2025-06-05-Bernstein-苏格兰南方能源公司（SSE）_SSE_为何SSE比我们之前认为的更具弹性（以及2025财年业绩后的模型更新）_26页_3mb

Summary of SSE PLC Document

Core Content

This document provides an analysis of SSE PLC's FY25 results and outlines the updated investment model, emphasizing the company's resilience and strategic flexibility. The report highlights key developments in SSE's capital allocation, renewable projects, and regulatory clarity, while maintaining a positive outlook on the company's long-term prospects.

Main Points

1. Capital Allocation Flexibility

• SSE reduced its 5-year capex plan from £20.5bn to £17.5bn, primarily due to less attractive opportunities in renewables and thermal businesses, and permitting delays (especially the Skye transmission project).
• The shift in investment composition, with 60% of capex now allocated to Networks, shows a more disciplined and flexible capital deployment strategy.
• This flexibility allows SSE to adjust its capital program based on market conditions and opportunity sets, reinforcing the investment thesis.

2. Renewable Projects and Delays

• SSE is developing several major renewable projects across Europe, including:

  • IJmuiden Ver Alpha: A 2GW offshore wind project in the Netherlands, delayed due to softer PPA market and government postponement of tenders.
  • Coire Glas: A 1.3GW pumped storage project in Scotland, which may require a subsidy mechanism to proceed.
  • Berwick Bank: A 4.1GW offshore wind project in Scotland, facing delays due to planning concerns and likely to proceed in 2027.
  • Arklow Bank 2: A 800MW offshore wind project in Ireland, also facing permitting delays.
  • Continental European Onshore Wind and Solar Portfolio: Acquired from Siemens Gamesa in 2022, but has seen delays and a £249.5m impairment due to permitting and grid connection issues.

• The report notes that none of these major projects are expected to reach FID in the near term, but they offer long-term value with potential for future development.

3. Zonal Pricing and Regulatory Clarity

• The UK government is expected to announce zonal pricing decisions before the AR7 auction in August 2025, which has been a concern for SSE's stock.
• While SSE opposes zonal pricing, the report suggests that the impact on the company would be minimal.
• The Ofgem Draft Determination on June 25, 2025, will provide clarity on cost of equity, regulatory depreciation, and cost challenges, which are crucial for investors.

4. Financial and Valuation Metrics

• SSE's current price target is 2,300.00 GBP, with an upside of 32% from the close price of 1,742.00 GBP on 4 June 2025.
• The company's EV/EBITDA remains at 0.1x, indicating strong financial positioning.
• SSE's Net Debt/EBITDA is expected to rise from 3.19x in FY25 to 4.08x in FY27, reflecting increased capex but also showing that the company is still within a reasonable range for its BBB+ credit rating.

5. Investment Implications

• SSE remains the top pick with an Outperform rating.
• The company's defensive growth and capital discipline are key strengths.
• The report suggests that SSE's need for equity issuance beyond 2027 is lower due to the flexibility in capital allocation and potential divestment of assets.

Key Information

Current Projects and Progress

• Dogger Bank: The world's largest offshore wind farm under construction, with 1.44GW of net capacity. Phase A is expected to be completed in H2 2025, Phase B in 2026, and Phase C in 2027.
• Onshore Wind: 440MW under construction, with the largest being the 208MW Strathy South in Scotland and the 101MW Yellow River in Ireland.
• Battery Storage: 620MW under construction across three sites, with no further battery projects expected after completion.

Balance Sheet and Funding Options

• SSE has a £3.5bn of additional funding options, including:
  • Potential sale of a 25% stake in the distribution division.
  • Access to £2bn of hybrid borrowing by FY27.
  • Possible divestment of stakes in operational wind farms like Viking (443MW) and under-construction projects like Strathy South (208MW) and Yellow River (101MW).

Investment Outlook

• The report reiterates the Outperform rating and 2,300.00 GBP price target for SSE.LN.
• The company's strategic shift towards Networks and its capital discipline are highlighted as key strengths.
• Despite challenges in the renewable sector, SSE's long-term growth and resilience are still viewed positively.

Conclusion

SSE PLC continues to demonstrate strong resilience and strategic flexibility, with a well-positioned balance sheet and a diversified portfolio of assets. The report maintains a high conviction in the company's management and long-term growth potential, especially in the UK and Irish markets, despite near-term delays in key renewable projects. The upcoming clarity on zonal pricing and regulatory determinations is expected to remove a key overhang on the stock, further supporting the investment thesis.