Decarbonisation Enablers ETF Monthly report | November

21 November 2023

Decarbonisation Enablers ETF Key Takeaways | November


The S&P 500 dropped 2.5% in the last full week of October, bringing the broad index into correction territory: down more than 8% from the July high while CLMA had its worst month since inception almost four years ago and was down 11.9%. The Magnificent 7 rally lost strength and a third month of equity losses took place.


Not many reasons to be optimistic, but US consumer and economy remained resolute: The US debt ceiling agreement expires on November 11th, student loan repayments begin now, and the United Auto Workers strike came to an end but its affects will be felt by consumers. While there are not many reasons to be optimistic, the US consumer has remained resolute as unemployment in the county remains low and GDP growth remains high. In 3Q23 the US economy grew 4.9% despite tightening credit and higher interest rates. The resilience of the American consumer has been a big surprise this year.


Israel strikes back, geopolitical risk increases pushing volatility up: Geopolitical risks increased volatility in what has been an already turbulent year marked by macroeconomic uncertainty. The barbaric attack of Israel by Hamas that started on October 7th demonstrated (yet again) the challenges of running our global economy based on fossil fuels. On the first trading day following the attack, crude was up on fears of Iran involvement and what an oil embargo to the country would do to prices. Brent rose ca 5% on October 9th’s morning session while WTI was up more than 3.5%. Unlike the situation in 1973 when the world did not have alternatives to a fossil fuel-based energy system, we now do.


Fed keeps Fed Fund rates unchanged in the November 1st FOMC meeting: As most analysts expected, on November 1st the US Fed left rates unchanged for a second consecutive time. It is possible that the “higher for longer” level of rates will remain 5.25% to 5.5%. US consumers that have been resilient in terms of expenditures on services are expected to soon show signs of cooling down, as credit card rates are now on average above 20% p.a., rates on a 30-year fixed mortgage are above 8%, and a five-year new car loan is 7.6%, the highest in 16 years.






Tesla’s lacklustre 3Q23 results exacerbated concerns that the energy transition is losing steam. The long-time Tesla bull - Morgan Stanley analyst, Adam Jonas - turned bear(ish). Just in September Jonas wrote that Tesla was "much more than an auto company” and emphasized the value the company would create out of its network services, mobility, third-party battery, full-self driving licensing, energy and insurance businesses. Jonas was particularly excited about Tesla’s Dojo supercomputer. Now, just roughly a month after that, the third quarter earnings seem to have convinced Jonas that Tesla’s auto business is heading for trouble. That is because the analyst questions if Tesla will be able to deliver 2.25 million EVs in 2024, if potential further price cuts will be needed to entice buyers (translating into further margin reduction) and what it would do to margins. The average interest rate on new car sales is up 2% in the quarter, reaching 7.4%, while interest rates on used car loans increased ca. 2%, reaching 11.2%.  


Judging by share performance of the companies leading the energy transition, many with severe drawdowns this year, one could conclude that the energy transition is slowing down. Is Enphase (ENPH) - as a profitable, big player, and a leader in the microinverters segment, with technology that goes hand in hand with solar panels - worth less than half of what it was at the beginning of the year? Business schools teach students that a company is worth the present value of its future stream of free cash flow. Risk free rates went up fast and furiously this year, but that only justifies a small portion of the sell off. Is Enphase to see such a prolonged deterioration in sales and operating margins as IRA kicks in, Germany moves away from NatGas centralized generation and solar becomes top of mind for all countries, from India to Australia, Brazil, Spain and China most and foremost? The most likely answer is no, that this is a drop in sales as consumers and developers reset and adjust to higher costs in particular because of funding. The economic benefit of embracing a green solution like a solar rooftop remains solid (even with the headwinds) versus the increasing wholesale grid tariffs, but consumers with limited discretionary income are pausing on green adoption.





The uncertainty of a short-term acceleration in the adoption of green solutions increased in the “higher for longer” interest rate environment: A green rally is as inevitable as the energy transition itself, but catalysts are not yet in place. Markets focusing on short term trends based on comments made by Tesla and SolarEdge seem to be pricing in a prolonged deterioration in consumer adoption of green solutions. Friday October 20th was a bad day for decarbonizing teams as markets digested the news that SolarEdge is cutting its revenue forecast for 3Q23, from $920 million to $720 million. Its shares collapsed more than 29% on that day, together with Enphase (down 15%) and the cohort of solar names.


