第一太阳能：232关税推迟影响我们对其的初始评级

.+1 917 344 8503sunaina.ocalan@bernsteinsg.comAnshika Bajpai +1917 344 8306anshika.bajpai@bernsteinsg.com UnderperformPrice Target First Solar: The 232 trade - pushbacks to our initiation We initiated last week on Powerand Energy Transition,and we'vegot somepushback onour Underperform onFSLR,mainly around how we'renot giving them creditfor Sectiontariffs on polysilicon imports that would limit solar panel imports into the US and henceallowFSLRtomaintain or raise ASPs and not lose market share.2)The extension of 45xtaxcredits beyond 2032,allowingFSLRtooffset costs and maintain currentmargins beyond ourmodeled phase-out year.3)A growing U.S.utility scale solar market. 1 - We believe that the impact of these tariffs (if imposed) on FSLR would be higher marketshareof U.S.solar shipments,as manufacturers of C-Sipanels could raise ASPs to makeup for the tariff costs. In our initiation we modeled FSLR's shipments gaining market shareto 2030,growingfrom~30%todayto almost 50%late in the decade.We don't assume ahigher market share AND an increase in ASPs, since the increase in ASPs could result in aslow-down of solar uptick. 2-We model 45xtax credits getting phased out beginning in 2030 as stated by currentpolicy.We valuethe 45x credit stream through 2032 at a 9% discount rate.At $111/shtax credits makeup~50% of ourvaluation.Weare watchingfornews aroundthepotentialextension oftax credits, and will check and adjust as things change. 3 - We believe that utility scale solar is growing in the U.S. We grow FSLR's market share ofthis growing market. Ourlongertermviewof thinfilmpanels isthatthemoatis weaksince Perovskite solarcellsis the next generation technology,and believe that Si-based perovskitetechnology is likelyto commercialize faster, adding competitive technology risk. We givethem credit for theircontractedbacklog (worth~$1O/sh inour view)andvaluethepotential formoreTOPConlicensing deals at $9/sh. InvestmentImplications We rateFSLRUnderperform with a price target of $217/sh. orraiseASPs and notlose market share.2.The extension of45xtaxcredits beyond2032,allowingFSLRtooffsetcosts and maintain currentmargins beyond ourmodeled phase-outyear.3. A growing utility scale solar market in the U.S. polysilicon and derivative products. We note that the decision was expected in June 2026 but has been delayed to August.Webelieve thatthe impact of these tariffs (if imposed) on FSLR would behighermarket share of U.S.solar shipments, asmanufacturersofC-SipanelscouldraiseASPstomakeupforthetariffcosts.InourinitiationwemodeledFSLR'sshipmentsgaining market shareto 2030,growing from~30% todayto almost50% late in the decade.We don't assumea highermarketshare AND an increase in ASPs, since the increase in ASPs could result in a slow-down of solar uptick. 2-We model 45x tax credits getting phased out beginning in 2030 as stated by current policy.We value the 45x credit streamthrough 2032 ata 9% discount rate.At $111/sh tax creditsmake up~50%of our valuation.We are watching for news aroundthe potential extension of tax credits, and will check and adjust as things change. EXHIBIT 4: However, as tax credits begin to get phasedout starting in 2030,margins will need to improvetomake upforthe lost cost offset EXHIBIT 3: In the near term, 45x tax credits provide aguaranteed cost offset that accountedfor75%of FSLR'smargin in 2025 projects,and add a gross up to capacity3-5years out,to account forhistorical underestimation of longerterm capacity adds.We grow FSLR's market share of this growing market. EXHIBIT 6: The EIA database includes only advanced stage projects. We find that this data has historicallyunderestimatedsolarbuildoutbyupto50%5yearsout cautious pace than historical data implies, to account for macro headwinds such as potential tariffs that wouldallow FSLR to gain market share We believe that even with growing share of a growing market, FSLR's margins would need to improve in order to make up forthe loss of 45xtax credits after 2030 and justify the current valuation.We give them credit for their contracted backlog (worth$10/sh in our view) and value the potential for more TOPCon licensing deals at $9/sh. Aquick note on the tech moat: FSLR Thin film technology higher temperatures. The CdTe supply chain is all sourced in the U.S., minimizing risk and tariffs, However, from an efficiencyperspective, the highest efficiency CdTe panel is ~23% compared to the highest efficiency C-Si panel at~27%.FSLR's series 6is at 19%, series 7is at 19.3% bigtechnical milestone in bringing costs down and efficiency up.First Solaracquired European startup Evolar in 2023to gainexpertise in Perovskite. Perovskite solar cells absorb more light, and hence are more efficient, with excellent charge transportproperties,but haven't made it to themarket at a commercial scale,mainly due to stability and degradation challenges.Thetimeline on Perovskite is uncertain,and the potential for a Si-Perovskite tandem solution to get commercialized fas