Goldman Sachs: XINYI SOLAR (00968) Rated as "Buy" with Target Price Lowered to HK$3.9

Goldman Sachs released a research report stating that XINYI SOLAR (00968) has a "buy" rating, with a 3% to 5% reduction in the company's EBITDA forecast for the years 2024 to 2030, and a target price lowered from 4 Hong Kong dollars to 3.9 Hong Kong dollars. The company recently issued a profit warning, forecasting a 70% to 80% decrease in net profit for the fiscal year ending December 31, 2024 compared to 2023. This is mainly due to more production lines entering intensive cold repair periods last year, leading to an increase in fixed asset impairments, causing a drag on performance in the second half of last year. The forecasted net loss for the second half of last year is 600 million to 1 billion Chinese yuan, lower than Goldman Sachs and market peers' earlier predictions of a net profit of 300 million to 1 billion Chinese yuan. Looking ahead, Goldman Sachs advises investors to focus on the company's fundamentals, including the progress of production reduction in the first quarter of this year, and the possibility of seasonal demand recovery in the second quarter. They believe this can accelerate inventory digestion, restore industry profitability, and expect XINYI SOLAR to gain more market share in the long run by leveraging cost advantages and overseas expansion.