The US Fed raised interest rates by 525 bps in the last eighteen months and investors found solace in the large balance sheets of the Mega Tech stocks, moving away from longer duration strategies. Now that the 10-year Treasury is at the 5% level (for the first time since 2007), markets are processing the “higher for longer” scenario and analysing the sectors that suffer the most with higher costs of debt and equity. Below are five examples of subsegments in CLMA that have suffered material sell offs YTD:


  1. Solar manufacturers: Key solar PV names in China have seen their share price plummet, on fears of oversupply and subsequent price decreases in panels and solar cells. The top five names in China are increasing capacity in a material way; Jinko Solar (JKS), LONGi Green Energy (601012.SS, not in CLMA), JA Solar (002459.SZ, not in CLMA), Trina Solar (688599.SS, not in CLMA) and Canadian Solar (CSIQ) will increase their capacity by over 50% by year end, reaching 465 GW.  Adding smaller players, Chinese solar PV capacity is expected to reach 1,000 GW by December. 
  2. Wind players: Vestas (VWS.CO) and TPI Composites (TPIC) have been struggling for a while, as material investments to produce ever bigger wind turbines and more complex offshore wind equipment did not anticipate the Covid related supply chain disruptions and overall increase in costs of commodities, labour and transport. Wind developers too are facing challenges. For example, Danish wind leader Orsted (ORSTED.CO) is seeking an increase of ca 71% to an average $115.66/MWh for its clean energy contract prices in projects being developed in the state of New York. The increase in tariff is to compensate for higher costs, supply chain challenges and an increase in interest rates. New York’s goal is to get over 70% of its electricity needs from renewable resources by 2030, having 9 GW of offshore wind in operation by 2035. The change in wind (no pun intended) was a fast one, as in January this year New York State Energy Research and Development Authority (NYSERDA) received record requests for offshore wind solicitations, when developers submitted more than 100 different proposals.
  3. EV Charging Network names: Despite the acceleration in EV adoption, EV Charging network names have been selling off since Tesla announced earlier this year that it is opening up its fast-charging network to other automakers. Shares of EVGo (EVGO) are down more than 53% YTD, Chargepoint (CHPT) over 73% and Blink (BLNK) by more than 78%. Markets are not rewarding growth without profitability. Chargepoint’s most recent earnings results in 2Q22 were a robust 93% year over year, with revenues passing the $100 million level for the first time. 
  4. Green hydrogen names: The lack of profitability in fuel cell and electrolyser manufacturers is also prompting their shares to suffer. The whole cohort is suffering, with PlugPower (PLUG) and Bloom Energy (BE) beneficiaries of IRA not being immune to the concerns over fast Capex with no clear path to profitability. PlugPower is largest in market capitalization of this segment, but has never posted a positive net income in their ca. two decades of existence. While the extreme optimism with the green hydrogen economy prompted its shares to go up more than 900% in 2020 (supported by the Biden election and the expectation of a climate focused administration), this is a very different market and investors worry too about the availability of capital to keep supporting pre profitability green growth.
  5. Plant based alternative food: Oatly (OTLY) is down more than 72% YTD and Beyond Meat (BYND) more than 51%. Once seen as the key alternatives to dairy beverages, beef consumption and all their associated emissions, both companies did not foresee the level of inflationary pressure experienced in their raw materials. This was coupled with consumers not willing to pay a premium for their products and some also challenging the benefits of industrialized food over a Lancet diet that emphasizes the benefits of eating grains, fruits and vegetables.




Tesla can reduce prices as the key technology component in its EVs is deflationary, but analysts mostly see their pricing strategy as evidence of lack of EV demand in the US. Solar will have a record year as shown below, but the issue we face is that of a reset in the key parts of the IRR equation for ‘behind the meter’ and ‘front of the meter’ solar (and wind), namely costs of key components, balance of plants, transportation in general and of course interest rates. Mega oil mergers seen this month are a capitulation, not a sign of strength; however, politicians retreating on green policies, as the UK PM Sunak did last month, are myopic moves that add to the idea that fossil fuels will not be replaced. Several analysts are misinterpreting the selloff in green names as due to a slow(er) energy transition and/or structural issues across most of the technologies. Arjun Murti’s (Board member at ConocoPhillips) spin that “new stuff is in the midst of a significant downward correction” paints the sell off as a long-term weakness and evidence that fossil fuel is here to stay. Such narratives are just not accurate. Growth stocks and equipment financing are facing serious challenges of a fast and steep increase in interest rates. However, the world is adding 1 GW of solar a day, with the IEA upwardly revising its renewable energy deployment forecasts by 38% for the EU this June. By the end of this decade, it will be 3 GW a day. EV is no doubt the future of transportation. GM and Ford cannot compete. The mega oil mergers are a capitulation. It is a sign of desperation, a need to get bigger to have leverage. Geopolitical turmoil is solved by local, abundant, renewable energy, not by more fossil fuel.


