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A presentation by Gerard Reid at TBLI CONFERENCE EUROPE 2008.
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The Clean Tech SpecialistThe Clean Tech Specialist
1
Investing in Cleantech – The Public Markets Aspect
The contents of this document are strictly confidential and may not be copied, used, or transferred without the prior consent of Oikovest.
The Clean Tech SpecialistThe Clean Tech Specialist
2
Themes
1. Cleantech Investment
– the Chance of our Lifetime?
2. The Challenges of being a Cleantech
Investor in the Public Markets
3. Unique Opportunity?
The Clean Tech SpecialistThe Clean Tech Specialist
3
Cleantech Investing – the Chance of our Lifetime?
USD
Millions
Cleantech VC investment reached a record $2.6 billion in Q308
The Clean Tech SpecialistThe Clean Tech Specialist
4
Cleantech Investing – the Chance of our Lifetime?
70%-
60%-
50%-
40%-
30%-
20%-
10%-
0%
10%
2.1.
08
16.1
.08
30.1
.08
13.2
.08
27.2
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12.3
.08
26.3
.08
9.4.
08
23.4
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7.5.
08
21.5
.08
4.6.
08
18.6
.08
2.7.
08
16.7
.08
30.7
.08
13.8
.08
27.8
.08
10.9
.08
24.9
.08
8.10
.08
Date
% Gain/Loss
Ardour Glbl Index WILDERHILL CLEAN ENER IX NASDAQ COMPOSITE INDEX
The Clean Tech SpecialistThe Clean Tech Specialist
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The Big Picture…
= X
Population x= AffluenceEnvironmental Impact
EI AxP=
The Clean Tech SpecialistThe Clean Tech Specialist
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The Big Picture…
Currently, 800m people, 12% of the world’s population consume 75% of the world’s energy resources.
World Fuel Consumption
The Clean Tech SpecialistThe Clean Tech Specialist
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1980s: Every Irish person wanted to be German………..
1988: Irish GDP $10,347 German GDP $15,979
2008: 4m Irish people became more German than the Germans……..
2008: Irish GDP $44,415 German GDP $35,392
The Clean Tech SpecialistThe Clean Tech Specialist
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Ireland now consumes 24b kwh of electricity per year, double that of
1988……..
……..whilst Nigeria with apopulation of 140m uses 17b
kwh…..
The Clean Tech SpecialistThe Clean Tech Specialist
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These days, every Chinese person wants to be German………..
The Clean Tech SpecialistThe Clean Tech Specialist
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What happens when 1.3b Chinese try to become German?
Private Car possession in China would rise from 15m to 710m………..
Chinese GHG Emissions would rise from 6bt to 16bt p.a………..
The Clean Tech SpecialistThe Clean Tech Specialist
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If all Chinese would become ‘Germans’….
The Clean Tech SpecialistThe Clean Tech Specialist
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The Solution….
Draconian solutions to control Population and Affluence?
The Clean Tech SpecialistThe Clean Tech Specialist
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=
X
Population x Affluence
EnvironmentalImpact Clean Technology
=
…OR…
The Clean Tech SpecialistThe Clean Tech Specialist
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Alternative Energy
Energy Efficiency
Environmental
Energy Storage
What is Clean Technology?
Fuel Cells
Advanced Batteries
Flywheels
Hydrogen Generation and Storage
Underground Caverns
Solar: PV, Thermal, Equipment suppliers, Raw Materials Supplies
BioEnergy: Biofuels, Biogas, Agriculture
Wind: Wind Park Development, Equipment Suppliers, Raw Materials Supplies
Water: Hydro, Wave and Tide
Geothermal
Nuclear
Buildings
Transportation
Power Generation, Transmission and Distribution
Distributed Power
CO₂ Emissions & Trading
Clean Water
Desalination
Waste Management
Recycling
Resource Efficiency
The Clean Tech SpecialistThe Clean Tech Specialist
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Conclusion: Cleantech growth paradigm more intact than ever before
We may even have reached a tipping point!
However, we have a problem with thepublic markets….
The Clean Tech SpecialistThe Clean Tech Specialist
16
Themes
1. Cleantech Investment
– the Chance of our Lifetime?
2. The Challenges of being a Cleantech
Investor on the Public Markets
3. Unique Opportunity?
The Clean Tech SpecialistThe Clean Tech Specialist
17
YINGLI GREEN ENERGY HOLD-ADR
100%-
90%-
80%-
70%-
60%-
50%-
40%-
30%-
20%-
10%-
0%
2.1.
08
16.1
.08
30.1
.08
13.2
.08
27.2
.08
12.3
.08
26.3
.08
9.4.
08
23.4
.08
7.5.
08
21.5
.08
4.6.
08
18.6
.08
2.7.
08
16.7
.08
30.7
.08
13.8
.08
27.8
.08
10.9
.08
24.9
.08
8.10
.08
22.1
0.08
Date
% Gain/Loss
The Cleantech Market is not efficient…
Dramatic Fallsin Share Prices
The Clean Tech SpecialistThe Clean Tech Specialist
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VESTAS WIND SYSTEMS A/S
100
150
200
250
300
350
400
450
500
550
600
650
700
19.9
.08
24.9
.08
29.9
.08
4.10
.08
9.10
.08
14.1
0.08
19.1
0.08
24.1
0.08
29.1
0.08
Date
Share Price DKK
Huge volatility
The Cleantech Market is not efficient…
The Clean Tech SpecialistThe Clean Tech Specialist
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Massive Differences inAnalyst’s Expectations
The Cleantech Market is not efficient…
Solon Analyst's 2009 EPS Estimates
0,00 €
1,00 €
2,00 €
3,00 €
4,00 €
5,00 €
6,00 €
7,00 €
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
The Clean Tech SpecialistThe Clean Tech Specialist
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Themes
1. Cleantech Investment
– the Chance of our Lifetime?
2. The Challenges of being a Cleantech
Investor on the Public Markets
3. Unique Opportunity?
The Clean Tech SpecialistThe Clean Tech Specialist
21
Public marketvaluations areridiculously low – Somecompanies are trading at almost bankruptcylevels
Unique Opportunity?
JA Solar Holdings
Year Revenues EBIT Net Income EPS 2008E 1036.21 172.00 158.68 0.94 2009E 1791.71 279.67 264.00 1.34
Share Price $ 3.34
Enterprise Value $m 309.94
Cash $m 520.20
Market Cap. $m 560.75
Year EV/Sales EV/EBIT P/E 2008E 0.30 1.80 3.6 2009E 0.17 1.11 2.5
The Clean Tech SpecialistThe Clean Tech Specialist
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What will change the current situation going forward?
• Intensified M&A activity (already started)
• Further growth (despite downturn)
• Rising maturity and wider acceptance of technologies (already far progressed in some fields)
•New Technologies
When looking back in some years time, we will probably conclude that today’s Cleantech market was the Opportunity of our Lifetime!
The Clean Tech SpecialistThe Clean Tech Specialist
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Contact Details
Gerard ReidOikovest GmbHOranienburger Strasse 23Berlin 10178 Germany
Tel. +49 (030) 27574854Fax +49 (030) 27574856
Email [email protected]
The contents of this document are strictly confidential and may not be copied, used, or transferred without the prior consent of Oikovest.
Thank you!