Morningstar - Q1 2022 - 25

production will increase 60% through 2030,
accounting for 32% of total French production.
The biggest contributor to renewables growth
in Europe is likely to be Germany; Morningstar
expects it to meet its target of 65% of
renewables in its power generation mix by 2030.
Unlike France, a high amount of new renewables
generation is needed to compensate for
coal and nuclear plant closures. In addition,
new renewables will displace some
output from remaining coal plants, whose
load factor will decline.
The second-largest contributor to renewables
growth will be Spain. The country aims to
double the share of renewables in its power
generation mix from 37% in 2019 to 74% in 2030.
Morningstar thinks this is within reach,
given the large potential for solar in Spain, the
need to replace closed nuclear plants, and
the large amount of flexible gas generation that
can be displaced by new renewables.
Morningstar estimates that gas plants' output
will recede 22% through 2030, the mildest
fall of conventional sources. Gas' share in the
power generation mix will decrease from
20% in 2019 to 15%. Gas output will increase in
countries like Germany, Poland, and Belgium
to displace coal or nuclear generation. However,
this will be more than offset by a decline
in countries like Italy and Spain, where gas is
currently the main generation source because
of the ramp-up in renewables generation.
Morningstar projects nuclear generation to
decrease 26% between 2019 and 2030, driving
a fall in its market share from 27% to 19%.
The biggest contributor will be Germany, whose
closure of its remaining 8 GW of nuclear
capacity by year-end 2022 accounts for 61% of
the total fall in nuclear volume by 2030.
Overall, Morningstar's forecasts for the evolution
of the EU power generation mix point to a
40% decline in CO2
combustion's CO2 emissions to fall 5.3% annually
on average thereafter.
Tancrede Fulop, CFA, is a senior equity analyst at
Morningstar EMEA.
Kogan's fall reflects the difficulty of building on
its runaway success early in the pandemic,
says Morningstar Australasia director of equity
research Johannes Faul. Then, the company
surged as consumers migrated online to order new
TVs and couches en masse. But now, consumers
are switching spending to services or returning to
brick-and-mortar stores as lockdowns ease.
As Lockdowns Ease,
Kogan Falls From Grace
AUSTRALIA + NEW ZEALAND
Australia
Kogan.com KGN:AU was booted from the
S&P/ASX 200 in a blow for the former star of
the lockdown economy.
The no-moat Internet retailer no longer numbers
among the 200 largest companies in
Australia by market cap after its share price
fell by more than half in 2021. The company was
removed before trading on Dec. 20 when
the market-capitalization-weighted ASX 200
was rebalanced.
The exit comes just over a year after Kogan joined
the ASX 200 in September 2020.
Share prices rose to a peak of AUD 24.75 in
October 2020, up from around AUD 7 before the
pandemic started. Shares never recovered that
high ground and shed 58% in 2021. Kogan's market
cap peaked at over AUD 2 billion in December
2020 before falling below AUD 1 billion a year
later. (All but seven of the stocks in the index had
market caps over AUD 1 billion in November.)
Morningstar's Faul says this presents investors
with an opportunity to pick up undervalued
shares. Sales rose above the high-water mark set
in 2020, with a 5% increase in the four months
to October 2021. Earnings are down as the
company steps up marketing spending, but Faul
expects this to translate into higher sales and
profits over the holidays.
" The rise was driven by the incredible increase in
sales, " Faul says. " They were a massive beneficiary
of the lockdown and people's reluctance
to go out. A lot of spending went in-house. "
Rise and Fall Kogan's monthly market capitalization reflects the past year's
spending trends.
AUD 3,000M
10/2020 Kogan joins ASX 200
2,000
1,000
emissions by 2030 versus 2020
and 45% versus 2019. After a sharp fall in CO2
emissions in 2020 caused by the pandemic-driven
drop in power production, Morningstar projects
emissions to rebound 3% in 2021 and for
04/
2020
09/
2020
Source: Morningstar. Data as of 11/30/2021.
02/
2021
07/
2021
11/
2021
854
morningstar.com/products/magazine
25
https://www.morningstar.com/stocks/xasx/kgn/quote http://www.Kogan.com http://www.morningstar.com/products/magazine
Morningstar - Q1 2022

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