New paper on BSE: will the green energy success story continue?

New paper on BSE: will the green energy success story continue?

On 30 November, trading began on BSE's Xtend market with the shares of ASTRASUN Solar Plc, founded in 1998 by Attila Keresztes, who has been a determining shareholder ever since. Initially targeting the food sector, the focus shifted to renewable energy in 2014. The company is mainly active in the design, construction, operation and maintenance of solar power plants, as well as in investments and developments related to solar panels, with a significant portfolio of foreign power plants. Portfolio asked the founder-owner about the plans and long-term opportunities in the context of the IPO.

The group has a strong history, and in the beginning, it was far from focused on renewables. What have been the milestones in ASTRASUN's life, how did it get to the point of going public?

Founded in 1998, ASTRASUN is one of the oldest companies founded by private individuals that has recently gone public - so we are not a classic start-up.

We've survived the most serious crises and I think we've always come out stronger, taking increasingly strong market positions.

When we started, we were a trading company, a mixed retailer with a focus on food. Constant market monitoring and personal curiosity led to a steady expansion of our activities, and by 2013 we were almost exclusively in renewable energy. At that time, it was difficult to decide whether solar panels would win or solar collectors: the main difference, to put it simply, is that the panels generate electricity and the collectors collect heat. In the end, the solar collector market, which was still very strong in the first half of 2010, got worsted, and we made the right decision to go with solar panels.

Our entry into this market has been extremely successful. We ordered our first few containers in 2013, cleared customs on 26 February and, with the EU's safeguard tariffs from 1 March, our stock value has practically doubled. We have grown steadily, first developing smaller projects, but now we have also been able to enter the market for municipal orders. In 2015 we built our first solar power plant, which was already over 300 kilowatts – one of the first in the country. We created the first solar PV system combined with a large energy storage system, and we also had a huge solar collector capacity alongside it, which to this day powers a large pig farm. In hindsight, I still think it was a very forward-looking project, and we have been experimenting and curious ever since.

From 2016, we also responded quickly to the introduction of the Mandatory Take-off Tariff (KÁT), with our own development projects obtaining for around a tenth of the permits at the time. We have also developed and sold a number of projects, but we have also maintained a portfolio of 38 units, which have become our own investments, and this is the backbone of our consistently stable revenue. This has allowed us to accumulate significant capital for expansion and growth: in recent years we have embarked on a major international expansion.

WE ARE PRESENT MAINLY IN ROMANIA, CROATIA, THE BALKANS AND THE SCANDINAVIAN COUNTRIES, AND THE GROUP IS INVOLVED IN A NUMBER OF PROJECT DEVELOPMENTS - we can talk about significantly larger projects than in Hungary, mainly related to solar energy. At the same time, we have also opened up to wind power projects, with the Scandinavian countries, which are reliably windy, being the main targets for expansion.  


What are the sources of funding for expansion, for foreign projects that are significantly larger than inland ones?

Up to now, international expansion has been almost exclusively financed from our own resources, but this year we have reached the point where we have to rethink our financing. Green energy is an extremely capital-intensive sector, 1 megawatt of energy can be achieved with an investment of roughly 1 million Euro, and we are talking about hundreds of megawatts. The fact that we are listed on the Budapest Stock Exchange is important both from a financing point of view and also because it allows us to open up to the larger international financial institutions with the capital injection and to develop financing opportunities with their help. Our experience is that they are willing to finance large-scale projects.

This is mainly because of stability: we are diversifying in several countries and we expect to soon have much more revenue from foreign markets than from Hungarian, because our plan is to become a major player in the main European markets thanks to our developments. This has been a conscious construction in recent years, precisely to reduce risk. We are also looking for new technologies with a similar aim, for example, we are developing wind power in addition to solar panels and we have big plans for battery energy storage.

There is also intensive R&D activity within the group: what are the main directions of these projects?

Of course we are also intensively involved in R&D, with a focus on hydrogen technology. We see huge potential in this field, far beyond the automotive industry. Also in the context of our R&D activities, we have signed a contract with one of the leading universities in Hungary to set up a separate department with them and to launch joint R&D projects.

As we are already a listed company, I would not go into more detail than that, but we have strong R&D intentions.

The regulatory environment in Hungary has changed significantly recently: how conducive is this to a large-scale development in green energy?

The Hungarian regulatory environment currently only allows for a limited development of new projects. However, this is a conscious legislative decision and not a surprising process for those with a deeper knowledge of the market. In my opinion, the market should have been restrained years ago, and not so quickly and so many demands should have been accommodated in order to make the inland system more organic, and at the same time to implement the necessary grid upgrades, energy storage, balancing, i.e. to make the whole Hungarian production more diversified.

At present, the electricity grid in Hungary is tied up for several years. We also have ongoing projects that are in the final stages of permitting, and I expect that there will be many projects on the market that will be developed to "ready to build" level - we will consider whether to enter into these.

Why is now the right time to go public? Could the BSE be the first step towards other stock exchanges?

The listing was preceded by a conscious building process, a planning process of almost three years, which I believe has built the company to a credible level of maturity. A stock exchange-ready company has now gone public on BSE Xtend.

We are determined to make the paper liquid, we expect a lot of small investors rather than institutional investors. We have come to the stock exchange to raise capital, so we would also like to actively use the fundraising opportunities where appropriate.


and we are working towards an early entry into the Standard category of the regulated market. But we will be satisfied only when our papers also appear and perform well in the Premium category.