Companies: PVCS   

This month Gall & Eke shines the spotlight on PV Crystalox Solar (PVCS), a world leader in the production of ingots and solar-grade wafers from silicon. This constitutes a vital stage in the manufacture of solar cells for producing electricity and, according to Gall & Eke, specialisation in this stage of production has allowed PVCS to accumulate enviable expertise and a significant position in the market.

The group is benefiting from favourable government initiatives for renewable energy sources, which have aided the strong growth in the sector. While countries such as Japan constitute much of the current demand for solar power, EU targets for increasing the use of renewable energy and the introduction of supportive subsidies should provide a catalyst for accelerated growth in the future.

With a market share estimated to be in excess of 15 per cent and strong customer relationships, combined with considerable barriers to entry, the broker sees the fully listed group perfectly poised to reap the benefits of the sector’s growth. PVCS has also maintained its average cost of polysilicon at a significant discount to the market average, thanks to the closeness of long-term supplier relationships and diversified supply.

Gall & Eke notes that the recently floated £590 million business is trading at a discount to many major players in the solar energy sector at 22 times forecast 2007 earnings. ‘Potential for growth in the sector and the easy scalability of the company’s production make this stock attractive,’ it concludes.

PV Crystalox Solar	LSE	£731.35m	175.50p	1.50p
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Other company articles:
Gall & Eke Corporate Partners			09/08/2007
PV Crystalox Solar			18/06/2007
Silicon supplier prepares float			07/06/2007