UBS Sets Target Price for XINYI ENERGY (03868.HK) at $1.25, Maintains Neutral Rating

Company Performance: Xinyi Energy reported a revenue of RMB2.453 billion for the year ending December 31, 2025, reflecting a 0.5% year-over-year increase.

Profit Growth: The company's net profit increased by 27.8% year-over-year to RMB1.011 billion, resulting in an earnings per share (EPS) of RMB12 cents.

Dividend Announcement: A final dividend per share (DPS) of $3.6 cents was declared, up from $2.7 cents in the previous year.

Market Activity: The stock experienced short selling of $1.85 million, with a short selling ratio of 25.260%.

Revenue Forecast Adjustment: Citi Research has reduced its revenue forecasts for XINYI GLASS for 2025-2027 by 5% and gross margin forecasts by 1.3-2.8 percentage points, now estimating a gross margin of 28.5-30.2%.

Valuation Increase: Despite the forecast cuts, Citi raised the valuation multiple for XINYI GLASS' core glass business to a projected 2026 PE ratio of 10x and increased the target price from $7.55 to $9.01.

Cautious Outlook: The broker maintains a Neutral rating on XINYI GLASS, expressing caution regarding the company's short- to medium-term outlook due to ongoing economic and property market weaknesses.

Short Selling Data: The article includes short selling data for XINYI GLASS and related companies, indicating significant short selling activity in the market.

UBS Rating Update: UBS maintains a Neutral rating on XINYI ENERGY (03868.HK) while increasing its target price from $1.03 to $1.25 due to higher-than-expected dividends and lower financial expenses.

Earnings Forecast Adjustment: The broker raised its earnings forecasts for 2025-2027 by 9%, 1%, and 1% respectively, aligning with market expectations.

Dividend Payout Ratio: UBS estimates the dividend payout ratio will remain between 56-59%, significantly lower than the historical average of 88% from 2017-2024.

Market Activity: The stock experienced a short selling of $1.93M with a ratio of 24.759%, indicating notable market activity.

Daiwa's Outlook on Solar Industry: Daiwa has a negative view on the solar industry in Mainland China, suggesting that market expectations for profitability in 2025 are overly optimistic, which could negatively impact solar stock prices.

DAQO New Energy Corp. Rating: The broker maintains an Outperform rating for DAQO New Energy Corp. (DQ.US), citing its long-term investment value due to its net cash value exceeding market value.

XINYI ENERGY and FLAT GLASS Ratings: XINYI ENERGY (03868.HK) is rated Hold with a target price increase to HKD0.9, while FLAT GLASS (06865.HK) and XINYI SOLAR (00968.HK) are rated Underperform, with significant reductions in their earnings forecasts.

Short Selling Data: The report includes short selling data for various companies, indicating varying levels of short interest, with XINYI SOLAR showing a notably high short selling ratio of 27.066%.

Settlement of Renewable Energy Subsidies: The Ministry of Finance has made progress in settling overdue renewable energy subsidies, with utilities like CEB GREENTECH and CHINA LONGYUAN receiving significant payments in July and August.

Investment Ratings and Supply Chain Preferences: HSBC Global Research favors GCL TECH and XINYI SOLAR due to adjustments in solar equipment overcapacity, while providing updated investment ratings and target prices for several power utilities.

Stock Performance Overview: Various Chinese energy stocks show mixed performance, with CHINA RES POWER and CGN POWER experiencing declines, while HUADIAN POWER and CHINA SUNTIEN report gains.

Short Selling Activity: Significant short selling activity is noted across several stocks, with CGN POWER having the highest short selling ratio at 34.136%, indicating bearish sentiment among investors.