UBS Global Research lowered its target price for GCL-Poly Energy (03800) to HK$0.51 from HK$0.72 and maintained its "buy" rating.
The research house said GCL-Poly's share price is down 29.5% year-to-date, significantly underperforming the H/A-share solar sectors' 3.8%/32% increases in the same period.
UBS attributed its underperformance to its net loss in 1H, and the market's concern that the company may no longer be able to afford its high leverage ratio and financial expenses.
UBS thinks the market has priced in the downsides but GCL-Poly could turn around in 2H and the following years through its asset spin-offs and its new quasi-mono wafer product. Based on its 1H results, UBS cut its 2019-21 earnings estimates by 17-50%.
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