J.P. Morgan lifted its target price for Xinyi Solar (00968) to HK$24 from HK$23.9 and maintained its "overweight" rating.
The research house said Xinyi Solar reported a strong set of FY2020 results. In addition to reaching near the top-end of the positive profit warning (+75% to +95%), the results were already slightly dragged by a one-off factor from the solar farm business (gross profit down 3%, due to heavier rainfall than in a normal year). The performance for the solar glass business beat CLSA's GPM estimate by 3pct, likely on better cost control and sales mix.
JPM lifted its FY2021/22 earnings estimates by 2%/5%. Contrary to solid fundamentals, CLSA said Xinyi Solar's share price has fallen by 18% since Chinese New Year due to rotation. It now sees an opportunity to buy on the dip.
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