Shuangliang Eco-Energy(SH:600481) HTSC·2025-09-01 07:56Investment Rating - The report maintains an "Overweight" rating for the company with a target price of RMB 6.62 [7][8]. Core Views - The company is expected to see a recovery in silicon wafer profitability as it continues to optimize its processes and reduce costs. The equipment business is also progressing well, potentially creating a second growth curve for the company [2][4]. - The company has experienced a significant reduction in losses compared to the previous year, primarily due to a decrease in asset impairment losses [2][3]. - The report highlights the company's strong cash flow generation, with operating cash flow remaining positive for four consecutive quarters [3]. Summary by Sections Financial Performance - For the first half of 2025, the company reported revenues of RMB 4.39 billion, a year-on-year decline of 37.1%. The net loss attributable to the parent company was RMB 600 million, a significant reduction from RMB 1.26 billion in the same period last year [2]. - In Q2 2025, the company recorded a net loss of RMB 440 million, with a gross margin decrease of 1.3% and an increase in asset impairment losses to RMB 170 million [3]. Silicon Wafer Business - The company has equipped its entire production line with 1600 furnaces, capable of producing M10, G12, and customized rectangular silicon wafers. It is also advancing the construction of smart factories to enhance efficiency [4]. - The company aims to improve yield rates and production efficiency through better material quality control and process management [4]. Equipment Business - The company is expanding its new energy equipment orders, particularly in hydrogen energy, and has established a direct sales network across multiple provinces in China. It has signed a sales contract worth RMB 450 million for green hydrogen systems [5]. - In the data center cooling segment, the company is actively participating in several high-profile projects, which may lead to significant benefits as the data center market continues to grow [5]. Profit Forecast and Valuation - Due to a decline in demand following the end of the domestic photovoltaic installation rush, the company has adjusted its revenue and gross margin assumptions downward for its photovoltaic business. The expected net profits for 2025-2027 are projected to be RMB -665 million, RMB 420 million, and RMB 1.006 billion, respectively [6][13]. - The report assigns a PE valuation of 30.09x for 2026, leading to a target price of RMB 6.62, reflecting an increase from the previous target of RMB 4.94 [6][15].