PVCS.L Share News (PVCS)

Solar panel silicon wafer maker PV Crystalox Solar (PVC) has seen its share price more than halve since May 2009 and Nomura Securities thinks the decline has gone too far.'We reiterate our Buy rating as we see the stock as undervalued vs its peers given that we see upside from strong markets and an improving cost position,' Nomura analyst Catharina Saponar said.'We think PV Crystalox should continue to benefit from strong end markets, while it still has scope to pass through pricing pressure to its subcontractors and reduce its in-house operating costs via optimisation of consumables, procurement and operational yields,' Saponar reasons.Nomura is banking on the ramp up of polysilicon production at PVC's Bitterfeld facility putting downward pressure on costs, while it is encouraged by the volume guidance for the first half of 2010, which was 'marginally more positive' than Nomura's forecast.'This, however, was offset by a slightly larger ASP [average selling price] cut, leaving our forecasts largely unchanged,' Saponar added.'A 5% dividend yield with a payout strongly underpinned by the company's net cash position make the stock look attractive against its upstream and broader solar peers, in our view. Net cash is 30% of PVC's market cap,' Nomura noted.