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Solar Energy System Supplier's Project Pipeline at 'Record Levels'
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An operational and financial update on ReneSola is provided in a Raymond James report.

In a March 26 research note, Raymond James analyst Pavel Molchanov reported that ReneSola Ltd. (SOL:NYSE) ended 2020 with a record high level of late-stage projects in the pipeline and currently has more cash on hand than ever.

Molchanov relayed that the Connecticut-headquartered company develops photovoltaic generation assets and sells them to third-party buyers. This business model means capex is low, but revenue can fluctuate significantly from quarter to quarter (QoQ). For instance, Q4/20 revenue, $16.8 million, was 72% higher than Q3/20 revenue. On the other hand, Q4/20 revenue down 37% year over year (YoY) and fell short of guidance of $2325 million. Gross margin was 13.6%. Adjusted EBITDA was $2.1 million.

Though U.S.-based, ReneSola boasts a large European footprint, "making it one of the most direct ways for investors to get exposure to the European Climate Law," Molchanov noted. The solar energy company's other assets are in the U.S. and China.

"ReneSola's business model and geographic footprint add up to a one-of-a-kind story stock," he added.

Molchanov highlighted that ReneSola's pipeline of late-stage projects was 1,000 megawatts (1,000 MW) at year-end 2020, exceeding the previous high of 783 MW in Q3/18. Project completions during Q4/20 amounted to 828 MW, up QoQ from 800 MW.

ReneSola guided to 2021 revenue of $90100 million, up 2235% YoY, and gross margin of 25%, up 200-plus basis points YoY.

The analyst also pointed out the current robustness of ReneSola's balance sheet, which stands at $300 million following the company's largest-ever secondary equity offering in February.

"With this in mind, management clearly has the option to bolster the recurring revenue stream by retaining more generation assets rather than continuing to monetize nearly all newbuilds," wrote Molchanov, adding that the assets ReneSola is most likely to retain this year are those in China.

He concluded that "as with everything in clean tech, the stock's multiples have expanded over the past year, but the scarcity value is real," he added.

Thus, Raymond James has an Outperform rating and a $14.50 per share target price on ReneSola, which is currently trading around $11.43 per share.

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Disclosures from Raymond James, Renesola Ltd., March 26, 2021

ANALYST INFORMATION

Analysts Compensation: Research analysts and associates at Raymond James are compensated on a salary and bonus system. Several factors enter into the compensation determination for an analyst, including: i) research quality and overall productivity, including success in rating stocks on an absolute basis and relative to the local exchange composite index and/or sector index; ii) recognition from institutional investors; iii) support effectiveness to the institutional and retail sales forces and traders; iv) commissions generated in stocks under coverage that are attributable to the analyst's efforts; v) net revenues of the overall Equity Capital Markets Group; and vi) comparable compensation levels for research analysts at competing peer firms.

The analyst Pavel Molchanov, primarily responsible for the preparation of this research report, attests to the following: (1) that the views and opinions rendered in this research report reflect his or her personal views about the subject companies or issuers and (2) that no part of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views in this research report. In addition, said analyst(s) has not received compensation from any subject company in the last 12 months.

RAYMOND JAMES RELATIONSHIP DISCLOSURES
Certain affiliates of the RJ Group expect to receive or intend to seek compensation for investment banking services from all companies under research coverage within the next three months.

ReneSola Ltd.:
Limited Partnerships may generate unrelated business taxable income (UBTI), which can create a tax liability that must be paid from a retirement account. To the extent that Raymond James is your IRA custodian, and there is potential tax liability for UBTI generated by the fund, Raymond James will take the necessary steps to pay the tax from the retirement account by working with a third party to compute the tax liability and prepare the IRS form 990-T for submission to the IRS.
ReneSola Ltd. Raymond James & Associates, Inc. makes a market in the shares of ReneSola Ltd..
ReneSola Ltd. Raymond James & Associates has received compensation for investment banking services provided to ReneSola Ltd. within the past 12 months.

Additional Risk and Disclosure information, as well as more information on the Raymond James rating system and suitability categories, is available here.




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