Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 4.09 [8][13]. Core Views - The company reported a revenue of RMB 21.92 billion and a net profit of RMB 1.01 billion for 2024, reflecting a year-on-year decline of 9.3% and 73.8% respectively. The second half of 2024 saw a loss of RMB 800 million due to falling prices and reduced sales of photovoltaic glass, alongside impairment provisions for cold repair lines and inventory [1][2]. - The report anticipates a recovery in photovoltaic glass prices in March 2025 as downstream demand improves, benefiting the company's profitability due to its scale and cost advantages as an industry leader [1][4]. Summary by Sections Financial Performance - In 2024, the company's photovoltaic glass and solar power generation businesses generated revenues of RMB 18.82 billion and RMB 3.02 billion, respectively, with a year-on-year decline of 11.9% and an increase of 12.1%. The gross margin for photovoltaic glass was 7.6%, down 14.0 percentage points year-on-year [2][3]. - The company recorded impairment losses of RMB 390 million for property, plant, and equipment, and RMB 160 million for inventory in 2024, primarily due to cold repairs and inventory write-downs [3]. Market Outlook - The global photovoltaic market is expected to grow, with an estimated 530 GW of new installations in 2024, a 36% increase year-on-year. The company holds the largest production capacity of photovoltaic glass globally at 23,000 tons per day [4]. - The report predicts that as the supply-demand balance improves, photovoltaic glass prices will stabilize and potentially rise, positively impacting the company's profitability [4]. Profit Forecast and Valuation - The company’s net profit forecasts for 2025, 2026, and 2027 are RMB 1.80 billion, RMB 2.57 billion, and RMB 3.20 billion, respectively, reflecting significant downward adjustments from previous estimates due to declining glass prices and sales [5][15]. - The report applies a comparable company valuation method, assigning a price-to-earnings ratio of 19x for 2025, leading to a target price of HKD 4.09 [5][13].
信义光能：24H2盈利承压，期待价格拐点-20250304