BOCOM International Research raised its target price for Xinyi Solar (XYS) (00968) to HK$23.5 from HK$17.36 and reiterated its "buy" rating.
XYS estimated its attributable net profit to increase 75-95% to HK$4.23bn-4.71bn in 2020, significantly beating market expectation, mainly due to the increase in both sales volume and the average price of PV glass.
The research house said noted that the Ministry of Industry and Information Technology recently lifted restrictions on the expansion of PV (photovoltaic) glass capacity. XYS subsequently placed 300m new shares with net proceeds of HK$3.88bn. XYS currently has PV glass production capacity of 9,800tpd, and will put into operation 4 1,000tpd production lines in Wuhu, Anhui in 2021, and 4 1,000tpd lines in Zhangjiagang in 2022.
Besides, 12 1,000tpd lines in Wuhu and 4 1,000tpd lines in Beihai, Guangxi will start operation during 2022-24. XYS's production capacity will increase to 33,800tpd upon full production. BOCOM revised up its 2020-22 EPS forecasts by 8-13%.
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