Ralos New Energies AG

Ralos New Energies AG
Recommendation:
BUY (BUY)
Risk:
HIGH (HIGH)
Price Target:
EUR 7.30 (10.00)
Deteriorated valuation level of solar stocks
▪ The successful placement of 429,000 new shares from a capital increase
at a price of EUR 6.75 per share has resulted in gross proceeds of EUR
2.9m. The major shareholder ING Investment Management (Europe) B.V.
increased its interest in ralos from 27.4% to 29.5%. The remaining 189,000
shares were offered to German and international institutional investors. The
proceeds will mainly be invested in project development.
▪ The market sentiment for solar stocks has broadly deteriorated due to
(partly arbitrary) policy changes in several important PV markets. In the
German market, PV installations on farmland, which accounted for about
20% of the German market in the last two years, will simply drop out in
2011E. Furthermore, there is a risk that the upcoming 13% cuts in feed-in
tariffs will choke demand in 1Q 2011 and beyond if prices will not adjust
quickly enough, similar to 2009. After the corridor targeted by the EEG (2.5 -
3.5 GWp) has been exceeded by far in 2010, there are also fears of the
introduction of a hard cap. Most of the German PV players have therefore
shifted their focus more towards the foreign markets in 3Q 2010.
▪ ralos is already well positioned to face the new market conditions. In
Germany, ralos is only active in the market segment for rooftop PV systems
which will continue to offer attractive returns to customers as soon as prices
will have adjusted to the feed-in tariff cut in January. In the Global Large
Projects segment, ralos is not active in Germany anymore but has build up a
project pipeline in other attractive markets such as Italy during the last
years, and is also present in future growth markets such as the United Arab
Emirates. The previously so promising Czech market, however, will more or
less collapse due to the retroactive solar tax. As investor confidence has
already been shaken before by arbitrary policy changes in Spain, the
market’s awareness of political risks has increased. This is also reflected
in valuation levels of our peer group which has recently deteriorated. A
multiple-based valuation of ralos currently yields a value of EUR 6.87.
▪ We adopt a more cautious position regarding the years after 2011E, not
only for ralos’ German rooftop business, but also for international markets
due to foreseeable further cuts in subsidies and increasing competition in
the most attractive markets. We lower our price target to EUR 7.30
(before: EUR 10), but maintain our BUY recommendation.
Y/E Dec 31, EUR m 2008* 2009* 2010E** 2011E** 2012E**
Sales revenues 129.5 82.2 168.0 200.0 204.0
EBITDA 9.1 -8.5 10.7 15.4 13.7
EBIT 8.8 -8.9 10.2 14.8 13.1
Adjusted EBIT 7.3 -1.3 10.2 14.8 13.1
Net result 2.1 n/a 5.0 7.6 6.2
EPS 0.50 n/a 0.96 1.26 1.02
EBITDA margin 7.1% -9.7% 6.4% 7.7% 6.7%
EBIT margin 6.9% -10.2% 6.1% 7.4% 6.4%
EV/EBITDA 5.8 neg. 4.9 3.4 3.9
EV/EBIT 6.0 neg. 5.2 3.6 4.0
P/E 12.0 n/a 6.2 4.7 5.8
*2008: Pro forma consolidated IFRS figures (unaudited); 2009: unaudited IFRS figures.
**Estimates for 2010E-2012E: Approximated IFRS figures
Source: CBS Research AG, Ralos New Energies AG
26 November 2010
Share price (dark) vs. TecDAX
Source: CBS Research AG, Bloomberg, Ralos New Energies AG
Change 2010E 2011E 2012E
new old new old new old
Sales - 168.0 - 200.0 204.0 230.0
EBITDA - 10.7 - 15.4 13.7 16.7
EPS
- 0.96 1.26 1.35 1.02 1.47
Internet: http://bgi.ralos.de Sector: Renewable Energy
WKN: 520300 ISIN: DE0005203004
Reuters: BGHG.DE
Bloomberg: BGH GY
Short company profile:
Ralos New Energies AG, formerly BGI EcoTech AG, is a
holding company with investment focus in the field of
renewable energy, in particular photovoltaics. In 2008, the
company took over 100% of the non-listed ralos Group,
one of Europe’s leading providers of photovoltaic
systems. The company develops, plans, builds and
operates photovoltaic power plants – from small rooftop
systems for private customers (German Small Systems
segment) to large-scale solar power plants in the
megawatt range (Global Large Projects segment). As a
downstream player with established sales structures and
customer access, Ralos is well positioned in the
photovoltaic market.
