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Forever Following the Sun: What Happened to Solar Energy Stocks?

The corona brought them to a peak, the realizations erased some of the value - and the discourse on global warming corrected back upwards.

Solar energy companies have experienced a shaky period that is difficult to predict how it will continue.

However, it should be borne in mind that with all the problems, it is still the energy of tomorrow

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• solar energy

• solar energy

• The Tel Aviv Stock Exchange

• stock

Roast Greenberg

Wednesday, 27 October 2021, 16:57 Updated: Thursday, 28 October 2021, 15:07

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The climate crisis did not go unnoticed by the shares of the solar companies traded on the Tel Aviv Stock Exchange, which received a boost from Energy ahead of the climate conference that is expected to open this November in the city of Glasgow, Scotland.

The increases of the last three months, however, have not covered the write-off of about NIS 2.9 billion from the value of the solar companies in Ahuzat Beit, since the peak value they climbed in the corona year - when investors navigated their money to the industries of the future.

The write-off constitutes about 11% of the aggregate value at the height of the corona days, of the nine energy companies focusing on the solar field, which stood at about NIS 24.7 billion.

Since then, it has dropped to about NIS 21.8 billion, according to a Walla!

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Eran Junger, Director of the Research Department in the Brokerage of the Meitav Dash Investment House (Photo: PR)

The realizations led to declines

"The declines experienced by the shares of the solar energy sector until about 3 months ago were mainly due to realizations after a sharp rise in their prices during the corona period," says Eran Junger, director of the research department in the brokerage of Meitav Dash Investment House.

"Examining the U.S. stock market for example" he continues "illustrates this well, as the area there yielded about 140% return during the corona period, which is among the highest in the U.S. market in 2020, followed by partial realizations, which are natural in light of the sharp rise.

The decline is also somewhat in contrast to the US government exchange at the time, which replaced a president who was less supportive of the industry, with a president implementing a government program to promote it. This is in addition to logistical problems and a sharp rise in the price of raw materials, including those of the panels.

Thus, if in the last decade the prices of solar panels fell by about 80%, in 2021 a rise began that led to investors 'fear of rising costs of construction of solar fields, and expected a decline in the yields of companies' projects.

"All of this has led to declines that the sector has suffered from the peak it reached in the corona year until about 3 months ago - the point from which the green energy sector began to recover."

Shares of the solar energy companies on the Tel Aviv Stock Exchange (Photo: Walla !, no)

The flowers to the sunflower

The companies that have recovered best since the beginning of the year are Sunflower, which has jumped 27.61% since the beginning of the year to a value of NIS 296 million; Analyte, which leads the table of solar energy companies with a value of about NIS 6.9 billion after rising by 11.94% since the beginning of the year; And the Energy Economy, which rose 9.52% for the same period and is traded on the Tel Aviv Stock Exchange worth NIS 619 million (see table).

The other 6 companies have fallen by an average of 7.6% since the beginning of the year, and are led by Solgreen and Solair, which have fallen by 12.8% and 12.49% respectively, as of the end of the last trading day examined.

"The sector is not homogeneous," adds Junger, "and it has a large number of different companies in the territories in which they work, along with different profit margins on projects, different yield ranges of the latter, and a different portfolio size.

In recent times, a number of companies have made moves in favor of entering new territories, and some of the large companies have even made significant acquisitions in the past year.

To take as an example the two sector leaders in the Tel Aviv Stock Exchange in terms of size, then Energix (which is traded on the Tel Aviv Stock Exchange at a value of NIS 6.9 billion) has acquired projects that will yield more in the longer term than Enlight (which is traded at the same value in a house). More.

In addition, the former has increased its portfolio by a future 3.1 gigawatts, while the latter by a future 20 gigawatts. "

Ofer Yanai, Chairman of Nofar Energy. Altshuler Shaham and the Phoenix led a fundraising of NIS 555 million (Photo: Raz Ozir)

Not just on the stock market

It should be noted that the solar companies also experience acceleration in the collaborations they experience from the institutional investors also outside the stock exchange. For example, he raised a company for Doral and bought 20% of the latter's American subsidiary for $ 110 million. As part of the agreements between the two, the insurance company will invest about $ 100 million in the company's leading project in the US.

Another example is the attempt by Altshuler Shaham Investment House to join joint ventures with the energy company Nofar Energy. about two weeks that the investments led an investment of approximately -555 million which, together with the Phoenix insurance company and other investors.

for 'Altshuler Shaham' This is the first investment in the shares of an Israeli green energy, will be about 200 million of total -555 million A total investment, and alongside it, the investment house will invest an additional NIS 200 million in a joint company that will be established together with Nofar Angie.For investments in renewable energy projects.

The two tried to cooperate in the past as part of the acquisition of the Thermal 'Magalim' field from the Noy Infrastructure Fund for NIS 580 million, but withdrew after examining the feasibility of the acquisition and found that they would not be able to achieve a higher return than estimated at the time, 8.5%.

"You have to remember one more thing" up Junger, "and is the largest Israeli companies are already where they have sufficient income-producing projects that could serve the investment required them to new projects.

In the Middle Ages, such as Doral and Nufar, it will take another year or two. So they should continue to rise "Their performance, along with creating a stable and steady cash flow. How will this affect the share price? It is difficult to predict."

It is evident that the change in the taste of investments affected the appetite of investors and the navigation of their money, among other things, from the shares of solar energy companies.

However, keep in mind that these companies represent the energy industry of the future, based on regulatory and objectives of government set forth in the US, Europe and Israel. Therefore, capital markets hope that with advances in performance, progress also in share prices.

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