UBS lowered Xinyi Energy's (03868) earnings forecast per share from 2024 to 2026 by 8%, 11%, and 12%.
The Zhitong Finance App learned that UBS released a research report stating that it maintained the “neutral” rating of Xinyi Energy (03868) and lowered its earnings forecast by 8%, 11% and 12% per share from 2024 to 2026, reflecting slower than expected capacity growth, higher interest costs and lower utilization rates. This was partly compensated by a decrease in unit capital expenditure. The target price was lowered from HK$1.3 to HK$1.2.
According to the bank, excluding one-time projects, the company's recurring net profit fell 15% year on year last year, 11% and 14% lower than the bank's and market expectations. The annual dividend payout was reduced by 60%, which was also worse than expected. The bank pointed out that there are three things worth paying attention to in the performance, including a 40% increase in net financing costs due to rising interest rates, a 2.5% year-on-year decline in power generation capacity utilization hours last year, the EBIT rate falling 1 percentage point to 66% due to cuts in some provincial projects, and an increase in new production capacity of 636.5 megawatts throughout the year.