The European IRA option The makeup of a European IRA equivalent has dominated the conversation around Wacker over the past 6 months. We think investors have now largely categorised Wacker as the key winner within the European Chemicals sector. YTD the stock has been one of the top performers within our coverage. While there is more detail to come around country level initiatives, we think Wacker''s shares are still worth looking at within the context of new legislation and broader energy transition. Polysilicon: Finally a new dawn? Wacker''s polysilicon business has often been a drag on the company''s valuation given its inherent volatility. However, the business could stand to be one of the key beneficiaries of new European legislation; both from increasing demand for solar installations and support on the cost side. Regarding the latter, ensuring the competitiveness of a re-shored European solar chain has been a key theme around the European IRA. An Industry power price may help Wacker move further down the global cost curve in polysilicon and bring midcycle earnings to a higher level. In our view, this could eventually drive a re-rating in polysilicon''s valuation (we currently value this at 5x FY23 EV/EBITDA in our SOTP). We do not build in any benefit from European legislation into our base case TP (EUR170). European and US optionality It is worth remembering that Wacker is one of the few stocks in European Chemicals (alongside Air Liquide) which is a clear beneficiary of both the US and European IRA packages. Wacker has a dominant share in both US and European polysilicon production with demand set to increase considerably in both regions. A solid story elsewhere We view the European IRA as an attractive investment theme for Wacker. We also like Wacker''s underlying equity story too and rank the stock as one of our most preferred recovery plays in European Chemicals. See THEMATIC RESEARCH: The EU IRA: Subsidise me! published today.