Utility-scale projects are still proceeding. Utility-scale solar, typically deployed in remote locations, has long deployment cycles and is unlikely to be much imp

16、acted by COVID-19 from a labor perspective. Jinko (JKS/not covered) stated that COVID-19 had no material impact on operations, 400- 500MW of panel production slipped from 1Q to 2Q, and the firm reiterated 2020 shipment guidance and capacity expansion plans. Canadian Solar (CSIQ/N) has also seen a qu

17、ick recovery in operations, and management indicated that it has not seen any disruption in its utility-scale deployments.Capital markets disruption possible. To the extent that COVID-19 weighs on corporate profits, the lower tax burden by some industry participants may result in reduced tax equity

18、market activity. Also, some covered companies have noted their view that access to the unsecured corporate debt market is closed. Other avenues remain available, including life insurance funds (HASI) and commercial ABS (RUN, NOVA). While rates on US treasuries have declined since February, ABS sprea

19、ds may widen, potentially negatively impacting profitability for resi solar installers.Balance sheets in good shape generally. Five companies under coverage have net cash positions on their balance sheets (ENPH, FSLR, NOVA, SEDG, RUN). Only BE and ORA have material recourse debt maturities in 2020.

20、Since 4Q19, BE has been in active discussions to refinance $289mm of convertible debt that is due in December 2020 and expects a resolution during 1H. We also expect ORA to be able to address its 2020 debt maturity of $167mm due to its strong cash from operations and relatively low recourse debt rat

21、io (1.5x).We recently touched base with several companies under coverage. See below for our key takeaways.Takeaways from conversations with covered companiesBloom Energy (BE/OW) BEs stock has declined 39% since 3/6. The company reported 4Q results on 3/16. BE closed out 2019 with an encouraging 4Q p

22、rint but issued weaker than expected 1Q guidance, notwithstanding strong bookings momentum and record backlog. Management tone was constructive regarding 2020 prospects, citing 2H19 order momentum, though a bit difficult to reconcile with both the lackluster guide and downside risks facing to instal

23、lation activity owing to COVID-19. The stock looks positioned as a potentially exciting second half story.Within our Alt Energy coverage, BE has the highest net debt/EBITDA ratio at over 4x (net recourse debt excluding restricted cash). BE has been in active discussions since 4Q19 to refinance $289m

24、m of convertible debt that is due in December 2020 and expects a resolution during 1H. We are leaving our estimates unchanged. Our price target remains $14.Canadian Solar (CSIQ/N/Strouse) CSIQs stock has declined 14% since 3/6. The company reported 4Q results on 3/26. 4Q results and 1Q guidance were

25、 strong, though the company issued FY20 revenue guidance that was below consensus and the range was wider than usual, reflecting uncertainty from COVID-19. CSIQ began to see some delays and weakening in demand over the past few days, and it anticipates a greater impact to residential and C&I demand

26、in the US and Europe.We believe CSIQ is well positioned to weather a prolonged downturn owing to a net debt/EBITDA ratio of just 1.7x and no significant debt maturities in FY20. Our price target is $22.Enphase Energy (ENPH/OW/Strouse) ENPHs stock has declined 32% since 3/6. The company did not exper

27、ience any change in customer behavior until the weekend of 3/14 and Californias shelter-in-place order on 3/16. ENPH expects a significant impact to demand in CA, NY, and NJ. ENPH is considered an essential service in CA, so installation activity can proceed, though permitting can be impacted in cer

28、tain jurisdictions where agencies are closed, and door-to-door sales activity for installers is “not existent.” Encouragingly, other regions are still going strong (Texas, southeast US). We also expect the companys planned expansion in Europe, detailed at the December Analyst Day, will be temporaril

29、y pushed back. On a positive note, ENPH (and SEDG) enjoy healthy balance sheets with net cash positions, which could lead to market share gains vs. competitors that arent well capitalized in the event of a prolonged downturn (industry standard is a 25-year product warranty).ENPHs expense base is hig

30、hly variable owing to outsourced manufacturing, so the company expects gross margins to be stable. The company can also flex opex as needed, and ENPH expects to remains cash flow positive under most scenarios.We are trimming our near-term estimates but leave FY21 largely unchanged. Our price target

