Jingwu Finance | Zhongtai International issued a Research Report indicating that as of the end of November, XINYI SOLAR (00968) has cumulatively cold-repaired nine Photovoltaic Glass production lines, with a total daily production capacity of 7,000 tons (2,000 tons in the first half of the year and 5,000 tons in the second half). Among them, the two 1,000-ton production lines cold-repaired in the first half of the year have completed the engineering work but have not yet been reignited for production, while the remaining cold-repair work is still ongoing. In terms of new capacity, the company has completed the construction of six Photovoltaic Glass production lines this year, including (1) two 1,200-ton lines in Malaysia that were successively ignited for production in June and August; (2) two 1,000-ton lines in Wuhu, Anhui which were already ignited for production in March; (3) the remaining two 1,000-ton lines in Wuhu have not been put into production as originally planned. The company plans to ignite and put into production four of the 1,000-ton lines and one 900-ton line that were cold-repaired this year, as well as the newly constructed Wuhu production lines, based on market and company conditions at an appropriate time in the future.

The organization stated that the decline in Photovoltaic Glass prices continued in the second half of the year. As of December 11, the market average price for Photovoltaic Glass (3.2mm coated) was 19.25 RMB/square meter, down 27.4% and 9.4% from 26.5 RMB and 21.25 RMB at the beginning of the year and the end of September respectively. Nevertheless, the recent decline in prices of raw materials, soda ash, and Henry Hub Natural Gas will help mitigate the impact of the glass price reduction on the company's profits.

The organization has reduced its Net income forecasts for FY24-26 for shareholders by 16.9%, 24.4%, and 28.2% to HKD 2.98 billion, HKD 3.24 billion, and HKD 3.58 billion respectively. FY24 profits are expected to decline by 28.9% year-on-year, but FY25-26 are expected to rebound by 8.9% and 10.5% year-on-year. The company's adjustment of production line operations will undoubtedly affect short-term revenue but can alleviate the issue of oversupply in the market, aiding the recovery of the Industry in the medium term. The organization has raised the target PE for FY25 from 8.0 times to 9.0 times to reflect the recent stabilization of macro risks. Accordingly, the target price has been lowered from HKD 3.85 to HKD 3.22, corresponding to a downside potential of 0.5%. The rating remains at 'Neutral'.