30. December 2020 | 10:02 CET
Encavis, dynaCERT, PNE - sustainable performance rockets for 2021
Sustainability is inexorably becoming an essential criterion in the investment process. The interpretation of ESG definitions sets the framework for sustainable investments. Translated, the abbreviation ESG stands for environment, social and responsible corporate governance. Investing sustainably doesn't necessarily mean sacrificing returns; we present three first-class investment opportunities.
time to read: 3 minutes by Carsten Mainitz
ENCAVIS AG - producing more energy than a nuclear power plant
Encavis is a major independent power producer. Its electricity is generated exclusively from renewable energy sources. The Company acquires and operates solar parks and (onshore) wind farms and is active in ten European countries. Through guaranteed feed-in tariffs or long-term power purchase agreements, stable and predictable earnings are achieved. Through Encavis Asset Management AG, the Group offers its expertise to institutional investors.
Encavis generally invests conservatively. Investments are only made in solar and wind parks that are in the construction phase, turnkey or already in operation. In the meantime, the Hamburg-based Company has built up a considerable portfolio with a capacity of 1.8 GW. By comparison, a medium-sized nuclear plant has a rated capacity of 1.4 GW and can thus supply around 3.5 million households. A good 2/3 of the energy generated by Encavis is generated by photovoltaics. In relation to the entire portfolio, the guaranteed feed-in tariff's average duration is 13 years, which promises a high degree of planning security.
The Group confirmed its targets for the full year when presenting its Q3 data. Encavis aims to increase sales to over EUR 280 million (previous year: EUR 273.8 million). Currently, the SDAX group is valued at around EUR 3 billion. In their current study, the DZ Bank analysts recommend the share as a buy with a target price of EUR 25.10. That is a full 20% upside potential.
DYNACERT INC - the right answers to pressing questions
dynaCERT is fully committed to emission reductions as part of its business. The Toronto-based Company manufactures and markets "Carbon Emission Reduction Technology" for use in internal combustion engines. The Company has developed a patented hydrogen technology for retrofitting diesel engines, which can significantly reduce fuel consumption and pollutant emissions.
The technology is already widely used in the market for road vehicles, power generation plants, mining and forestry machinery, ships and rail locomotives. North American fleet operators are an important customer group. For their trucks, the CleanTech Company offers conversion kits that pay for themselves relatively quickly. In addition, fuel savings can be measured using software also offered by the Company. In the future, the technology solution will be expanded to include additional features.
The Canadians' innovative products have a lot of potential; after all, reducing emissions is not only desirable from a sustainability perspective. The pricing of emissions provides an additional argument for the growing demand for dynaCERT solutions.
PNE AG - price exhausted after doubling?
The PNE Group has been successfully active in the wind energy sector since the mid-1990s. PNE covers the entire value chain from development, project planning, realization, financing, operation, sales and onshore wind farms' repowering. In addition, offshore wind farms are developed until they are ready for construction. In 2019, the Company broke through the 3,000 MW installed nominal capacity mark. Currently, the PNE Group is active in Europe, South Africa and North America.
In the future, PNE wants to position itself much more broadly. The vision is to transform the Company into a "Clean Energy Solutions Provider", i.e., a provider of solutions from different renewable energies. In addition to wind energy, photovoltaics and storage solutions and power-to-gas technologies focusing on hydrogen, are to be the subject of business activities. Also, the geographical radius of action is to be significantly expanded.
PNE confirmed its operating profit targets with EBITDA of EUR 15 to 20 million and EBIT of EUR 5 to 10 million for the current fiscal year. The 9M figures showed a loss due to fewer project disposals. The Company is currently valued at around EUR 620 million. The share price has doubled to EUR 8 in 2020. If we take the opinion of First Berlin analysts into account, the stock is exhausted. However, we believe that anyone looking at the medium-term prospects will see further upside potential.