DBS said 0757.HK 's price reduction promotion strategy had increased the company's deliveries of monocrystalline silicon and ingots at the expense of lower gross margins. DBS said that because its current operating rate is close to 100 percent, gross margin is slowly turning positive, and the price of polysilicon has been more stable recently. But that may take time to show, and the bank expects Sunshine to still post a loss in the second quarter. Due to the low predictability of earnings, DBS maintained its sell rating on the stock, with a target price of HK $2.00 (equivalent to 2.40 times share price / book value).

Sunshine Energy fell 0.75 per cent to HK $2.64 yesterday.