SECTOR HEAD: BRYAN CONNELLY & JESSE HOUSR. ANALYST: BEN SMITHJR. ANALYSTS:

SECTOR: EnergyCOMPANY: GT Solar International Inc.

INVESTMENT RECOMMENDATION

GT Solar International Inc.Recommendati

on BUY

Current Price $10.001 Yr Target

Price $14.96

% Upside 49.6%

Vv As of April 11, 2011ccc

Beta 1.33Market Cap 1.3 Billion

1-Aug-08 1-Nov-08 1-Feb-09 1-May-09 1-Aug-09 1-Nov-09 1-Feb-10 1-May-10 1-Aug-10 1-Nov-10 1-Feb-11-40

-30

-20

-10

0

10

20

3 Yr GT Solar Returns

SOLR S&P 600

Retu

rn

3

COMPANY

NYSE: SOLR• Lead supplier in Solar

Manufacturing equipment

• Poly-silicon Production (Reactors)

• Solar Wafer Production (Furnaces)

• Sapphire Production*(Furnaces)

Photovoltaic (CDV Reactors)

27%

Polysilicon (DSS Furnaces)

24%

Sapphire9%

Corporate Services40%

Newly acquired

4

INDUSTRY SNAPSHOT

BUSINESSTwo Segments

Forms Solar WafersCreates Polysilcon

Directional Solidification System

(DSS) Furnaces

Chemical Vapor Deposition (CVD)

Reactors

Photovoltaic SegmentPolysilicon Segment

* Excludes Sapphire Segment

WHY SOLAR?• Growing solar EOR (enhanced oil

recovering) facilities• In 2010 67% increase in revenues

and 20.5% decrease in costs, making it fasting growing industry in energy sector

• Decrease need of incentives in the future, due to continuous price drops.

• Market based incentives like Solar Renewable Energy Credits (SRECs)

– Cap and trade credit granted to firms with installed solar capacity that can be sold on spot markets

• U.S DOE “SunShot Initiative” -$112.M over 5 years to support development of advanced PV related manufacturing

– Aims to reduce total cost of PV systems to $1 per watt by 2020 (75% reduction) enabling competition with other form of energy

– Intended to lay groundwork to create a world-leading industry

7

WHY GT SOLAR?

• Participates in multiple growth Industries

• Market leader in critical equipment for solar industry

• Diversification through high involvement in both the semiconductor, solar manufacturing and LED industries– Sapphire materials used

in LED applications, defense, medical, research and aerospace industries

8

5 YEAR TREND

RISKS• International Business Nature – 81%

Revenue from Asia• Few Products offered – 91% of Sales• Few Customers – 62% revenue from

four customers• Government budgetary concerns could

decrease subsidies/incentives for solar.– Renewable Energy budget is decreasing, was at $6B in

2009 and has been cut down to $2.5B.

Source: WSJ, Businessweek, EERE

FUNDAMENTALS

(in millions) 2006 2007 2008 2009 2010

Revenue - 60.1 244.1 541 544.2

Rev Growth 60.5% 28.4% 306.2% 121.6% 0.6%

Gross Margin 39.5% 39.6% 37.9% 39.7% 40.2%

EBITDA Margin -30.6% 9.2% 24.8% 30.5% 31%

FUNDAMENTAL FORECASTS

(in millions) 2011(e) 2012(e) 2013(e) 2014(e) 2015(e)

Revenue 1,006.8 2,114.2 4,439.9 8,435.7 14,340.7

Rev Growth 85% 120% 120% 90% 70%

Gross Margin 41% 41% 41% 41% 41%

EBITDA Margin 32.5% 32.5% 32.5% 32.5% 32.5%

RISKS & SENSITIVITIESInternational Business

Few Customers

Limited Number Products

All Occuring Worst Case

$5.00 $7.00 $9.00 $11.00 $13.00 $15.00 $17.00

$14.61

$13.74

$13.39

$11.48

Price per Share

VALUATION

13

Year 2011(e) 2012(e) 2013(e) 2014(e) 2015(e)

FCF ($MM) $(88.47) $69.06 $(78.17) $225.24 $172.06

WACC 8.15%

Growth Rate 2.5%

DCF Value $196.34

1yr Target Price $17.60

DCF – 50% Comps – 50%

EV/EBITDA 6.2x1yr Target Price $10.06

P/AFFO 22.4x1yr Target Price $13.30

1yr Target Price$14.96+49.6%

RECOMMENDATION

Solar Ahead:• Massive increases in total installations and

revenue• Greater concern for climate change• Mandatory targets for renewable energy

14

Digital Realty Trust Inc.Recommendatio

n BUY

Current Price $10.001 Year Target

Price $14.96

% Upside 49.6%

QUESTIONS?

16

EXHIBITS

16

COMPARABLES

Company Net Income Multiple I Multiple II

EV/EBITDA P/E

GT Solar 156.1 4.0x 9.0x

Trina Solar Limited 311.5 3.4x 6x

MEMC Electronic Materials Inc. 34.4 15.2x 87x

Sunpower Corp. 166.6 5.3x 9x

Suntech Power Holdings 85.6 6.2x 19x

ReneSola Ltd. 169.0 3.3x 5x

CLIENTS

Customers % Total Revenue

LDK Solar Co., Ltd 20%

OCI Company Ltd 17%

Yingli New Energy Resources Co., Ltd. 14%

Glor Silicon Energy Co., Ltd. 11%

Sum Total 62%

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Products

19

DSS Photovoltaic Furnace CVD Polysilicon Reactor