High demand, high supply: Citi names global solar top picks

Xinyi Solar Holdings

07/06/2023 13:57

** Citigroup expects demand and supply for solar energy to
spike, with global installations rising to 330GW in 2023 and
400GW in 2024
    ** It sees China's capacity additions surging, as major
solar equipment makers pursue vertical expansion and added
capacity domestically and internationally
    ** "We prefer companies with high sales volume growth and
sustainable margins," Citi says 
    ** It names Sungrow  300274.SZ , Flat Glass  601865.SS  and
Xinyi Solar  0968.HK  as top picks, with LONGi  601012.SS  and
Tongwei  600438.SS  at the bottom
    ** Policy developments have supported returns in Europe, and
solar remains a key enabler for net zero targets, Citi says
    ** EDPR  EDPR.LS  is its top pick in Europe thanks to
geographic diversification, strong management and balance sheet
    ** Utility scale growth offsets residential slowdown in the
U.S., Citi says, noting low adoption rates and projected
increases in electricity rates show room for growth
    ** Indian government is pushing rapid growth in renewables,
but success depends on large-scale execution and the ability and
willingness of electricity distributors to procure renewable
energy, the broker says
    ** Citi says hydro is losing share to wind and solar in
Brazil; sees WEG  WEGE3.SA  as the best-positioned player to
capitalize on the expansion of solar in the country

 (Reporting by Ozan Ergenay)
 ((ozan.ergenay@thomsonreuters.com))