Two mega mergers are announced a few weeks apart, big oil consolidates in a “united we stand, divided we fall” strategy: On October 23rd, Chevron announced that it is acquiring Hess Corp for $53 billion, a deal announced roughly two weeks after ExxonMobil announced that it is buying Pioneer Natural Resources for $60 billion. Although applauded by the likes of Arjun Murti  as a triumph of fossil fuel energy that is “here to stay”, an alternative view on these consolidation efforts (potentially more to come) is the opposite. Big E&P names are merging to increase lobbying focus and strength, while attempting to create value by cutting overhead costs in an earnings accretion move. It’s also a sign they are moving away from embracing green strategies and are sticking to the idea of keeping the cash cow assets from exploration, midstream to distribution. Stranded asset risks abound.   


Spain takes stock on its solar advancements and the challenges ahead: In the 10th annual gathering promoted by the Spanish Solar Association (UNEF), regulators presented and highlighted the state of the industry. Spain now has 23 GW of ground mounted solar PV capacity plus 5.5 GW of behind the meter solar rooftops.  Distributed renewable solar is on track to add between 1.7 GW and 1.8 GW this year. While the figure is material, it will be a 50% to 60% decrease over the solar rooftop capacity added in 2022, and higher interest rates are much. Battery distributed storage was presented as a key solution likely to experience growth in the near future while utility scale, in front of the meter larger scale storage is struggling. There are 15 GW of standalone storage projects and 1.5 GW in hybrid systems with renewables currently in the pipeline in Spain, with the goal of Spain's energy strategy (PNIEC) at 22 GW of storage by 2030. President of Red Electrica reminded the audience that “without transmission, there is no transition” and grid connection remains a serious bottleneck.


Solar short-term troubles continue, Maxeon lays off workers: The Singapore based company that focuses on solar panels for the distributed generation market said it will lay off 15% of its workforce by year end, a total of 750 employees. The company will provide more details on its plan, as well as the ongoing struggle with a US distributor that has defaulted on its payment, at the earnings call scheduled for November 15th.


Ferguson PLC (FERG, up 1.8% in September, up 29.53% YTD) The UK-based plumbing equipment supplier announced 4Q23 and full-year earnings beating market estimates. Although the company's revenues declined 1.7% in the fourth quarter, overall sales increased 4.1% to $29.73 billion from the same quarter last year. In comparison to FY2022, the company's gross margin fell slightly, from 30 basis points to 30.4%. Ferguson reported having $601 million in cash and equivalents at the end of the year. Additionally, the company announced a $0.75 quarterly dividend after switching from a semi-annual payment plan earlier in the fiscal year. This suggests a 9% rise over the same period last year, bringing the full-year dividend to $3.00, or a 9% growth overall. For FY2024, Management anticipates flat revenue growth, an adjusted operating margin of 9.2%–9.8%, and capex in the $400–450 million range.


California Governor visits China and reiterates climate joint effort: Governor Gavin Newsom’s agenda for his China visit evolved around climate change. He visited the first Chinese city to deploy an all-electric bus fleet, saw an offshore wind facility and toured Tesla’s Shanghai Gigafactory. He engaged in discussions with several regional leaders in China, setting climate goals and stating that California will always see China as a partner in climate change efforts.


China on the other side of the midpoint of 1,000 GW goal: China passed the midpoint of its 1,000 GW of solar installation capacity goal by 2026, reaching in September a total solar capacity of 525 GW, with ca 129 GW of new solar added to the grid in the first nine months of the year, with ca. 16 GW added just in September.


Europe on track to add 58 GW of solar this year: According to Rystad Energy the growth in solar installed capacity for the EU block will represent 30% growth over 2022, with Germany taking the lead increasing its solar capacity by 84% YoY. It is important to emphasize that ca. 70% of all these additions are ‘behind the meter’, rooftop capacity. The “local solar” addition is a trend across the continent, and in the words of the Rystad researcher “rooftop solar is driving the transformation of Europe's renewable energy landscape, from a niche market to a powerful force in reshaping the continent's energy mix.”


Biden administration announced the winners of $7 billion in funding for seven green H2 producers in the US: A Canary Media article points out that currently the production of green hydrogen in the US is negligible, so no carbon cement, steel and chemicals manufacturing in the US has decarbonized based on green hydrogen use. Noting that nobody is building green H2 production facilities in the US except for Plug Power (PLUG), that is expected to change as the DoE announced the winners of the seven grants that will prompt the creation of different green H2 hubs in the country.


