Hi all,
Was doing some research into this ETF as I was attracted to this thematic (I don't hold this ETF). It certainly is a growing sector and the growing awareness of ESG investing has put clean renewable energy at the forefront of many investors.
My key takeaways of this thematic, based on the quick/very high level research is that, the stocks largely:
A broad mix of manufacturers and power generaters and some suppliers of raw materials and covers a range of global winners/industry leaders (from what I could tell) to developing companies. The companies in this ETF largely has some sort of commercial product and revenue stream.
Information used include annual results, wikipedia, and recent news articles (internal and external releases). This took a bit over a week to compile so the holding information may be a little old.
VERBUND AG: Ostensibly Austria's largest electricity provider (according to Wikipedia), and more than 95% of electricity generation comes from hydropower, but also uses thermal and wind power generation and . Austrian macro outlook for renewables seem quite rosy given government legislation passed in July 2021 aiming for carbon neutrality by 2040. Involved in the generation, trading and selling of electricity. Not yet cash flow positive as of 2020 but makes a profit.
ORSTED A/S: Danish renewable energy generation company - including wind and solar, but mostly wind. Cash flow on and off positive and negative, but pays a dividend. Has a global presence through the US and APAC (not Australia, but areas such as Japan, Taiwan, and South Korea. Recent news include an expected hit to earnings due to “low wind speeds across Europe.”
EDP RENOVAVEIS SA: Spanish multinational with electricity generation operations in Europe, North America and Brazil. Touts itself as the world's fourth largest wind energy producer, but also generates solar electricity via. Is mainly cashflow negative and nil dividend.
FIRST SOLAR INC: Headquartered in the USA. Developer, constructor and operators of PV power plants (also known as solar power plants). Mainly cashflow negative and nil dividend. Operates globally and currently expanding their manufacturing capabilities (Ohio USA and in India), as well as working to drive down manufacturing costs. According to a 2020 update regarding Covid-19 impacts to its manufacturing plants seem to have been minimal as they were permitted to operate in Vietnam, Malaysia, and the US. Also, they have developed a recycling system where materials are recovered and recycled - over 90% of semiconductor material and around 90% of glass.
SOLAREDGE TECHNOLOGIES INC: Manufactures solar power related tech - inverters, and making panels ‘smart’. Categorised as a Semiconductors and Semiconductor Equipment company. Headquartered in Israel. Operates in a B2B manner such as providers of solar systems, solar installers and distributors, and engineering firms. Cashflow positive and recent earnings uplift has bumped its share price.
VESTAS WIND SYSTEMS A/S: Wind turbine manufacturer and installer, based in Denmark. Has global production facilities. Recent news announcements include insider selling. Takes the global lead in market share, but cashflow fluctuates from positive to negative. Margin is around 5%. Has a services business that makes up around 25% of the most recent quarter’s revenue.
BROOKFIELD RENEWABLE COR-A: Subsidiary of Brookfield Asset Management - a global alternative asset management company. The renewables side of the business (ie BROOKFIELD RENEWABLE) headquartered in Canada. Global renewable energy generator - hydroelectric plants, wind farms, and solar farms. Pays a dividend, but 2020 had a negative ROE. Undergoing some structural changes with its listings.
XINYI SOLAR HOLDINGS LTD: Manufacturer of glass used in solar farms, with manufacturing operations in China and Malaysia. Dividend yield of approximately 1.9%. A recent publication from Bloomberg suggests that recent rallies in share price could be the result of this company being in a favourable sector (green energy) and hence, China would be less likely to focus its clampdowns.
ENPHASE ENERGY INC: The core business makes solar panels ‘smart’ with their micro inverter technology. The company has stated that the demand of its microinverters are ahead of supply, but also noting supply chain constraints globally for semiconductors. Key movers of stock price include share buybacks totalling almost $200million (1.7 million shares).
SIEMENS GAMESA RENEWABLE ENE: Primarily involved in wind energy turbines as a OEM (original equipment manufacturer), installation of wind turbines (onshore and offshore, ie on land and in the sea) ,and services (maintenance). Its headquarters are in Spain, but they operate globally. Key headwinds they have indicated are volatile raw material prices, and provisions made for some “onerous contracts.” Interesting to note they are developing a hydrogen production plant in Denmark. In 2020 it seems there was a large acquisition where EBITDA was negative (6/30/20). Some recent news announcements include grants provided by the UK government.
CONTACT ENERGY LTD: Powers New Zealand through the generation of hydro and thermal electricity which make up 80% - 85% of their generated electricity. They also operate gas and diesel fired stations. Tailwinds include intense retail electricity market competition, but generates a profit, and pays a dividend. Current strategy includes decarbonising the portfolio and transition to renewables, with a geothermal plant currently in build progress (expected to be online by 2023).
MERIDIAN ENERGY LTD: Based in New Zealand, with its core business in electricity generation. Unlike Contact Energy all electricity generated are from renewable sources (wind, water and sun), with farms located in Australia and New Zealand. Additionally it operates an energy retailing software company “Flux Federation.” “Dam Safety Intelligence” is an engineering subsidiary. The majority shareholder for this company is the New Zealand Government who has a 51% stake. Group has three main brands and sells electricity through Powershop in Australia, and Meridian and Powershop in New Zealand. Pays a dividend, P/E around 30. Recent results released on 25 August 2021 indicate FY21 EBITDAF negative 15% on FY20, with severe drought only having eased recently. I didn’t know this company existed on the ASX but this has been added to my watchlist.
