Jinwu Financial News | According to BOC International Development Research Report, the price of photovoltaic glass has continued to fall since May. Due to serious losses, the industry has continued to cut production since July, and the balance between supply and demand has now been achieved. The bank expects to continue to cut production and increase in module production in the future, glass is expected to enter the storage cycle, and the price rebound can be expected. Under pressure from losses, the industry is calling for supply-side reforms recently. The bank expects that the government may introduce policies such as raising energy consumption standards to speed up the clean-up of the supply and price recovery of photovoltaic glass, and benefit leading companies such as companies with lower energy consumption.
According to the bank, the bank cut Xinyi Solar (00968)'s profit by 25%/35%/29% in 2024-26 due to the fall in photovoltaic glass prices exceeding expectations and the company's production falling short of expectations. Compared to the lowest closing price on September 17, the company's stock price increased by only 18%, far lower than Follett's (06865) 47%. The company's price-earnings ratio/price-to-account ratio in 2025 is only 10.8/0.84 times, far lower than Follett's 24.5/1.18 times. The company's photovoltaic power generation business is relatively stable in profit and continues to provide cash flow, and the debt ratio is significantly lower than that of the photovoltaic glass industry. Therefore, when the industry all fall into losses and is unable to expand production, the company can still make an overall profit and buck the trend and expand production, and is in an advantageous position in competition. Due to the uncertain profit trend of the company, the bank switched to a market account rate valuation. Based on 1.03 times the 2025 market account ratio (compared to the 1.20 times discount of 14% given by the bank to Follett, the average discount level since this year), the target price was lowered to HK$4.04 (previously HK$4.09) and raised it to buy.
