The Zhitong Finance App learned that Credit Suisse released a research report to raise the rating of GCL Poly (03800) from “outperforming the market” to “neutral”, and the target price was drastically raised by 900% from HK$0.22 to HK$2.2.

According to the report, given the high spot price of polysilicon, it is currently about 110 yuan per kilogram (same below), while the average price in 2020 is 76 yuan per kilogram, it is expected that GCL will turn a profit in FY2021. It is believed that after recent stock price adjustments and current valuation, it is expected that the price-earnings ratio of 21 times in 2021 will become more reasonable.

The bank believes that the quality of granular polysilicon is still a key issue and will determine whether it can expand market share and overcome the challenges brought about by high purity requirements. After its solar farm subsidiary sold assets last year and the relatively large allotment of shares in January 2021, I believe the company's solvency risk has been reduced. Given the rise in polysilicon prices, it is expected that the 2021-22 cash flow may also increase. Based on higher polysilicon price assumptions, the 2021-22 fiscal year forecast was changed to net profit of about $2.5 and $2.65 billion.