We maintain a "buy" rating and a target price of HK $17.60. Our adjusted earnings per share forecast for 2022-2024 is HK $0.471 / HK $0.616 / HK $0.710. The target price is equivalent to 37.3x / 28.6x / 24.8x 2022 to 2024.

Net profit in the first half of 2022 fell 38.0 per cent year-on-year to HK $1905. The company's profit in the first half of 2022 is in line with its earlier profit warning. During the period, revenue from photovoltaic glass rose 22.6 per cent year-on-year to HK $8.09 billion, while revenue from photovoltaic power stations rose 5.5 per cent to HK $1.56 billion. During the period, the comprehensive gross profit margin fell 21.3 percentage points year-on-year to 34.1%, mainly due to the double-digit decline in glass prices and higher production costs, the company's photovoltaic glass sector gross profit margin plunged 24.5 percentage points to 26.7% during the period. The company announced that it will start the preparatory work for the listing of A shares on the gem of the Shenzhen Stock Exchange.

New solar installations worldwide will show strong growth from 2022 to 2024. Due to the active capacity expansion in the industry, we estimate that the market supply of polysilicon will reach 900kt / 1200 kt / 1500 kt respectively from 2022 to 2024. In the face of the global consensus on carbon neutralization and the surge in polysilicon supply, we expect that the number of new solar installations worldwide from 2022 to 2024 will be 250GW / 350GW / 450GW respectively, an increase of 49% / 40% / 29% respectively over the same period last year. The significant growth of new solar installations in the world in the next few years will provide strong support for the demand for solar glass.

Catalyst: the new capacity of polysilicon is put into production faster than expected, the new installed capacity of global solar energy is stronger than expected, and the solar glass industry has introduced new restrictions on capacity expansion.