By Jiahui Huang
Xinyi Solar shares jumped after the solar-glass maker beat earnings estimates, helped by rising demand and moderating input costs in the second half of the year.
The stock rose 22% to 4.68 Hong Kong dollars (60 U.S. cents) by midday Thursday, on track for its largest one-day percentage jump in more than a decade.
Xinyi Solar on Wednesday said net profit in 2023 rose 9.6% to HK$4.19 billion (US$535.2 million), supported by a jump in gross profit margin in the second half of the year on improving raw-material and energy costs. Deutsche Bank and Jefferies said the bottom line beat consensus estimates.
The gross profit margin for the solar-glass segment rose to 26.4% in the second half from 15.2% in the first half, with polysilicon and PV module prices dropping sharply from the middle of the year, "putting installation costs back on a downward trajectory," Xinyi Solar said.
Revenue, meanwhile, rose 30% to HK$26.63 billion, beating a FactSet-compiled consensus estimate of HK$26.06 billion.
Deutsche Bank analyst Gary Zhou said in a research note that although analysts remain cautious about the solar industry in 2024, partly due to weak near-term demand, "Xinyi Solar is one of our preferred picks in the space, as we see better supply discipline in [the] solar-glass industry compared to other solar sub-sectors."
He added: "We like Xinyi Solar for its leading market share and cost advantage." The bank kept a buy rating on the stock and raised the target price to HK$5.20 from HK$4.90.
Jefferies analysts led by Melody Chan maintained a hold rating while boosting their target price by 7% to HK$4.26.
"We believe GPM to remain stable on improving supply and demand balance," they wrote in a note.
Write to Jiahui Huang at jiahui.huang@wsj.com
(END) Dow Jones Newswires
February 28, 2024 23:17 ET (04:17 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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