GCL TECH(03800) 第一上海证券·2024-11-05 07:31Investment Rating - The report maintains a "Buy" rating for the company with a target price raised to HKD 1.90, reflecting a potential upside of 15% from the current price of HKD 1.65 [2][3]. Core Insights - The company is expected to recover profitability as production utilization rates rebound, with Q3 2024 performance indicating a stabilization after significant losses in previous quarters [2]. - The production and sales of granular silicon have shown stability, with production and shipment volumes increasing by 17% and 20% year-on-year, respectively, in Q3 2024 [2]. - Cash costs have decreased, aligning with expectations, and further cost reduction is anticipated as production processes improve [2]. - Supply-side reforms in the silicon material sector are expected to support inventory reduction and price recovery, benefiting leading companies in the industry [2]. Financial Summary - Total revenue is projected to decline from RMB 35,930 million in 2022 to RMB 16,668 million in 2024, before recovering to RMB 31,582 million by 2026, reflecting a significant year-on-year change of -51% in 2024 and a recovery of 32% in 2026 [1]. - Shareholder net profit is forecasted to drop sharply to RMB -3,200 million in 2024, with a recovery to RMB 3,032 million by 2026, indicating a year-on-year change of -228% in 2024 and a positive change of 203% in 2026 [1]. - Earnings per share (EPS) are expected to turn negative at RMB -0.12 in 2024, with a gradual recovery to RMB 0.11 by 2026 [1]. - The price-to-earnings (P/E) ratio is projected to be 39.4 in 2025 and 13.0 in 2026, indicating a significant variation in valuation as profitability improves [1].