• Reiterate Buy Entry – 16.5 Target – 20.3 Stop Loss – 14.9
  • Xinyi Solar Holdings Limited is an investment holding company principally engaged in the manufacturing and sale of solar glass. Along with subsidiaries, the company operates its business through three segments. The Sales of Solar Glass segment is involved in the production and sale of solar glass products. The solar glass products include ultra-clear processed glass (PV) raw glass, as well as other PV processed glass such as ultra-clear PV tempered glass, ultra-clear PV anti-reflective coating glass and back glass. The Solar Farm and Solar Power Generation segment is involved in the operation of utility-scale ground mounted solar farms. The Engineering Procurement and Construction (EPC) Services segment is engaged in the provision of EPC services for solar farms.
  • The confrontation between China and the US has been expanding to various sectors. Apart from semiconductor and electric vehicles, photovoltaic industry is the field where both superpowers are devoting energy and resources to popularise the application across the country. Recently, Biden’s administration banned import of solar panel material from China-based Hoshine Silicon Industry over forced labour allegations. The movement probably will trigger a surge in prices of solar-grade polysilicon. 
  • The China National Energy Administration proposed to push trials of distributed photovoltaic development on rooftops across counties and cities domestically. Meanwhile, Biden’s administration is pro-solar power. Investors in the US have been accumulating shares of related solar companies in the hope that the upcoming infrastructure plan will have some supporting budget for the sector.
  • Market consensus of net profit growth in FY21 and FY22 are 20.5% YoY and 4.0% YoY, which implies forward PERs of 25.8x and 24.8x. Current PER is 31.4x. Bloomberg consensus average 12-month target price is HK$15.57.
968 HK (Source: Bloomberg)