Kingwo Financial News | Citibank's research reports indicate that FLAT GLASS (06865) issued a profit warning, expecting last year's profit to drop by 61% year-on-year to between 0.938 billion and 1.076 billion yuan, which aligns with the market and the bank's expectations of 1.052 billion and 0.984 billion yuan respectively, and suggests a net loss of approximately 0.22 billion to 0.32 billion yuan in the fourth quarter of last year.
Taking into account the decrease in the sales price of Photovoltaic Glass, the bank has lowered its profit forecast for FLAT GLASS for this year and next year by 82.6% and 70% respectively, which is lower than the market expectation of between 75% and 91%. It is estimated that the company's profitability will drop to nearly breakeven this year, as its customers, the module manufacturers, are struggling to bear the high prices of Photovoltaic Glass amid oversupply leading to depressed module prices.
The bank expects that the installation capacity of Photovoltaics in China and globally will slow down this year after exceeding expectations last year. The bank has lowered the target price for FLAT GLASS from 12 Hong Kong dollars to 10 Hong Kong dollars, making it the lowest in the market, and has reiterated a 'Sell' rating, believing the valuation is unappealing.