Solar wafers and polysilicon go down in price; good news for energy transition but sign of margin pressures for producers: China’s Golden Week in October saw the stocks of solar panel manufacturers plunge on news of  lower solar wafer prices, with Mono M10 wafers reaching $0.34/pc having peaked above $0.75/pc earlier in April. Weaker downstream demand and accumulating inventory are the reasons pointed out as prompting the price decline. Polysilicon prices are also down significantly, from a more than $30/kg average in 2022 to ca. around $9/kg. The bigger picture is that Chinese solar manufacturers in general are increasing production capacity in a material way, while the EU and US are onshoring solar panel production and giving incentives to local manufacturing (as explained in point 1 above).


Chinese solar manufacturers increase production capacity in a material way, expected to double current capacity by end of next year, reaching 1,000 GW by 2024: The current drop in prices from polysilicon, to ingots, waters, solar cells and PV modules may indicate that supply is currently above demand. The economic model of the solar industry is one based on volume for somewhat commoditized products. Chinese companies have for decades been increasing capacity, innovating on products and driving prices down. Analysts frequently point out the deflationary curve for solar PVs. Those curves are achieved by steep increases in production capacity, often ahead of demand. The world is currently adding about 1 GW of solar a day, with demand to grow to 3 GW a day by 2030. According to Solar PV Magazine, the combined new solar PV manufacturing capacity that has been announced by companies in India, the US and Europe add up to 30 GW for polysilicon and 100 GW for module assembly, so undoubtedly the bulk of the supply will continue to come from China. If we are in an exponential adoption curve for solar, the utilization rate for solar PV manufacturing will increase and with that profitability. Solar adoption rates have been historically underestimated and may continue to be so, despite the incredible success that solar has achieved.


Telsa EVs are cheaper than average US ICE: After its most recent price cut the Tesla Model 3 post IRA rebate of $7,500 now has a sticker price of $31,490. The average price of a new ICE in the US is now $45,000. Starting in January 2024, the IRA rebate will not be money back from the IRS after an individual files its tax return, but rather a rebate at the time of purchase. In the first half of 2023, ca 7% of all cars sold in the US were electric, above the 5% tipping point of new technologies prompting mass “S” shape adoption curves. Sticker price equivalence between EVs and ICEs has long been expected to be the point that would trigger mass adoption in the US. We are now way beyond that point.


Vermont utility adopts both mitigation and adaptation to climate change: The first utility in the US to launch a plan for both adaptation and mitigation of climate change, Green Mountain Power announced this month a $250 million investment for undergrounding lines, plus a $30 million investment into energy storage. Coined “Zero Outages Initiative” the plan will provide residential batteries to clients in remote locations, which adds resiliency where it is most needed, with a longer-term goal to have all customers with energy storage assets. This is a model of how utilities can embrace and promote distributed assets, as opposed to resist and undermine adoption of behind the meter solutions.


CATL (not in CLMA as it is only listed in mainland China) starts operation of new battery facility producing one cell per second: With a global market share above 30%, CATL the Chinese battery behemoth in October started operations of a state-of-the-art new facility in Guizhou, China. This will be a 235+ acre site developed in two steps. The first phase just inaugurated has an annual production capacity of 30 GWh and required ca RMB 7 billion ($957 million) to develop. The second phase will double its capacity to 60 GWh/year. In the new assembly line, CATL can manufacture one battery cell per second and an entire EV battery pack in less than three minutes.




The IPCC has previously estimated the amount of unextractable fossil fuel compatible with a 50% change to cap global warming to 2o Celsius: it is ca. 80% of all coal reserves, 50% of NatGas and 1/3 of oil reserves cannot be burned and must be left in the ground in 2050. Are we on track to materially reduce consumption of these hydrocarbons? To be on track we need to accelerate the replacement of relevant solutions.  


IEA’s chief wrote in mid-September that the agency now forecasts that all three major fossil fuel commodities (crude, natural gas and coal) will see world demand peak within this decade. The full report and key findings were just published ahead of COP28; Fatih Birol commented on the importance of these numbers, as it means that “the world is at the cusp of a historic turning point.” The new numbers are evidence of the energy transition acceleration, as heat pumps, renewable energy, batteries and EVs replace the demand for coal, NatGas and crude in material ways. 


