Carnegie Investment Bank
Midsummer
Date Title Alternative
2024-05-03 Revenues still low but good cost control Download | Show Close
2024-03-04 Production expansion on the cards Download | Show Close
2024-02-15 Reinstating coverage with new fair value following rights issue Show Close
2022-11-17 Journey towards increased production continues Show Close
Research | 17 Nov 2022 | Midsummer

Journey towards increased production continues

 

Persistent strong demand

Midsummer reported sales of SEK 16.0m in Q3 22, significantly below last year (60.3m). EBIT also fell to SEK -41.2m compared to SEK -15.0 in Q3 21. The primary reason is significantly lower revenues from Production Equipment, as no machines were sold to external customers during the quarter. Order intake for solar cell roofs, the main value driver, increased by 63% to SEK 37.8m.

Journey towards increased production continues

Midsummer now produces machines for use in its own production, which will lower revenues from machine sales in the short term but increase production capacity for recurring revenues from solar cell roofs further out. In addition to the capacity build-up in Italy of 50 MW (compared to current capacity of 2 MW), the company now has plans to expand capacity in Sweden, by 20 MW in the first phase. The company is working with various financing options for these capacity boosts. We believe Midsummer will succeed in finding attractive financing considering the strong underlying demand combined with the company’s attractive product portfolio and the large capital supply for green investments.

 

We retain our fair value but adjust estimates

We have adjusted our estimates for the Italian capacity increase to reflect a swifter upturn in costs and revenues. This is offset by more favorable financing terms from the Italian government than in our previous model, which support the balance sheet and cash flow. We retain our fair value of SEK 18-20, where higher revenues are offset by a temporarily higher WACC due to financing activities. Uncertainty related to the timing of costs and revenues in the near term remains high, but long-term Midsummer is on the way towards establishing itself as the major European producer of solar cells and is now targeting capacity of 1,000 MW per year by 2030.

 

Download (EN)
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