＜Research＞CLSA Reduces TPs on FLAT GLASS & XINYI SOLAR, Cuts Industry Earnings Forecasts

　　In a recent report, CLSA lowered its earnings forecasts for the PV stocks it covered, pointing out that the prices of polysilicon products for the entire PV industry are currently below cash cost, and are expected to recover moderately to near-cash-cost levels in the next one to two quarters. Further improvements in the industry ecosystem will require stable polysilicon prices and a better demand outlook, which is expected to materialise by 2025 or beyond, the broker projected.

　　CLSA axed its target price on FLAT GLASS (06865.HK) -0.320 (-2.689%) Short selling $17.40M; Ratio 32.426% H-shares from $23.5 to $14 and cut its target price on XINYI SOLAR (00968.HK) +0.020 (+0.541%) Short selling $31.47M; Ratio 31.427% from $5.7 to $4.5, both with Outperform ratings. The broker believed upstream polysilicon producers could benefit from capacity withdrawal, but the downstream as a whole is unlikely to regain profitability.

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　　In addition, CLSA initiated GCL TECH (03800.HK) -0.010 (-0.870%) Short selling $22.57M; Ratio 17.057% at Outperform, which is well-positioned to benefit from low-cost production operations and improved supply and demand for polysilicon. The broker also believed that all mainstream PV manufacturers would record losses this year. A stress test by the broker showed that the entire PV sector may burn cash totalling more than RMB195 billion this year.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-19 16:25.)

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