HSBC Global Research lifted its target price for Xinyi Solar (XYS)(00968) to HK$5.8 from HK$4.7 and maintained its "buy" rating.
The research house assumed higher solar glass sales volume as it believes solar installation rush should result in higher demand. It expects that XYS will increase its market share with new production capacity ramp-up. It noted that XYS has guided its solar glass melting capacity to up 42% in 2020 with the ramp-up of its new production facilities.
HSBC also assumed slightly higher gross margin forecasts for solar glass. It estimated higher solar farm capacity addition as XYS had 1GW of projects under construction. Following these changes, HSBC's 2019-21 earnings were revised up by 7-24%.
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