Jinwu Financial News | According to BOC International Development Research Report, Xinte Energy (01799) achieved net profit of 359 million yuan (RMB, same below) in the first quarter, reversing losses from month to month. As the three major bases gradually reached full capacity, the company's production cost per ton of polysilicon dropped sharply from 53,400 yuan to 48,500 yuan in the first quarter (further falling to 46,000 yuan in April), and the polysilicon sector made a profit of 190 million yuan.
According to the bank, the price of polysilicon has declined since the end of March. The bank expects that the current price may be lower than the cash costs of all rod-shaped silicon companies and the production costs of granular silicon companies. It has basically bottomed out, and is expected to bottom up in the 3rd quarter.
The bank continued that due to the decline in polysilicon prices exceeding expectations, the bank lowered net profit from 2024-26 to 3.5/8.2/2.07 billion yuan, of which the steadily growing power plant sector contributed 9.9/12.9/1.49 billion yuan. The company's polysilicon production costs have now been reduced to basically the same as Dazuan Energy (688303.SH), and equity production capacity is also close. The bank believes that the two are highly comparable. Currently, the market value of A-shares is as high as 54.4 billion yuan, and the market value per ton is as high as 1.78 billion yuan. Even considering the AH premium and the company's higher debt ratio, the bank believes that the company is still seriously undervalued compared to Daquan. Based on the single-ton market value of the polysilicon sector of $360 million (80% compared to the full discount) and the price-earnings ratio of the power plant sector 6 times the 2024 price-earnings ratio, the bank lowered the target price to HK$12.04 (previously HK$12.80), corresponding 46/19/8 times the price-earnings ratio for 2024-26, of which the power plant sector is worth HK$4.52 per share. Performance at the bottom of the cycle is under pressure, but the bank believes that as a polysilicon leader, the company is still competitive for a long time, and its current valuation is attractive, and it maintains purchases.