The Q3 2023 report was characterised by a clearly improved balance sheet. The large SOLT2 and SOLT3 bonds have now been fully repaid. The final outstanding bond, SOLT4 (about SEK 70m) has been extended until November 2024. The financing of this has been resolved via new issues totalling SEK 176m and bank financing in China. The latter reduces interest expenses thanks to lower credit margins and a generally lower level of interest rates. The company saw profits of SEK 4m during the quarter, versus accumulated losses of SEK -74m for H1 2023, owing to lower interest expenses. Solar radiation was lower y/y, leading to largely unchanged net sales, despite 13% larger installed solar cell capacity. We adjust our forecasts on account of the relatively weaker quarter and the revised number of shares.

Thanks to new financing, there is room for capacity expansion to take off in the coming years. The target is to increase installed capacity to 1,000 MW by the end of 2026, from 258 MW as of 9M 2023. ASAB’s model is scalable and not tied to a specific technology, but the entry barriers remain high on account of the particularly capital-intensive business model. Fixed tariffs on electricity spell stable revenues, while the capital-intensive nature of the business implies high margins, and long-term cash flow generation is thus both high and offers decent visibility.

Unchanged fair value