Citigroup: Maintains "Neutral" rating on XINYI SOLAR (00968) with target price raised to HK$3.6

Citibank released a research report stating that due to concerns about the threat of new production capacity in the second half of this year, it maintains a "neutral" rating on XINYI SOLAR (00968). The H-share target price has been raised from HK$3.1 to HK$3.6. Following the company's earlier earnings warning, considering more impairment losses and lower glass sales profit margins, the bank has lowered its net profit forecast for XINYI SOLAR for the fiscal year 2024 by 53% and for the fiscal years 2025 to 2026 by 32% to 35%. The bank indicated that it is observing XINYI SOLAR positively for the next 90 days, expecting an increase in demand driven by seasonal demand recovery, as well as a rise in CECEP Solar Energy glass prices before June 1st. The bank estimates that with the current price of 2.0mm glass at 12 yuan per square meter, XINYI SOLAR's gross margin may be in the single digits, with limited downside potential.