Replacing business as usual with solutions with a lower carbon footprint was seen as too expensive. That is a misleading view, as unlike fossil fuels that are commodities burned once to produce for one time electricity, heat or to move a vehicle, the core of the energy transition is based on two technologies: batteries and solar panels. For many years analysts have suggested that a pre-condition for EV adoption would be for sticker prices to be below that of Internal Combustion Engine (ICE) ones. Tesla has cut prices for their EVs a few times since end of 2022. The Tesla Model 3 now, post IRA rebate, is at less than $32,000 while the average price of a new ICE in the US is at $45,000. Batteries are the most expensive part of an EV and they have been in a deflationary curve; the more batteries are manufactured the cheaper they become. We are now at a point where 23 countries are now above the tipping point of 5% penetration of a new disruptive technology. In the US, the share of EVs in the overall passenger vehicle sales is 7%. In 2020 one in every 25 cars were EVs, in 2023 one in five new cars sold are EV, and the RMI expects that as early as 2026 one in two cars will be electric.


Similarly, solar panels too have benefited from a deflationary trend and with that comes broader adoption. In 2000 the world added 1 GW of solar energy, while in 2023 we are adding 1 GW of solar per day, and the IEA expects that by 2030 we will be adding 3 GW of solar per day. According to energy think tank Ember, there are now more than 25 countries that have produced more than 25% of their electricity from solar and wind alone for over a 30-day period. 


Markets are struggling to price in the conflicting trends and views on the energy transition. The narrative of the US equity market matters a great deal, as the capitalization of the companies just at the NYSE and Nasdaq is above $45 trillion, three times as much as that of the second largest market in China (including Hong Kong). While Europe and China are net importers of crude and NatGas, the US is a material producer of both and many companies, citizens and politicians continue to benefit materially from the fossil fuel economy, in particular when prices are at historical high levels and create additional free cash flow. 2024 may be the year when it becomes so abundantly clear that the world is moving away from hydrocarbons, with Germany and China leading the way, that the revenge of the old fossil fuel economy will come to a drastic end. However, we need some catalysts to be in place for that to happen. More on what that would look like in the next newsletter.




Tesla (TSLA, down -19.73% in October, up 63.05% YTD) One of the first green companies to report results, Tesla reported on October 18th its 2023 Q3 Quarterly Update Deck ( The share price fell almost 5% in after-hours trading on news of missing revenue and EPS estimates and a mixed earnings call.  CEO Elon Musk strongly emphasised the uncertain macro forecasts and high interest rate environment as areas of concern with the potential to reduce demand for auto purchases as the company continues to strive to increase affordability of its vehicles; current cost per vehicle is ~$37,500 (pre IRA rebates). Operating margin fell to 7.6% for the quarter, down from 17.2% as the company implemented factory upgrades to allow further unit cost reduction as well as investment in R&D projects such as AI, where they doubled their compute capacity vs. the previous quarter and the Cybertruck. Musk underscored that though the upcoming Cybertruck may be their “best product ever” there will be enormous challenges in reaching volume production and making it cash flow positive. Cash and investments increased by $3.0 billion QoQ to $26.1 billion. Energy storage for the quarter reached 4 GWh up 90% YoY while solar deployed was down 48% over the same period to 49 MW; Telsa attributed this decrease to the interest rate environment and California ending net metering.       


Enphase (ENPH, down -33.77% in October, down -69.97% YTD) The leader in microinverter technology reported 3Q23 results on October 26th  reflecting further sales deterioration. Revenue in 3Q23 reached $551.1 million, versus $711.1 million in 2Q23 and $634.7 million in 3Q22; consequently net income deteriorated to $113.9 million in 3Q23. The board approved in July a $1 billion share buyback program. Management gave guidance of further deterioration for 4Q23 and revenue guidance is between $300 to $350 million, partly the result of Enphase’s plan to undership to normalize inventory at reseller points, while operating margin guidance will be maintained at 40%. In the earnings call management explained that demand in Europe has reduced materially while California continued to fall in demand due to the NEM3.0 new legislation. The CEO explained that a few more quarters will be needed to revert the demand trend in CA, as consumers need to recalculate payback times and take into account CA utility rates that are going up ca. 22%, which will bring the payback time to a NEM3.0 solar + battery close to the NEM2.0 solar only payback time. The issue in Europe is due to inventory build-up by the installers and partners. Netherlands is their largest market in Europe and volume of sales was down 40% in 3Q23 over 2Q22, as the country has elections in November and is too changing net metering rules (of the 7 to 8 million homes in the Netherlands, 2.2 million have solar). Demand in the second largest EU market, France, was down by 34% QoQ followed by Germany down 32%. Management has been diversifying geographies and expanding into Brazil, Mexico, India, South Africa, Spain, Sweden, Denmark, Greece, South Korea, Taiwan, Indonesia, and Australia. Management is also putting effort into cutting OpEx, by 12% between 3Q23 and 4Q23, bringing OpEx back to 15% of sales. Cash position remains high at $1.8 billion. At a $10.8 billion market cap, ENPH trades at 22.4 forward P/E, 13.8 EV/EBITDA, 4.3 P/S (it was ca 19 end of 2022) and a PEG ratio of 1.0, while the 52 week change is down by ca 72%. The opportunity for ENPH is to push more complete installation solutions, including EV charging and batteries in the markets where regulators are promoting self-sufficiency as opposed to net exporting to the grid.


