[ET Net News Agency, 25 January 2018] CLSA lifted its target price for Xinyi Solar
(XYS)(00968) to HK$4.1 from HK$3.8 on a higher solar glass target PE, and maintained its
"buy" rating.
The research house lifted its 2018/19 core profit by 2.0%/2.2% on a lower soda ash cost.
CLSA said float glass prices remained high despite a slack season, and a rebound in solar
glass prices has been reflected in new sales orders, thanks to supply distortion. It sees
further upside potential for float glass given the possibility of further supply cuts,
while the risk of new solar glass capacity is partly offset by better industry
concentration. Besides, falling soda ash prices will help all glass makers'margins.
It noted that the soda ash price (about 25% of cost of float glass/solar glass)
retreated about 27% from the peak in November, and the spot price is about 10% lower than
the average 2017 level already. (KL)