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<Research>JPM: Worst Case for PV Sector Disorderly Involution; Daqo New Energy/ GCL TECH Still Likely to Be Ultimate Winners
Recommend 43 Positive 68 Negative 33 |
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The State Administration for Market Regulation (SAMR) said that the proposal by the China Photovoltaic Industry Association (CPIA) to establish a consolidation fund and allocate industry production quotas as non-compliant with the antitrust law, posing a setback to the industry's 'anti-involution' initiative, with expected negative share price reactions, JPMorgan issued a research report saying. However, based on China's 'anti-involution' development, the broker viewed this event as an adjustment rather than a reversal. In the worst-case scenario, disorderly involution integration may occur. DAQO New Energy (DQ.US), the only polysilicon company with a substantial net cash balance, and GCL TECH (03800.HK), the lowest cash cost producer, are still likely to be the ultimate winners in this situation. Therefore, the broker kept ratings at Overweight for the above two stocks, with target prices of US$38/ $1.7, respectively. AASTOCKS Financial News Website: www.aastocks.com |
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