Core Viewpoint - The report from CMB International indicates that Xinyi Energy (03868) has experienced a greater-than-expected decline in electricity prices, increasing short-term electricity supply risks. Following a recent surge in stock price, it is now close to the target price, leading to a downgrade to a "Neutral" rating due to limited valuation attractiveness amid uncertainties [1]. Financial Performance - For the first half of the year, the company reported a revenue and profit increase of 7.7% and 23.4% year-on-year, respectively [1]. - Electricity sales volume grew by 22.7%, driven by strong sunlight, with utilization hours increasing by over 3% [1]. - The average electricity price, including tax, fell by 12% to 0.55 yuan per kilowatt-hour, which was below the firm's expectations [1]. Market Dynamics - The report highlights that the national photovoltaic power generation utilization rate decreased by 3 percentage points year-on-year to 94% [1]. - Due to the implementation of Document No. 136 and new policies for distributed photovoltaic systems, the mainland saw a significant increase in new photovoltaic installations, reaching 212 GW, a year-on-year increase of 107% [1]. - Despite the expected slowdown in installations after the rush, the surge in grid-connected capacity is anticipated to increase short-term photovoltaic supply risks [1]. Valuation Adjustments - The company has adjusted its earnings forecasts for 2025-2027 down by 6%, 7%, and 9% respectively [1]. - The valuation benchmark has been raised from 9.5 times to 10 times the price-to-earnings ratio, with the target price increased from 1.17 HKD to 1.28 HKD [1].
交银国际：降信义能源至“中性” 目标价升至1.28港元