TONGWEI CO.,LTD(SH:600438) HTSC·2025-08-25 03:31Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 25.39 [7]. Core Views - The company reported a revenue of RMB 40.51 billion in H1 2025, a year-on-year decrease of 7.5%, and a net profit attributable to shareholders of -RMB 4.96 billion, down 58.3% year-on-year. However, in Q2 2025, the net loss narrowed by RMB 2.3 billion compared to the previous quarter, primarily due to increased prices of battery components driven by domestic photovoltaic installations and improved operational efficiency [1]. - The company is well-positioned to benefit from the ongoing "anti-involution" trend in the photovoltaic industry, with its leading positions in silicon materials and batteries expected to be solidified [5]. Summary by Sections Financial Performance - In Q2 2025, the company's gross margin was 2.0%, an increase of 4.9 percentage points quarter-on-quarter, attributed to higher battery component prices and reduced operating expenses, which fell to 8.5% [2]. - The company had approximately RMB 33.2 billion in cash and financial assets as of the end of H1 2025, indicating strong liquidity [2]. Market Position - The company achieved a silicon material sales volume of 161,300 tons in H1 2025, holding a global market share of about 30%, maintaining its industry-leading position [3]. - In H1 2025, the company sold 49.89 GW of batteries, a year-on-year increase of 42.5%, and 24.52 GW of components, up 31.3% year-on-year, continuing to lead globally [4]. Profitability Forecast and Valuation - The report adjusts the profit forecasts for 2025-2027, estimating net profits of -RMB 6.182 billion, RMB 3.571 billion, and RMB 5.132 billion respectively, reflecting a significant downward revision [5][12]. - The company is assigned a PE ratio of 32.13x for 2026, with a target price of RMB 25.39, reflecting an increase from the previous target of RMB 19.33 [5][14].