PNE WIND AG – Value Analysis (XETRA:PNE3) : December 29, 2017

Capitalcube gives PNE WIND AG a score of 69.

Our analysis is based on comparing PNE WIND AG with the following peers – Nordex SE, EnergieKontor AG, Ecosuntek S.p.A. and Siemens Gamesa Renewable Energy, S.A. (NDX1-DE, EKT-DE, ECK-IT and SGRE-ES).

Investment Outlook

PNE WIND AG has a fundamental score of 69 and has a relative valuation of UNDERVALUED.

Fundamental Score

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Company Overview

  • With respect to peers, relative outperformance over the last year is in contrast to the more recent underperformance.
  • It trades at a lower Price/Book multiple (0.93) than its peer median (1.20).
  • We classify PNE3-DE as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.
  • PNE3-DE has relatively high profit margins while operating with median asset turns.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • PNE3-DE‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • The company’s relatively high gross and pre-tax margins suggest a differentiated product portfolio and tight control on operating costs relative to peers.
  • While PNE3-DE‘s revenues growth in recent years has been around the peer median, the stock’s below peer median P/E ratio suggests that the market likely sees the company’s long-term growth prospects to be fading.
  • The company’s capital investment program and to-date returns suggest that the company is likely making big bets on the future.
  • PNE3-DE might have enough interest coverage to take-on additional debt prudently.

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Leverage & Liquidity

PNE3-DE might have enough interest coverage to take-on additional debt.

  • While PNE3-DE‘s debt to enterprise ratio of 85.16% is on the high side compared to an overall benchmark of 25% (Note: The peer median is currently 61.04%), it also enjoys a relatively high interest coverage level of 8.60x which may give the company enough financial strength to support additional debt. Thus, the company is classified as having Some Capacity to raise more debt.
  • All 4 peers for the company have an outstanding debt balance.

PNE3-DE has maintained its Some Capacity profile from the recent year-end.

  • PNE3-DE‘s interest coverage is its highest relative to the last five years and compares to a low of -0.21x in 2015.
  • While its interest coverage increased to 8.60x from 6.90x (in 2016), its peer median decreased during this period to 3.23x from 6.57x.
  • Interest coverage rose 5.04 points relative to peers.
  • PNE3-DE‘s debt-EV has declined 5.07 percentage points from last year’s high but remains above its five-year average debt-EV of 72.99.
  • The decrease in its debt-EV to 85.16% from 90.23% (in 2016) was also accompanied by a decrease in its peer median during this period to 61.04% from 71.52%.
  • Relative to peers, debt-EV rose 5.41 percentage points.

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Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Nordex SE 58.01 1.46 3.23 52.28
EnergieKontor AG 61.04 2.06 2.85 19.34
Ecosuntek S.p.A. 72.99 0.84 -0.27 9.03
Siemens Gamesa Renewable Energy, S.A. 9.99 1.05 12.9 75.53
PNE WIND AG 85.16 1.79 8.6 21.92
Peer Median 61.04 1.46 3.23 21.92
Best In Class 9.99 2.06 12.9 75.53

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Company Profile

PNE WIND AG engages in the development, planning, realisation, financing, operation, marketing and repowering of wind farms and transformer stations. The company operates through the Projecting of Wind Power Turbines and Electricity Generation segments. The Projecting of Wind Power Turbines segment installs and manages wind farms. The Electricity Generation segment produces electricity through renewable energy power plants. It also offers technical & commercial management services, and regular maintenance for the wind farms. PNE WIND was founded in 1995 and is headquartered in Cuxhaven, Germany.

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