SolarEdge (SEDG, down -41.36% in October, down -73.2% YTD) After bringing down the market earlier in the month warning investors that results would be below expectations, the company reported 3Q23 financials on November 1st. How bad was the decline? Revenue in 3Q23 amounted to $725.3 million, down 27% from the previous quarter and down 12% over 3Q22, causing a net loss of $31 million in the quarter, a material deterioration over the $157.4 million in 2Q23. Guidance for 4Q23 shows that the worst is not over, as management expects the last quarter to see revenues between $300 to $350 million. SEDG currently trades at a market cap of $4.3 billion, a forward P/E of 16.9 and TTM P/S of 1.22 and has a cash position of $1.46 billion. Although Enphase trades at a premium to SolarEdge, it is clear that SEDG management has been pursuing more geographical exposure than ENPH.


NextEra Energy Partners (NEP, down -8.86 % in October, down -61.4% YTD) After the severe share drop following the announcement in late September that dividends would grow at a lower rate of 6% (from low teens) their results released on October 27th were much anticipated. Total operating revenue in 3Q23 was $367 million ($302 million reported in 3Q22), net income at $132 million in 3Q23 and adj. EBITDA at $488 million (versus $377 million in 3Q22). NEP now has a ca $2.5 billion market cap, trading at a 12.1% dividend yield.


Sunrun (RUN, down -23.17% in October, down -59.83% YTD) The largest residential solar rooftop installer in the US reported results on November 1st. CEO Mary Powell emphasized the increased focus on storage. Guidance for Storage Capacity to be installed is between 180 to 200 MWh in 4Q23 (a 108% to 131% YoY growth), while Solar Energy Capacity to be installed in 4Q23 guidance is between 220 to 245 MW (a full-year 2023 growth of 2% to 5%, below prior guidance of 10% to 15%). Revenue in 3Q23 was $563.2 million, ca. 10.8% below the $631.9 million posted on 3Q22. RUN posted a noncash impairment of $1.16 billion in goodwill in the quarter, associated with the book value of the Vivint acquisition, which brought their net loss to almost $1.5 billion. RUN trades now at a ca. $2.1 billion market cap, and 0.9 TTM P/S.


First Solar (FSLR, down -11.84% in October, down -4.9% YTD) The results of this US based solar panel manufacturer (no facilities in China) are very relevant for the industry, being so in line with the IRA. Moreover, FSLR is a barometer for the China-US trade tension, as a premium to the stock is a sign of expected restrictions to Chinese solar PV imports. Their 3Q23 results were released on November 1st with sales at $801.1 million (versus $628.9 million in 3Q22), gross profit of $367.2 million (versus $20.9 million in 3Q22), net income at $268.9 million (versus a loss of $49.2 million in 3Q22). Cash position at the end of the quarter was $1.5 billion and management kept revenue guidance for the year unchanged at $3.4 to $3.6 billion. YTD bookings were 27.8 GW with a mid to late-stage backlog of 32.5 GW. FSLR has a new facility in India starting operations in 4Q23, one in Alabama and the expansion of an existing Ohio facility coming online in 2024, and in Louisiana in 2025. At a $15.2 billion market cap, FSLR trades at 11 forward P/E and 5.1 P/S.


Stem (STEM, down -20.28% in October, down -62.19% YTD) The AI based optimizer of decentralized renewable assets posted results on Nov 2nd. It showed a record quarter with revenue reaching $133.7 million, up 34% over 3Q22 with bookings at a record $676.4 million, a 203% increase over Q3 2022. However, net loss in the quarter increased to $77.1 million, worse than the $34.3 million loss in 3Q22. STEM’s contracted backlog as of end September was $1.84 billion, up 125% from $817.2 million at the end of September last year. Storage under management is now 5 GWh and solar under management 26.3 GW. Management guidance is for positive EBITDA in 2024 and good revenue momentum bringing expected full year sales to $513 to $613 million. STEM now trades at a $515 million market cap, a TTM P/S of 1.23.


