Gigasun reported an operationally stable Q4(23) report, with rolling 12M sales picking up after the relatively weaker Q3(23). Revenues from energy sales were 25% higher despite some currency headwinds (-2% Y/Y). This can be explained to some extent by energy purchased for resale. Revenues per KWh produced (adjusted for currency) were stable Q/Q. EBIT of SEK12m was stronger Y/Y, although on a rolling 12M basis it did not reach the some SEK80m level that the company had recently been reporting. Gigasun has flagged a strategic review of its capital structure as its balance sheet still hinders steadier cash flow and growth.

We make only marginal changes to our electricity sales estimates, largely prompted by the strengthening of the SEK against the RMB. We postpone the revenues from the introduction of emission rights to H2(24) and trim our forecasts for net financial items, which has a sizeable impact on EPS owing to the higher interest rates than previously anticipated. Our 2025 forecasts remain conservative, based on marginal capital raises in the debt market. Should the company succeed in lifting its capital base, its growth prospects would increase significantly. Availability of capital remains the largest barrier to growth in the capital-intensive power generation industry. The market for CCERs (China certified emission reductions) restarted in January, according to the company, but no new regulatory framework is yet in place. We still assume an emission rights system will be established in China in 2024, but now from H2, which increases Other income from the historical level of SEK40–50m a year to SEK74m per year in our 2025–26 forecasts.

Lower fair value due to more shares and reduced estimates