Daiwa lowered the target price of Comdam Solar (0712.HK) from HK$1.75 to HK$1.50. Based on its ratio of 0.7 times stock price to book value in FY2011, it was 0.8 times previously, corresponding to a price-earnings ratio of 20 times in FY2012, which is higher than the average price-earnings ratio of the past two years (15 times). The bank said that Comdam Solar expects profit margin and delivery volume to recover in the fourth quarter of 2011. The procurement cost of composite polycrystalline compounds fell from 55 US dollars per kilogram in the third quarter of 2011 to 35 US dollars per kilogram, and the cost of non-similar raw materials fell 8.0% month-on-month in the fourth quarter. The bank pointed out that N-type wafers are expected to account for 70%-80% of shipments in the fourth quarter of 2011, higher than in the third quarter (50%), and that N-type single wafers have a premium of more than 10% over P-type wafers. Yamato also said that it will keep its rating of Camdam Solar outperforming the market because the bank believes that Camdam Solar's business performance in the second half of 2011 and 2012 will be better than that of competitors. The stock rose 1.7% yesterday to close at HK$1.17.