HelloFresh (HFGD.XC, down -27.3% in October, up 0.15% YTD) The Berlin-based meal subscription company outperformed sales projections with a 3.5% year-over-year revenue growth on a constant currency basis, reaching €1.80 billion. Nevertheless, the company experienced a 3.7% year-over-year decline when considering revenue in absolute Euros. During a typically sluggish quarter, the company's quarterly active customer base dropped from 7.51 million to 7.07 million, marking a 5.9% year-on-year decrease. Despite this, the company achieved an all-time high Average Order Value (AOV) of €64.2, reflecting 7.5% year-on-year growth when accounting for currency fluctuations. Quarterly adjusted core profit (AEBITDA) decreased by 3.7% year-on-year to 69.2 million euros but exhibited a 3.2% year-on-year increase. HelloFresh reported €6.5 million in free cash flow and held €466.6 million in cash and equivalents. Management reaffirmed its guidance for the entire year 2023, anticipating revenue growth for the HelloFresh Group to be in the range of 2% to 8% on a constant currency basis. They also expected an adjusted EBITDA for the HelloFresh Group for the full year 2023 between €470 million and €540 million. In September 2023, HelloFresh launched an advanced production facility in Goodyear, Arizona, positioning the company for future growth in the coming quarters. Additionally, the company successfully introduced its brand "Factor" in the Netherlands and Belgium, and it has plans to expand this brand to other European markets in 2024 and beyond. Furthermore, the management board of HelloFresh, with the approval of the Company's supervisory board, has decided to initiate a share buy-back program and may repurchase convertible bonds issued in May 2020. This initiative could involve a total volume of up to €150 million, excluding associated repurchase costs.


BYD (1211.HK, down -1.9% in October, up 23.26% YTD) The Chinese EV, battery and mobile component giant released 2Q23 earnings at the end of October. Unit sales of new energy vehicles were 824,001, up 53% YoY and 17.1% QoQ with 71,231 new energy vehicles sold in overseas markets during the third quarter, a surge of 323% on the year. Revenue for the quarter was RMB 162.2 billion, up 38.5% YoY and 15.9% on the previous quarter while gross margin continued to increase to 22.1%, up 3.2% YoY and higher than the 17.9% reported by Tesla for the quarter. The company finished the quarter with RMB 55.3 billion in cash and cash equivalents.


TPI Composites (TPIC, down -12.83% in October, down -77.22% YTD) The US wind turbine blade and automotive composite manufacturer delivered 666 wind blade sets or 2,892 MW in 3Q23, up from 570 or 2,542 MW for the same quarter in 2022. Net sales for the quarter were $372.9 million, down 3% YoY, though sales for the company's largest segment, wind blades, tooling and other wind related sales (collectively “Wind”) increased by $6.4 million, or 1.8%, to $362.2 million for the three months ended September 30, 2023, as compared to $355.8 million in the same period in 2022. The company was impacted across its automotive segment where bankruptcy of one of its clients, Proterra, meant that sales decreased by $7.9 million to $2.9 million. The Field service, inspection, and repair service segment also saw sales decreased by $10.1 million to $8.0 million due to a reduction in technicians deployed to revenue generating projects due to an increase in time spent on non-revenue inspection and repair activities. The company ended the quarter with $161 million of unrestricted cash. President Bill Siwek commented " Our team executed numerous cash flow initiatives to help us navigate a quarter that included a $22.6 million charge related to the bankruptcy of an automotive customer as well as an incremental $13.5 million charge for the warranty campaign" and that though “the wind industry continues to face a challenging near-term macro environment, our focus is on quality and preserving our balance sheet.” Guidance for net sales for the year was lowered slightly from $1.525 to $1.575 billion to $1.5 billion while guidance adjusted EBITDA margin was slightly worse at ~5% from ~2-3% and guidance for CAPEX remained at $40-45 million.


JinkoSolar Holding (JKS, up 7.31% in October, down -20.28% YTD) The Chinese solar manufacturer, currently the largest global player, reported material growth in 3Q23 with quarterly shipments of 22.6 GW, achieving a record 52 GW in the first nine months of the year, and an expected yearly shipment total of close to 75 GW. The quarterly shipment was up 21.4% over 2Q23 and up 108.2% YoY, with revenues in the quarter at $4.36 billion, up 63.1% YoY, which shows a deterioration in prices. Net income in the quarter was $181.4 million (a 4.2% net income margin), and the total cash position ended at $1.93 billion. Guidance for volume sales in 4Q23 was at ca. 23 GW. China remains their largest market representing 40% of shipments, followed by APAC and emerging market countries. At the current $1.6 billion market cap, JKS trades at a forward P/E of 3.03 and P/S of 0.11.


