Jinwu Financial News | Haitong International said that Follett Glass (06865) achieved total operating revenue of RMB 21,524 billion in 2023, an increase of 39.21% over the previous year, mainly due to the sharp drop in solar module prices in 2023, which stimulated a sharp increase in installed demand for downstream modules. The company benefited from the release of new production capacity and reached a new high in revenue. At the same time, due to the easing of cost pressure on some raw materials and the gradual balance of market supply, the company achieved net profit attributable to shareholders of the parent company of 2,760 billion yuan, an increase of 30% over the previous year.
The bank mentioned that the company's relatively high soda price in 2023 guarantees good profitability. In addition, the company's photovoltaic glass production capacity is expanding at an accelerated pace, which is expected to significantly increase shipments in 24-25 years, and maintain industry-leading scale.
According to the bank, although the growth rate of new photovoltaic glass production capacity has slowed in 2023, the release of overall demand fell short of expectations, and prices fluctuated mainly at low levels. The bank lowered its 24-25 gross margin of 2.3 pct/1.2 pct. The company's operating income for 2024-2026 is estimated to be 278.89/331.67/38.648 billion yuan, respectively, and net profit to mother of 41.69/51.80/6.50 billion yuan, maintaining the “superior to the market” rating. Based on the DCF valuation model, the target price was lowered from HKD28.43 in '23 to HKD27.25.