GCL TECH(03800) 交银国际证券·2024-08-31 03:42Investment Rating - The investment rating for the company is Neutral, with a target price of HKD 1.31, representing a potential upside of 12.9% from the current price of HKD 1.16 [1][2][18]. Core Insights - The company's performance in the first half of the year was below expectations, with a net loss attributable to shareholders of RMB 1.48 billion, slightly exceeding the forecasted loss of RMB 1.45 billion. The second quarter loss was RMB 1.51 billion, which was lower than anticipated [1]. - The production optimization of granular silicon is expected to significantly reduce costs after completion, with cash costs projected to fall below RMB 30,000 per ton by the end of the year, which is substantially lower than the approximately RMB 40,000 per ton of leading competitors [1]. - The company has initiated a systematic optimization project for its granular silicon production line, which, despite causing a temporary decrease in operating rates, has led to substantial improvements in production metrics [1]. - The company holds the largest global capacity for silane gas, with sales accounting for one-third of the national market, and is expected to become a new profit growth point as demand increases [1][2]. Financial Summary - The company reported a revenue of RMB 35.93 billion in 2022, which is expected to decline to RMB 33.7 billion in 2023, and further drop to RMB 16.97 billion in 2024, reflecting a year-on-year decrease of 49.7% [5][19]. - The net profit is projected to be a loss of RMB 1.91 billion in 2024, with a gradual recovery expected in subsequent years, reaching a profit of RMB 2.63 billion by 2026 [5][19]. - The average selling price per ton of granular silicon is expected to decrease significantly from RMB 24,400 in 2022 to RMB 4,100 in 2024, with production costs also declining from RMB 5,400 to RMB 3,800 per ton over the same period [7][19]. Market Dynamics - The price of polysilicon has stabilized after a significant drop, with prices for dense material and granular silicon per ton falling from RMB 68,000 and RMB 61,000 to a low of RMB 39,000 and RMB 36,000 respectively. The market is now approaching a balance between supply and demand [2]. - The company is expected to benefit from its cost advantages and improve its market share, although valuation improvements are contingent on a significant recovery in polysilicon prices [2][8].