31、goes to $49 from $51. See below for more details.First Solar (FSLR/OW) FSLRs stock has declined 13% since 3/6. We believe FSLRs utility-scale driven business model will likely prove relatively more resilient than those focused on resi/C&I, assuming the COVID-19 disruption proves temporary. There may

32、 be some risks from nationwide shutdowns in regions where FSLR manufactures (e.g., Ohio, Malaysia, Vietnam), though the company announced on 3/26 that its facilities are deemed essential and therefore remain operational.We are leaving our estimates unchanged. Our price target remains $76.Hannon Arms

33、trong (HASI/OW/Strouse) HASIs stock has declined 42% since 3/6. The company believes the weakness is attributed to 1) declines in REIT indexes as well as liquidation of a UBS trust that owned HASI shares, 2) investor expectations for a slowdown in resi solar, and 3) declines in oil prices. We believ

34、e the sell-off is overdone as HASIs business is significantly different than other REITS (e.g., hotel REITS), resi solar is a relatively small portion of the pipeline, and HASIs business has a low fundamental correlation with oil prices.HASI has historically funded its transactions using equity, cor

35、porate unsecured debt, and life insurance debt markets. Management noted that the corporate unsecured debt market is effectively closed for the time being. Given the stocks decline, we believe it is also unlikely that the company taps the equity market. We therefore expect a higher mix of life insur

36、ance debt market deals near term, which could result in a higher mix of securitizations than portfolio transactions, buoying near-term estimates though at the expense of less longer term visibility.We are adjusting our near-term estimates to factor in a potential for lower transaction volume. Our FY

37、21 estimates are largely unchanged. Our price target goes to $37 from $42. See below for details.Ormat Technologies (ORA/N) ORAs stock has declined 6% since 3/6. ORA believes that its Electricity segment revenue (75% of total) is immune to near-term impact from COVID-19 owing to long-term fixed cont

38、racts, with limited curtailment risk. A longer term risk could arise if failures or major operation events occur and the company does not have materials/equipment to provide an immediate repair.The Product business (20% of revenue) could be impacted by raw material shortages or by travel restriction

39、s that delay project startups.We are trimming our near-term Product segment estimates, though we leave estimates for the core Electricity segment unchanged. Our price target remains $74. See below for more details.SolarEdge Technologies (SEDG/OW/Strouse) SEDGs stock has declined 32% since 3/6. SEDG

40、has no supply issues resulting from COVID-19, and we therefore believe that the company will be able to achieve 1Q guidance. Also, recall that at the time of the 4Q call in February, SEDG had 70% visibility into 2Q from already booked orders. The company has said that it is not seeing any material o

41、rder cancellations, so we believe visibility into 2Q remains strong as well. That said, while installation activity remains fairly buoyant, we believe new sales activity for installers has been impacted by COVID-19, which may lead to a slowdown in SEDG revenue in late 2Q or 3Q. Encouragingly, SEDG i

42、s more diversified than its peerswith 40-50% of revenue derived outside the US and with 40-50% of revenue in C&I, which has thus far proven more resilient than residential sales.We are trimming our near-term estimates but leave FY21 largely unchanged. Our price target goes to $133 from $141. See bel

43、ow for more details.Sunnova (NOVA/OW) NOVAs stock has declined 30% since 3/6. We believe near-term installation activity should be rather immune to impacts from COVID-19, though sales activity could be limited, particularly door-to-door sales. We believe NOVAs leasing business model will be better p

44、ositioned than cash sale models in the event of a prolonged downturn as customers can save on electricity bills with no money down.We believe NOVA has financing in place to satisfy installations through FY20. We also note that the companys reliance on independent dealers should provide more flexibil

45、ity for expenses in the event of a dip in demand.We note that the company has $13.50 per share in total net earning assets previously deployed, which should provide support for the stock, in our view. Finally, we note that NOVAs CEO is buying shares, purchasing $110k on 3/17.We are trimming our esti

46、mates accordingly. Our price target goes to $18 from $22. See below for more details.SunPower Corporation (SPWR/N/Strouse) SPWRs stock has declined 25% since 3/6. The company does not expect a material impact to 1Q results from COVID-19, though we sense that 2Q/3Q estimates could be at risk owing to