Share data:
Share price (EUR, latest closing price) 5.95
Shares outstanding (m):*
5.8
Market capitalisation (EUR m): 34.6
Enterprise value (EUR m):** 52.7
Ø daily trading volume (6 m., no. of shares): 1,865
*excl. 0.27m shares from latest debt-to-equity swap (still without
entry in the commercial register)
**EV incl. estimated market value of minority interest
Performance data:
High 52 weeks (EUR): 9.00
Low 52 weeks (EUR): 5.52
Absolute performance (12 months):
Relative performance vs. TecDAX:
-27.4%
1 month -10.5%
3 months -23.8%
6 months -25.6%
12 months -27.1%
Shareholders:*
Major institutional shareholders 52%
Management/supervisory board 36%
Free float excl. management/superv. board 12%
*before capital increase announced in October 2010
Financial calendar:
Annual report 2010: 2011
Author: Martin Decot (Analyst)
Close Brothers Seydler Research AG
Phone: +49 (0) 69-977 84 56 0
Email: research@cbseydlerresearch.ag
www.cbseydlerresearch.ag
Please notice the information on the preparation of this document, the disclaimer, the advice regarding possible conflicts of interests, and the mandatory information required by § 34b WpHG (Securities Trading Law) at
the end of this document. This financial analysis in accordance with § 34b WpHG is exclusively intended for distribution to individuals that buy or sell financial instruments at their own account or at the account of others
in connection with their trading activities, occupation, or employment.

Ralos New Energies AG
Appendix
Changes in sales and earnings estimates
Source: CBS Research AG
Valuation summary*
Source: CBS Research AG
EURm
*Nota bene: All cash of ralos, including the cash inflow from the recent capital
increase, is assumed to be required for operations and therefore not considered as
excess cash in our valuation.
www.cbseydlerresearch.ag
2010E 2011E
2012E
new old new old new old
Sales - 168.0 - 200.0 204.0 230.0
EBITDA - 10.7 - 15.4 13.7 16.7
EBIT - 10.2 - 14.8 13.1 16.1
Net income - 5.0 - 7.6 6.2 8.3
EPS (EUR) - 0.96 1.26 1.35 1.02 1.47
Weighting Fair value
factor per share
Peer group valuation 50.0% 6.87
DCF valuation 50.0% 7.82
Fair value per share (EUR) 7.35
Close Brothers Seydler Research AG | 2

Ralos New Energies AG
Multiple-based valuation
Company name
*excl. 266,700 shares from latest debt-to-equity swap (still without entry in the commercial register); the correlating debt is included in the financial debt
Source: CBS Research AG, Bloomberg
Discounted Cash Flow Model
* Net capital expenditure excluding cash outflow due from earn-out agreement (purchase of Ralos); the corresponding debt is included in the financial debt
** All cash of ralos, including the cash inflow from the recent capital increase, is assumed to be required for operations and therefore not considered as
excess cash in our valuation.
