Bankinter | The Ibex 35’s Technical Advisory Committee has decided to integrate Solaria to the index. It announced the exclusion of MasMovil last September 3rd before the takeover bid launched on the company. With this move, the Ibex, which has been temporarily composed of 34 companies, is now complete.
This decision is in line with what we anticipated. Our scenario was the entry of Solaria since it comfortably meets the minimum capitalization criteria and presents very high levels of negotiation. In fact, they are clearly superior to other components of the Ibex35 such as CIE, Almirall or Acerinox. The change will take effect on October 19th.
Listed in the Madrid’s continuous market since June 2007, Solaria has historically covered the entire solar energy value chain from wafer production to solar parks management. In recent years, the company has more than 410MW worldwide and the target to reach 3,325GW by the end of 2023.
The positive aspects are the visibility and recurrence of income once the solar plants are built, as well as the support of the regulators to photovoltaic energy and the investment plan that aims to increase the installed power from the current 360MW to 3,320 MW in 2023.
The negative points are the risk of executing the investment plan and the debt that we qualify as high, at 2Q20 it was at 7.5x EBITDA and we estimate that it will reach 8.3x at the time of the greatest investment effort.
Our dividend discount valuation and target price 17 euros. We expect a slight revaluation until the day the incorporation of Solaria into the Ibex-35 becomes effective.