Goldwind Science and Technology Co., Ltd. (2208.HK, down -4.77% in October, down -20.09% YTD) The largest Chinese wind turbine manufacturer reported a sharp decline in net income, dropping by ca. 98% in 3Q23 versus 3Q22. Although revenue in the first three quarters of 2023 is up 32.4% YoY on sales of 8.9 GW of wind turbines, the material drop in profitability showcases the troubles of the global wind segment, and China is not immune to it. Higher SG&A, COGS and R&D put significant pressure on Goldwind’s bottom line. At a $4.6 billion market cap, Goldwind is trading at P/S of 0.33 and a trailing P/E of 13.


Wolfspeed, Inc (WOLF, down -11.77% in October, down -50.98% YTD) A US-based pure-play vertically integrated silicon carbide company, Wolfspeed saw its share price soar by 25% on the back of its 1Q FY2024 earnings. The company reported 4% year-on-year revenue growth, reaching $197.4 million compared to $189.4 million in the same period last year. Slower demand in the industrial and energy sectors, particularly in China and Asia, affected the company's power device revenue. However, the Mohawk Valley Fab contributed $4.0 million, a significant improvement from the previous quarter's $1 million. Wolfspeed aims to achieve a 15% utilization rate at Mohawk Valley by the end of 2QFY2024, working towards its goal of 20% utilization by June 2024. The company also achieved record revenue for its 150-millimeter substrates in the first quarter, indicating strong demand for high-quality substrates. The company's gross margins decreased, with a GAAP gross margin of 12.5% and a non-GAAP gross margin of 15.6% in 1QFY2024. The company ended the quarter with over $3.3 billion in cash but had a negative free cash flow of $517 million due to operating and capital expenses. For 2QFY2024, the company targets revenue in the range of $192 million to $222 million, with anticipated GAAP and non-GAAP net losses ranging from $131 million to $153 million and $71 million to $88 million, respectively. Wolfspeed's CEO, Gregg Lowe, on the earnings call, expressed confidence in the demand for electric vehicles, despite challenges in China and Asia. He emphasized that customer needs exceed their current production levels and the company's commitment to ramping up Mohawk Valley to reach 20% utilization. He stated that any market fluctuations observed currently will not impact the strong demand both in the short and long term, with interest from OEMs and Tier 1 companies in the US, China, and Europe. The company also secured significant design-ins and design wins in the automotive sector, totalling $2.2 billion and $1 billion, respectively, in 1QFY2024.


Source of all performance data: iClima Earth / Bloomberg. Data as of 31/10/2023. Additional sources available upon request. Please note that all performance figures are showing net data. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. 




Top 10 Best Performing Stocks in October and YTD




MTD (%)



YTD (%)

Novozymes A/S



Ecopro BM. Co., Ltd.






Uber Technologies, Inc.



JinkoSolar Holding Co., Ltd.



Li Auto Inc.






Tesla, Incorporated






XPeng Inc.



A. O. Smith Corporation



Exide Industries Limited



Corp Acciona Energías Renovables



Applied Materials, Inc.



Smart Metering Systems plc



Azbil Corporation



Clearway Energy, Inc.



Eaton Corporation plc



Landis+Gyr Group AG



Pentair plc




Top 10 Worst Performing Stocks in October and YTD




MTD (%)



YTD (%)

Li-Cycle Holdings Corp.



Blink Charging Co.



ChargePoint Holdings, Inc.



TPI Composites, Inc.



Maxeon Solar Technologies



SunPower Corporation



Oatly Group AB



ChargePoint Holdings



Alstom SA



SolarEdge Technologies



SolarEdge Technologies, Inc.



Oatly Group AB



EVgo, Inc.



Li-Cycle Holdings Corp.



Beyond Meat, Inc.



Enphase Energy, Inc.



Ceres Power Holdings plc



Alfen N.V.



Solid Power, Inc.



PowerCell Sweden AB





Source of all performance data: iClima Earth / Bloomberg. Data as of 31/10/2023. Additional sources available upon request. Please note that all performance figures are showing net data. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. 


Climate Change ETF Performance Table
As of 31.10.2023









iClima Global

Decarbonisation Enablers UCITS ETF








CLMA iClima Global Decarbonisation

Enablers Index








 Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 31/10/2023

Performance before inception is based on back tested data. Back testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such strategy would have been. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product. When you invest in ETFs and ETCs your capital is at risk.

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