***excl. 266,700 shares from latest debt-to-equity swap (still without entry in the commercial register); the correlating debt is included in the financial debt
Source: CBS Research AG
www.cbseydlerresearch.ag
P / E EV / EBIT EV / EBITDA
2010E 2011E 2012E 2010E 2011E 2012E 2010E 2011E 2012E
CENTROSOLAR Group AG 5.3 5.0 4.3 4.9 4.8 4.2 3.7 4.0 3.8
Payom Solar AG 4.9 4.3 3.7 3.1 2.8 2.7 3.0 2.7 2.7
Phoenix Solar AG 5.8 6.5 5.8 5.1 6.3 5.5 5.2 5.9 5.4
S.A.G. Solarstrom AG 8.3 5.5 6.3 8.2 5.9 5.6 6.9 5.0 4.7
Average 6.1 5.4 5.0 5.3 4.9 4.5 4.7 4.4 4.1
Median 5.5 5.3 5.1 5.0 5.4 4.8 4.4 4.5 4.2
Minimum 4.9 4.3 3.7 3.1 2.8 2.7 3.0 2.7 2.7
Maximum 8.3 6.5 6.3 8.2 6.3 5.6 6.9 5.9 5.4
EURm, except EPS (EUR)
EPS EBIT EBITDA
2010E 2011E 2012E 2010E 2011E 2012E 2010E 2011E 2012E
Ralos New Energies: Financial estimates by CBSR AG 0.96 1.26 1.02 10.2 14.8 13.1 10.7 15.4 13.7
Applied multiples: Median of the peer group multiples 5.5 5.3 5.1 5.0 5.4 4.8 4.4 4.5 4.2
Fair Enterprise Value - - - 51.3 79.7 63.2 47.3 69.5 57.9
- Net financial debt
-13.4
- Estimated market value of minority interest -4.7
Fair value of equity derived from each multiple 30.8 38.6 30.1 33.1 61.5 45.0 29.1 51.4 39.8
Average = Fair value of equity 39.9
No. of shares outstanding (m)*
5.8
Fair value per share (EUR) 6.87
PHASE 1 PHASE 2 PHASE 3
EURm 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E
Total output 168.0 200.0 204.0 214.2 224.9 236.2 245.6 253.0 259.3 264.5
Y-o-Y growth 92.7% 19.1% 2.0% 5.0% 5.0% 5.0% 4.0% 3.0% 2.5% 2.0%
EBIT 10.2 14.8 13.1 11.4 11.7 11.8 11.7 11.4 11.7 10.6
EBIT margin 6.09% 7.41% 6.41% 5.30% 5.20% 5.00% 4.75% 4.50% 4.50% 4.00%
Income tax on EBIT -2.9 -4.5 -4.0 -3.5 -3.6 -3.6 -3.6 -3.5 -3.6 -3.3
Depreciation and amortisation 0.5 0.5 0.6 0.3 0.3 0.4 0.3 0.2 0.1 0.2
Change in net working capital -5.0 -6.3 -2.1 -2.6 -2.7 -2.8 -2.4 -1.8 -1.6 -1.3
Net capital expenditure* -0.3 -0.4 -0.4 -0.4 -0.5 -0.4 -0.3 -0.1 -0.2 -0.2
Free cash flow 2.4 4.1 7.2 5.2 5.3 5.3 5.7 6.1 6.4 6.0
Present values 2.4 3.7 5.8 3.8 3.5 3.2 3.1 3.0 2.8 2.4 30.0
Present value Phase 1 11.9 Risk free rate 3.50% Target equity ratio 75.0%
Present value Phase 2 21.7 Equity risk premium 6.00% Beta 1.40
Present value Phase 3 30.0 Debt risk premium 3.50% WACC 10.13%
Total present value 63.6 Tax shield (Phase 3) 30.9% Terminal growth 2.00%
+ Excess cash** 0.0
- Financial debt/Liab. to associated persons -13.4
- Est. market value of minority interest -4.7 1.0% 1.5% 2.0% 2.5% 3.0%
Fair value of equity 45.4 9.13% 8.51 8.90 9.35 9.87 10.48
No. of shares outstanding (m)***
Sensitivity analysis
Terminal growth (Phase 3)
9.63% 7.82 8.16 8.54 8.97 9.47
5.8 WACC 10.13% 7.21 7.49 7.82 8.18 8.60
10.63% 6.66 6.91 7.18 7.49 7.84
Fair value per share (EUR) 7.82 11.13% 6.16 6.38 6.61 6.88 7.18
