Guoyuan International has issued a research report increasing the target price for XINYI SOLAR (00968) to HK$3.60 per share. This target corresponds to a price-to-earnings (PE) ratio of 14 times for 2026 and 11.5 times for 2027, representing a potential 16% upside from the current price. The firm reiterated a "Hold" rating on the stock. For the full year 2025, XINYI SOLAR reported a profit of 845 million yuan, which adjusted for impairment charges was approximately 2.2 billion yuan. The company maintained a stable dividend payout.
Key points from Guoyuan International's report are as follows:
For the full year 2025, the company's revenue was 20.861 billion yuan, a decrease of 4.8% year-on-year. Net profit attributable to shareholders was 845 million yuan, down 16.2% compared to the previous year. This decline was primarily due to impairment provisions for polysilicon production facilities and idle solar glass production lines. Excluding these impairment factors, the full-year adjusted net profit was approximately 2.2 billion yuan. Basic earnings per share were 9.29 fen. The total annual dividend was about 5 HK cents (comprising an interim dividend of 4.2 HK cents and a final dividend of 0.8 HK cents), resulting in a dividend yield of approximately 49.1%, indicating stable dividend distribution.
The company's solar glass business generated revenue of 17.83 billion yuan in 2025, a year-on-year decrease of 5.3%, accounting for 85.5% of total revenue. The decline was attributed to lower average selling prices. However, overseas sales revenue saw rapid growth, increasing by 36% year-on-year and contributing to 33.5% of the solar glass segment's revenue, up from 23.3% in 2024. This growth was primarily driven by markets in the United States and India, where solar glass produced overseas commands a price premium due to trade barriers and limited local supply. The gross profit margin for the solar glass business improved to 14.1% in 2025, compared to 9.7% in 2024, benefiting from lower raw material costs, technological advancements that improved production yield, and enhanced cost control measures.
In response to continued pressure on domestic solar glass prices expected in 2026 and the ongoing industry-wide capacity rationalization, the company is optimizing its domestic production capacity. Idle domestic production lines are being handled in two ways: smaller, uncompetitive furnaces are being either impaired or converted into R&D lines, while competitive furnaces can be restarted depending on market conditions. As of February 27, 2026, the company's operational solar glass melting capacity was 22,600 tonnes per day, including 4,600 tonnes from overseas facilities. This overseas capacity comprises 3,400 tonnes from Malaysia and 1,200 tonnes from the first production line in Indonesia, which commenced operations in January 2026. A second production line in Indonesia is scheduled to begin operations in the second quarter of 2026 (mid-May to end of June). The company expects its total capacity to reach approximately 23,800 tonnes per day by the end of 2026, with overseas capacity increasing to 5,800 tonnes, representing 24% of the total. Furthermore, planning for the second phase of the Indonesia project has commenced, with a total planned capacity of about 2,300 tonnes. Therefore, as the company's overseas capacity gradually comes online and benefits from sales premiums, it is expected to support sustained overall performance growth.
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