The market has not yet correctly priced the potential that the generation of solar energy can bring to WEG (WEGE3), says the Bank Of America (BofA) in a report sent to customers.
According to bank estimates, the company’s solar division has grown 180% in the last four years, representing sales of more than R$2 billion.
“So, a segment that was irrelevant in 2017 will now represent around 40% of GTD’s revenue,” he says.
For the team of analysts, WEG’s sales should close 86% above the annual average of the last three years and represent 37% of total revenue, “demonstrating how this disruptive growth was relevant to the company’s overall performance”.
“This remarkable number reinforces our view that the common practice of using only WEG’s current portfolio of products to project future sales tends to significantly underestimate long-term net revenue”, he adds.
Not without risk…
Among the risks pointed out by BofA is the total dependence of the China in a scenario of bottlenecks in the supply chain, which increases the time of backlog.
The bank recalls that the expansion of US solar capacity to 2022, for example, was reduced by 25% by Wood Mackenzie due to supply chain challenges.
Solar energy in Brazil
The adoption of distributed generation (DG) in Brazil grows at a rapid pace (at 150% Compound Annual Growth Rate between 2017 and 2021), and now accounts for 8 gigawatts of capacity.
In 2021 alone, data indicate an expansion of 80%, while the order backlog for centralized generation exceeds 25 gigawatts. Looking at imports of photovoltaic panels, the numbers increased by 99% last year, recalls BofA.
“We hope that this trend will continue to advance, as solar generation accounts for only 4% of the country’s generation capacity”, he concludes.