HTSC·2025-04-30 01:55Investment Rating - The investment rating for the company is "Buy" for both A-shares and H-shares, maintained from previous assessments [8]. Core Views - The company reported Q1 2025 revenue of 4.08 billion RMB and net profit attributable to shareholders of 110 million RMB, showing a year-on-year decline of 28.8% and 86.0% respectively, but a quarter-on-quarter recovery from Q4 2024 due to stabilizing solar glass prices [1][2]. - The gross margin for Q1 2025 improved to 11.7%, with a quarter-on-quarter increase of 8.8 percentage points, indicating a potential for continued improvement in profitability as solar glass prices are expected to remain stable [2]. - The company’s operating cash flow for Q1 2025 was 170 million RMB, down 72.2% year-on-year, primarily due to decreased sales revenue and collection [3]. - The demand for solar installations continues to grow rapidly, with a reported 59.7 GW of new installations in China from January to March 2025, a year-on-year increase of 31% [4]. Summary by Sections Financial Performance - Q1 2025 revenue was 4.08 billion RMB, with a year-on-year decrease of 28.8% and a quarter-on-quarter increase of 0.01% [2]. - The gross margin for Q1 2025 was 11.7%, reflecting a year-on-year decrease of 10.3% but a quarter-on-quarter increase of 8.8 percentage points [2]. - The company expects continued improvement in profitability in Q2 2025 due to stable solar glass prices and declining costs [2]. Expense and Cash Flow Analysis - The expense ratio for Q1 2025 was 7.9%, up 1.7 percentage points year-on-year, with increases in management, R&D, and financial expenses [3]. - The company’s cash flow from operations was significantly impacted by lower sales and collection rates, leading to a 72.2% decline year-on-year [3]. Market Demand and Capacity - The solar installation demand remains strong, with a reported 59.7 GW of new installations in Q1 2025, indicating a robust market outlook [4]. - The company’s production capacity for solar glass increased by 4.9% to 97,000 tons per day as of the end of April 2025, suggesting a positive trend in production recovery [4]. Profit Forecast and Valuation - The company maintains its profit forecast, expecting net profits of 1.07 billion RMB, 1.83 billion RMB, and 2.30 billion RMB for 2025, 2026, and 2027 respectively [5]. - The target price for A-shares is set at 19.44 RMB, while for H-shares it is 10.45 HKD, reflecting a valuation of 2.0x PB for A-shares and 1.0x PB for H-shares [5].