Close Brothers Seydler Research AG | 3
8

Ralos New Energies AG
Research
Schillerstrasse 27 - 29
60313 Frankfurt am Main
Phone: +49 (0)69 – 977 8456-0
Roger Peeters +49 (0)69 -977 8456- 12
CEO Roger.Peeters@cbseydlerresearch.ag
Martin Decot +49 (0)69 -977 8456- 13 Rabeya Khan +49 (0)69 -977 8456- 10
Martin.Decot@cbseydlerresearch.ag Rabeya.Khan@cbseydlerresearch.ag
Igor Kim +49 (0)69 -977 8456- 15 Ralf Marinoni +49 (0)69 -977 8456- 17
Igor.Kim@cbseydlerresearch.ag Ralf.Marinoni@cbseydlerresearch.ag
Manuel Martin +49 (0)69 -977 8456- 16 Enid Omerovic +49 (0)69 -977 8456- 19
Manuel.Martin@cbseydlerresearch.ag Enid.Omerovic@cbseydlerresearch.ag
Marcus Silbe +49 (0)69 -977 8456- 14 Veysel Taze +49 (0)69 -977 8456- 18
Marcus.Silbe@cbseydlerresearch.ag Veysel.Taze@cbseydlerresearch.ag
Institutional Sales
a division of Winterflood Securities Limited
Schillerstrasse 27 – 29 The Atrium Building / Cannon Bridge
60313 Frankfurt am Main 25 Dowgate Hill
London EC4R 2GA
Phone: +49 (0)69 – 9 20 54-400 Phone: +44 20 3100 0281
Raimar Bock +49 (0)69 -9 20 54-115
Head of Sales Raimar.Bock@cbseydler.com
Rüdiger Eich +49 (0)69 -9 20 54-119 Uwe Gerhardt +49 (0)69 -9 20 54-168
(Germany, Switzerland) Ruediger.Eich@cbseydler.com (Germany, Switzerland) Uwe.Gerhardt@cbseydler.com
Klaus Korzilius +49 (0)69 -9 20 54-114 Stefan Krewinkel +49 (0)69 -9 20 54-118
(Austria, Benelux, Germany) Klaus.Korzilius@cbseydler.com (Execution, UK) Stefan.Krewinkel@cbseydler.com
Markus Laifle +49 (0)69 -9 20 54-120 Bruno de Lencquesaing +49 (0)69 -9 20 54-116
(Execution) Markus.Laifle@cbseydler.com (Benelux, France) Bruno.deLencquesaing@cbseydler.com
Sales USA
111 Town Square Place
Suite 1500A
Jersey City, NJ 07310
Phone: +1 201 216 0100
Tom Higgins +1 201 706 6013
thiggins@hudsonsecurities.com
www.cbseydlerresearch.ag
Close Brothers Seydler Research AG | 4

Ralos New Energies AG
Disclaimer and statement according to § 34b German Securities Trading Act
(“Wertpapierhandelsgesetz”) in combination with the provisions on financial analysis
(“Finanzanalyseverordnung” FinAnV)
This report has been prepared independently of the company analysed by Close Brothers Seydler Research AG
and/ or its cooperation partners and the analyst(s) mentioned on the front page (hereafter all are jointly and/or
individually called the ‘author’). None of Close Brothers Seydler Research AG, Close Brothers Seydler Bank AG or
its cooperation partners, the Company or its shareholders has independently verified any of the information given
in this document.
Section 34b of the German Securities Trading Act in combination with the FinAnV requires an enterprise preparing
a security analysis to point out possible conflicts of interest with respect to the company that is the subject of the
analysis.
