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<Research>G Sachs Expects Domestic Polysilicon Prices to Fall, Raises GCL TECH (03800.HK) TP to $1.2
Recommend 40 Positive 72 Negative 34 |
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The stock prices of China's solar industry inclined since early-July, due to upstream price hike in response to anti-involution measures, with domestic polysilicon prices increasing by about 40% from July to August, according to Goldman Sachs' research report. In September, companies even guided further price hikes to offset additional costs arising from production quota controls and output acquisitions. The broker expected polysilicon prices could fall by 20% from the current price to RMB42 per kilogram, while module prices may remain at RMB0.67 per watt. Goldman Sachs believed that the market has overlooked the rapid cost reduction by tier 1 companies. Meanwhile, in the face of weak demand, enterprises still need to cut prices and reduce costs to gain market share. Regarding stocks, Goldman Sachs raised its target price for GCL TECH (03800.HK) by 26% to $1.2, due to significant improvements in output scale and profit outlook, but kept rating at Neutral based on valuation considerations. Within the industry, the broker preferred film, high-efficiency modules and granular polysilicon companies over glass. Therefore, Goldman Sachs rated FLAT GLASS (06865.HK)/ XINYI SOLAR (00968.HK) at Sell, and kept its target prices at $6.6/ $1.9, respectively. AASTOCKS Financial News Website: www.aastocks.com |
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