Classification of NuWays AG to Cloudberry Clean Energy ASA

Company Name:	Cloudberry Clean Energy ASA
ISIN:	NO0010876642
Reason for the research:	Update
Recommendation:	Buy
from:	02.09.2024
Target price:	NOK 19.00
Target price on sight of:	12 months
Last rating change:
Analyst:	Christian Sandherr

Forming a new digital player in the power market

Topic: Cloudberry (alongside Elmera and Småkraft) is investing in Kraftanmelding, a leading provider of digitalization solutions for run-of-river power production. Cloudberry’s shares remain undervalued.

Kraftanmelding focuses on automating tasks within the hydro industry to improve an asset's return. This includes automatically generating electricity certificates and guaranteeing their origin, an automated power trading system, data collection for settlement management and minimum water flow logging.

As part of the deal, Cloudberry will transfer Captiva's digital business (data-driven analysis and improvement of assets) to Kraftanmelding, while Elmera and Småkraft provide NOK 20m of equity to fund additional growth (larger customer groups and international expansion). With this, Kraftanmelding will be owned by Elmera (34%), Cloudberry (32%), Småkraft (8%) and the founders and employees (27%).

We regard this as a sensible move, as it puts Cloudberry at the forefront of the digital transformation of the industry and provides the company with plenty of data to further improve its own asset.

We confirm our BUY rating with an unchanged NOK 19 PT based on SOTP as the company remains attractively priced despite the recent strong share price development. Why to own the stock:

• Undemanding valuation. At around NOK 13/share, Cloudberry continues to trade below its own book value, which stands at roughly NOK 16.5/share. At the same time, the company offers a strong balance sheet with relatively low debt levels and some NOK 946m in cash.
• Plenty of hidden value within the balance sheet. At the end of June this year and last, the company divested several hydro assets. Importantly, the achieved valuations stood at 2.3x and 2x of the assets’ book values. Cloudberry still owns 22 further hydro assets. Taking into account the remaining small scale assets (6 operations with 44 GWh energy production, 4.8% of the current portfolio) and applying similar multiples, the company could generate roughly NOK 390m.
• Accelerating portfolio growth. The current 277 MW production portfolio is seen to grow to ~500 MW by mid 2026e. While 19 MW are already under construction, a final investment decision on its 140 MW PV project should be made as early as this year. The development backlog comprises additional 733 MW, which could also be sold. If sold, the dev. backlog alone could be worth ~NOK 550m, eNuW.

You can download the research here: http://www.more-ir.de/d/30683.pdf
For additional information visit our website: www.nuways-ag.com/research

Contact for questions:
NuWays AG – Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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