47、 expected dips in demand for US residential/C&I systems as well as the nationwide shutdown in Malaysia (A-series/Maxeon capacity). On 3/25, the company withdrew its FY20 guidance owing to COVID-19 uncertainty and has implemented cost saving measures and capex reductions expected to save $50mm in FY2

48、0.We are trimming our estimates accordingly. Our price target goes to $10 from $12. See below for more details.Sunrun (RUN/OW/Strouse) RUNs stock has declined 39% since 3/6. We believe near-term installation activity should be buoyed by RUNs elevated backlog, though replenishment of that backlog cou

49、ld be at risk owing to limitations on in-person sales activities. We believe RUN is relatively better positioned than most competitors owing to less door-to-door sales activity (we believe 10% of deals), and the company is transitioning field sales toward phone/video. We also believe RUNs leasing bu

50、siness model will be better positioned than cash sale models in the event of a prolonged downturn as customers can save on electricity bills with no money down.RUN has tax equity and committed debt capacity in place to satisfy installations into 4Q20 (or longer if MW growth doesnt meet the targeted

51、15%). We also note that the companys sales staff is mostly on commission and installers are paid per install, so expenses should decline in the event of a dip in demand.Finally, we note that the company has $12 per share in total net earning assets previously deployed, which should provide support f

52、or the stock, in our view.We are trimming our estimates accordingly. Our price target goes to $21 from $25. See below for more details.TerraForm Power (TERP/N/Strouse) TERPs stock has declined 19% since 3/6. The company reported 4Q results on 3/17. The pending takeover by Brookfield remains on track

53、 to close during 3Q. Our price target goes to $16 from $15 based on the implied deal price implied by the stock price of Brookfield (BEP/NC).TPI Composites (TPIC/N) TPICs stock has declined 34% since 3/6. We do not see significant downside risks to near-term estimates from COVID-19. We believe that

54、near-term deliveries for OEM projects, which are firm and already financed, should proceed as OEMs generally work around shelter-in-place policies. That said, there could be some risk to TPIC if delays in other areas of OEM supply chains result in project delays. There also may be longer term risk i

55、f COVID-19 postpones future projects, which likely wouldnt impact TPIC until FY21. Recall that TPIC has$5.2bn in revenue visibility through FY23, which we believe should provide some comfort for investors during the current downturn. Our price target remains $24.Table 1: Summary of Earnings and Pric

56、e Target ChangesCompanyEstimate ActionRationalePrior PTNew PT% ChangeBENo changeProximity to earnings call$14$140%CSIQNo changeProximity to earnings call$22$220%ENPHLowerExpected lower US resi sales$51$49-4%FSLRNo changeVisibility into utility-scale orders$76$760%HASILowerExpected lower 2020 transac

57、tions$42$37-12%ORALowerNo expected impact to Electricity segment$74$740%NOVALowerExpected lower US resi sales$22$18-18%RUNLowerExpected lower US resi sales$25$21-16%SEDGLowerExpected lower US/Europe sales$141$133-6%SPWRLowerExpected lower US resi/C&I sales$12$10-17%TERPNo changeProximity to earnings

58、 call$15$167%TPICNo changeVisibility into near-term OEM projects$24$240%Source: J.P. Morgan.Figure 1: Alt Energy Companies Had Outperformed the Market Through Early MarchSource: Bloomberg, J.P. Morgan. Prices as of 3/3/20.Figure 2: Alt Energy Stocks Have Significantly Underperformed Since Early Marc

59、h and Are Now Underperforming YTD% YTD Return38.5%13.0%5.3%-4.9%-4.9%-7.3%-9.3%-10.2%-10.4%-11.8%-12.7%-14.5%-15.9%-17.1%-18.2%-19.6%-19.7%-21.2%-22.5%-22.9%-23.1%-25.3%-32.8%-35.3%-38.0%Enphase EnergySunnova TerraForm Power SolarEdge TechnologiesLONGi Green Energy Technology Brookfield Renewable Pa

60、rtnersSiemens Gamesa Ormat TechnologiesSunrun Guggenheim Solar ETFRenesola Guodian Technology & Environment GCL-Poly Energy HoldingsVestas SunPowerNextEra Energy PartnersS&P 500Canadian Solar Advanced Energy IndustriesTPI CompositesJinko Solar Bloom Energy First SolarHannon ArmstrongNordex SE-50.0%-