SUNRUN INC: Residential solar service company, for rooftop solar and battery storage. As per their documentation: “engaged in the design, development, installation, sale, ownership and maintenance of residential solar energy systems (“Projects”) in the United States.” Key announcements include a new CEO with the transition effective August 31 2021. Have had consistently negative cashflow and multiple issuing of common stock, with shares outstanding around 103million at 2017 to 205.93million at 2021.
BALLARD POWER SYSTEMS INC: Manufactures fuel cell power products, in the hydrogen space, with five key applications - bus, trucks rail, marine and passenger cars. It has had negative ROA, ROE, net income for the past few quarters, though it does seem to have a global customer base with some significant contract wins (It looks like the R&D expense is quite high on this one). Interesting projects it is currently and previously have been involved in include the U.K.’s first fully sized hydrogen demonstrator refurbished train, deployment of 500 fuel cell trucks in Shanghai for Dongfeng, powering UPS trucks in California for their fuel cell electric vehicles, plus bus contracts around the world such as Tata Motors Buses in India.
ORMAT TECHNOLOGIES INC: A global manufacturer of geothermal power generating equipment. It has three main segments that generate revenue - generating geothermal electricity, selling “REG” (Recovered Energy Generation” and energy storage (develops batteries). More on the REG - waste heat recovery projects, where waste heat from industrial processes is converted to power. Pays a quarterly dividend however seems to do a lot of cap raising and debt issuance to keep this company afloat.
CIA ENERGETICA DE-SPON ADR: Brazillian energy company involved in the generation, transmission and distribution of energy through renewable means - hydroelectric dams. Also has a majority stake in an Renova Energy, an energy company which generated energy via hydroelectric dams, solar farms and wind farms hydroelectricity, but is now bankrupted and in the process having its assets sold off. The focus area for this company is Minas Gerais, the fourth largest state in Brazil, where it has a 96% coverage.
DAQO NEW ENERGY CORP-ADR: A Chinese polysilicon (a form of silicon) manufacturer, and mainly supplies of solar photovoltaic manufacturers. Note that in June 2021, the United States Bureau of Industry and Security placed a Daoqu subsidiary in its “Entity List,” which imposes certain trade restrictions. The Bureau was concerned that the subsidiary was utilising forced labour in Xinjiang. Positive earnings, no dividend, but a good balance sheet. Note this is a VIE (Variable Interest Entity) listing.
BLOOM ENERGY CORP- A: Manufactures fuel cells. Its technology converts natural gas, biogas, and/or hydrogen into electricity without combustion. Negative EBITDA from 2016 - 2020, with financing through issuance of common stock every year, and large R&D expenses, fluctuating changes in total revenues. Criticisms of this company in recent news articles include the fact that solar and wind renewables have a cheaper cost rate, and its wastage and emissions are much larger than advertised by the company.
SHOALS TECHNOLOGIES GROUP -A: A provider of electrical balance of system or “EBOS” solutions for solar power systems, component/equipment that takes energy produced from a solar panel and moves it through the conversion system to produce electricity. Based in the US and IPO’d January 2021. Positive EBITDA and cashflows (2018-2020).
SCATEC ASA: Norwegian power producer who’s core business is to develop and operate renewable power plants globally through solar farms and hydro dams. Pays dividends with positive EBITDAs. Recent new announcements include primary insider buying from the CFO as well as power plant acquisitions.
BORALEX INC -A: A renewable energy producer through wind, solar hydroelectricity and thermal means. Based in Canada but has also operations in the US and France. Positive EBITDA, with recent positive cashflows (2019 -2020). Also note issuances of common stock almost every year, with high capex (2020’s capex was almost 41% of its cash from operations). Pays dividends.
RENEWABLE ENERGY GROUP INC: Core business is the operation of biorefineries and feedstock processing facilities - a biodiesel production company. Converts natural fats, oils, and greases into biofuels. Headquartered in the US. Positive EBITDAs but declining (last results saw a 55% decline). Insiders have been selling stock. P/E at about 11.
SUNNOVA ENERGY INTERNATIONAL: Operates globally as a residential solar and energy storage service provider. Currently also developing its software platform for solar sales teams and installers. Negative net incomes with lots of long term debt and issuances of common stock, and negative cashflows.
NORDEX SE: Wind turbine manufacturer headquartered in Germany, but with global sales operations and contracts. High debt and recent issuances of common stock was cashflow positive around 2016 & 2018 but since has gone cashflow negative. As such negative ROE and slim margins under 5% (mostly negative).
FUELCELL ENERGY INC: In the fuel cell industry as a manufacturer and operator of power plants running on natural gas and biogas. Operates globally, headquartered in the US. Revenue streams include power plant sale/lease, services (recurring), electricity sales and project revenue. Negative ROE, negative EBITDA, negative cashflows, issuances of common stock every year.