Close Brothers Seydler Research AG is a majority owned subsidiary of Close Brothers Seydler Bank AG (hereafter
´CBS´). However, Close Brothers Seydler Research AG (hereafter ´CBSR´) provides its research work
independent from CBS. CBS is offering a wide range of Services not only including investment banking services
and liquidity providing services (designated sponsoring). CBS or CBSR may possess relations to the covered
companies as follows (additional information and disclosures will be made available upon request):
a. CBS holds more than 5% interest in the capital stock of the company that is subject of the analysis.
b. CBS was a participant in the management of a (co)consortium in a selling agent function for the issuance of
financial instruments, which themselves or their issuer is the subject of this financial analysis within the last
twelve months.
c. CBS has provided investment banking and/or consulting services during the last 12 months for the company
analysed for which compensation has been or will be paid for.
d. CBS acts as designated sponsor for the company's securities on the basis of an existing designated
sponsorship contract. The services include the provision of bid and ask offers. Due to the designated
sponsoring service agreement CBS may regularly possess shares of the company and receives a
compensation and/ or provision for its services.
e. The designated sponsor service agreement includes a contractually agreed provision for research services.
f. CBSR and the analysed company have a contractual agreement about the preparation of research reports.
CBSR receives a compensation in return.
g. CBS has a significant financial interest in relation to the company that is subject of this analysis.
In this report, the following conflicts of interests are given at the time, when the report has been published: d, f
CBS and/or its employees or clients may take positions in, and may make purchases and/ or sales as principal or
agent in the securities or related financial instruments discussed in this analysis. CBS may provide investment
banking, consulting, and/ or other services to and/ or serve as directors of the companies referred to in this
analysis. No part of the authors compensation was, is or will be directly or indirectly related to the
recommendations or views expressed.
Recommendation System:
Close Brothers Seydler Research AG uses a 3-level absolute share rating system. The ratings pertain to a time
horizon of up to 6 months:
BUY: The expected performance of the share price is above +10%.
HOLD: The expected performance of the share price is between 0% and +10%.
SELL: The expected performance of the share price is below 0%.
Recommendation history over the last 12 months for the company analysed in this report:
Date Recommendation Price at change date Price Target
13 January 2010 Buy EUR 8.19 EUR 14.60
3 May 2010 Buy EUR 7.58 EUR 14.00
30 July 2010 Buy EUR 7.31 EUR 14.00
8 October 2010 Buy EUR 7.30 EUR 10.00
26 November 2010 Buy EUR 5.95 EUR 7.30
www.cbseydlerresearch.ag
Close Brothers Seydler Research AG | 5

Ralos New Energies AG
Risk-scaling System:
Close Brothers Seydler Research AG uses a 3-level risk-scaling system. The ratings pertain to a time horizon of up
to 6 months:
LOW: The volatility is expected to be lower than the volatility of the benchmark
MEDIUM: The volatility is expected to be equal to the volatility of the benchmark
HIGH: The volatility is expected to be higher than the volatility of the benchmark
The following valuation methods are used when valuing companies: Multiplier models (price/earnings, price/cash
flow, price/book value, EV/Sales, EV/EBIT, EV/EBITA, EV/EBITDA), peer group comparisons, historical valuation
approaches, discounting models (DCF, DDM), break-up value approaches or asset valuation approaches. The
valuation models are dependent upon macroeconomic measures such as interest, currencies, raw materials and
assumptions concerning the economy. In addition, market moods influence the valuation of companies.
The figures taken from the income statement, the cash flow statement and the balance sheet upon which the
evaluation of companies is based are estimates referring to given dates and therefore subject to risks.
These may change at any time without prior notice.
The opinions and forecasts contained in this report are those of the author alone. Material sources of information
for preparing this report are publications in domestic and foreign media such as information services (including but
not limited to Reuters, VWD, Bloomberg, DPA-AFX), business press (including but not limited to Börsenzeitung,
Handelsblatt, Frankfurter Allgemeine Zeitung, Financial Times), professional publications, published statistics,
rating agencies as well as publications of the analysed issuers. Furthermore, discussions were held with the
management for the purpose of preparing the analysis. Potentially parts of the analysis have been provided to the
issuer prior to going to press; no significant changes were made afterwards, however. Any information in this
report is based on data considered to be reliable, but no representations or guarantees are made by the author
with regard to the accuracy or completeness of the data. The opinions and estimates contained herein constitute
our best judgment at this date and time, and are subject to change without notice. Possible errors or
incompleteness of the information do not constitute grounds for liability, neither with regard to indirect nor to direct
or consequential damages. The views presented on the covered company accurately reflect the personal views of
the author. All employees of the author's company who are involved with the preparation and/or the offering of
financial analyzes are subject to internal compliance regulations.
