Jinwu Financial News | According to the Sino-Thai International Development Research Report, by the end of November, Xinyi Solar (00968) had cold-repaired nine photovoltaic glass production lines, with a total daily production capacity of 7,000 tons (2,000 tons in the first half of the year and 5,000 tons in the second half). Among them, the two 1,000-ton production lines that were cold repaired in the first half of the year have been completed, but they have not been restarted and put into operation; the rest of the cold repair work is still ongoing. In terms of additional production capacity, the company has completed the construction of six photovoltaic glass production lines this year, including (1) two 1,200-ton ones in Malaysia were ignited and put into operation in June and August; (2) the two 1,000-ton ones in Wuhu, Anhui were already started in March; and (3) the remaining two 1,000 tons in Wuhu were not put into operation according to the original plan. The company plans to ignite and put into operation four of the 1,000-ton and 900-ton production lines that were cold repaired this year, as well as the newly built Wuhu production line in due course in the future according to the market and the company's own situation.
The bank said that the price of photovoltaic glass continued to decline in the second half of the year. As of December 11, the average market price of photovoltaic glass (3.2mm coating) was RMB 19.25 per square meter, down 27.4% and 9.4% from RMB 26.5 and RMB 21.25 at the beginning of the year and the end of September, respectively. Despite this, the recent decline in the prices of raw materials soda ash and natural gas has helped reduce the impact of glass price cuts on the company's profits.
The bank lowered FY24-26 shareholders' net profit forecasts by 16.9%, 24.4%, and 28.2% to HK$2.98 billion, 3.24 billion, and HK$3.58 billion, respectively. FY24 profit fell 28.9% year over year, but FY25-26 rebounded 8.9% and 10.5% year over year, respectively. The company's adjustment of production lines will undoubtedly affect short-term revenue, but it can mitigate the problem of excessive market supply and help the industry recover in the medium term. The bank raised the FY25 target price-earnings ratio from 8.0 times to 9.0 times to reflect recent stabilization of macro risks. The bank accordingly lowered its target price from HK$3.85 to HK$3.22, corresponding to a 0.5% downside. Maintain a “neutral” rating.
