GCL TECH(03800) 交银国际证券·2024-10-29 02:42Investment Rating - The investment rating for the company is Neutral, with a target price of HKD 1.77, indicating a potential upside of 3.5% from the current price of HKD 1.71 [5][8]. Core Insights - The company has experienced a slight narrowing of losses in Q3 2024, with a net loss of RMB 1.492 billion, down from RMB 2.971 billion in the first three quarters, primarily due to reduced inventory impairment [1]. - The report highlights that supply-side reforms are expected to accelerate the clearing of polysilicon supply, which could enhance the company's market position due to its low electricity consumption advantage [2]. - The company is projected to become the first in the industry to achieve cash profitability in polysilicon production by Q1 2025, as cash costs are expected to drop below RMB 30,000 per ton [1][3]. Financial Summary - Revenue is forecasted to decline significantly in 2024 to RMB 16.169 billion, a 52% decrease year-on-year, before recovering in subsequent years [4]. - The average selling price of granular silicon is expected to rise to RMB 55,000 per ton by 2026, with a gradual increase in market share from 14% in 2024 to 22% by 2026 [3][6]. - The company’s production capacity is anticipated to reach 280,000 tons in 2024, with a projected increase to 456,600 tons by 2026 [6]. Valuation Adjustments - The valuation benchmark for the polysilicon segment has been raised from RMB 7 billion to RMB 10 billion per ton of capacity, reflecting increased visibility of profit recovery in 2025-2026 [3][7]. - The target price adjustment from HKD 1.31 to HKD 1.77 is based on the anticipated recovery in profitability and market conditions [3][7].