The report is for information purposes, it is not intended to be and should not be construed as a recommendation,
offer or solicitation to acquire, or dispose of, any of the securities mentioned in this report. Any reference to past
performance should not be taken as indication of future performance. The author does not accept any liabili ty
whatsoever for any direct or consequential loss arising from any use of material contained in this report. The report
is confidential and it is submitted to selected recipients only. The report is prepared for professional investors only
and it is not intended for private investors. Consequently, it should not be distributed to any such persons. Also,
the report may be communicated electronically before physical copies are available. It may not be reproduced (in
whole or in part) to any other investment firm or any other individual person without the prior written approval from
the author. The author is not registered in the United Kingdom nor with any U.S. regulatory body.
It has not been determined in advance whether and in what intervals this report will be updated. Unless otherwise
stated current prices refer to the closing price of the previous trading day. Any reference to past performance
should not be taken as indication of future performance. The author maintains the right to change his opinions
without notice, i.e. the opinions given reflect the author’s judgment on the date of this report.
This analysis is intended to provide information to assist institutional investors in making their own investment
decisions, not to provide investment advice to any specific investor.
By accepting this report the recipient accepts that the above restrictions are binding. German law shall be
applicable and court of jurisdiction for all disputes shall be Frankfurt am Main (Germany).
This report should be made available in the United States solely to investors that are (i) "major US institutional
investors" (within the meaning of SEC Rule 15a-6 and applicable interpretations relating thereto) that are also
"qualified institutional buyers" (QIBs) within the meaning of SEC Rule 144A promulgated by the United States
Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the "Securities Act") or
(ii) investors that are not "US Persons" within the meaning of Regulation S under the Securities Act and applicable
interpretations relating thereto. The offer or sale of certain securities in the United States may be made to QIBs in
reliance on Rule 144A. Such securities may include those offered and sold outside the United States in
transactions intended to be exempt from registration pursuant to Regulation S. This report does not constitute in
any way an offer or a solicitation of interest in any securities to be offered or sold pursuant to Regulation S. Any
such securities may not be offered or sold to US Persons at this time and may be resold to US Persons only if such
securities are registered under the Securities Act of 1933, as amended, and applicable state securities laws, or
pursuant to an exemption from registration.
This publication is for distribution in or from the United Kingdom only to persons who are authorised persons or
exempted persons within the meaning of the Financial Services and Markets Act 2000 of the United Kingdom or
any order made there under or to investment professionals as defined in Section 19 of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005 and is not intended to be distributed or passed on, directly or
indirectly, to any other class of persons.
www.cbseydlerresearch.ag
Close Brothers Seydler Research AG | 6

Ralos New Energies AG
This publication is for distribution in Canada only to pension funds, mutual funds, banks, asset managers and
insurance companies.
The distribution of this publication in other jurisdictions may be restricted by law, and persons into whose
possession this publication comes should inform themselves about, and observe, any such restrictions. In
particular this publication may not be sent into or distributed, directly or indirectly, in Japan or to any resident
thereof.
Responsible Supervisory Authority:
Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin, Federal Financial Supervisory Authority)
Graurheindorferstraße 108
53117 Bonn
and
Lurgiallee 12
60439 Frankfurt
Schillerstrasse 27 - 29
60313 Frankfurt am Main
www.cbseydlerresearch.ag
Tel.: 0049 - (0)69 - 97 78 45 60
www.cbseydlerresearch.ag
Close Brothers Seydler Research AG | 7