Jinwu Financial News | According to BOC International Development Research Report, Xinyi Energy (03868) achieved net profit of HK$426 million in the second half of last year, +22.3%/-24.8% year over year, lower than the bank/market's expectations of 25%/27%, mainly due to factors such as weather and light abandonment.
The company abandoned light for the first time last year, with a light abandonment rate of 2.5%. The bank expects to continue to rise in the future, or close to 5%. Since the second half of last year, many provinces have introduced policies to increase the market-based trading ratio of new energy sources. The bank anticipates that future stock projects will risk falling electricity prices.
The bank lowered its 2024/2025 profit forecast by 23% to reduce the target price to HK$1.16 (previously HK$1.53) based on 8.5 times the 2024 price-earnings ratio. Although the sharp drop in component prices is beneficial to increasing the yield of the company's new projects, the profit uncertainty of the company's stock projects is high and will continue to suppress valuations, while the current high dividend rate (6.2% in 2024) will support the stock price and maintain neutrality.