Jinwu Financial News | According to BOC International Development Research Report, polysilicon prices have dropped sharply since the end of March, falling below the cash costs of all companies except GCL Technology (03800). The company is expected to lose about 200 million yuan in the second quarter.

According to the bank, with the sharp rise in electricity prices in major polysilicon production areas such as Sichuan, the cost advantage of granular silicon with low electricity consumption has expanded. At the same time, with the improvement of quality, the discount price of granular silicon has been drastically narrowed, and the profit advantage is prominent. The bank expects that the current serious losses in the industry will be difficult to sustain. Polysilicon prices have bottomed out and will rise again in the 3rd quarter.

The bank indicated that due to product prices falling more than expected, the bank lowered its profit forecast. Performance at the bottom of the cycle was under pressure. The bank gave the polysilicon business a valuation of 35.5 billion yuan based on a market value of 920 million yuan per 10,000 tons of production capacity [50% discount compared to A-share Daquan Energy (688303 CH)], referring to the primary market and listed companies in the same industry, and gave a valuation of 5 billion yuan to new businesses such as perovskite and silane gas, totaling 40.5 billion yuan, and lowered the target price to HK$1.62 (originally HK$1.67). The bank is optimistic about the company's long-term development prospects and continued increase in market share, but after the recent sharp rise in stock prices, the bank believes that short-term valuations have limited appeal and downgraded the rating from buying to neutral.