Daiwa Research cut its target price for GCL-Poly Energy (03800) to HK$0.27 from HK$0.45 and retained its "hold" rating.
The research house said Huaneng Group terminated its purchase offer for a 51% stake
in GCL New Energy (GNE)(00451). Instead, Huaneng plans to buy solar power plants from GNE.
GCL-Poly started transferring multi-wafer capacity to quasi-mono in 2019. Its annualised quasi-mono capacity reached 6GW in 2Q and is likely to reach 10.8GW by the end of 2019. However, Daiwa expects global monowafer capacity to rise at a 47% CAGR to 150GW over 2018-20, which may turn the dynamics from 1% shortage in 2019 to 18% oversupply in 2020.
With GNE's financials still consolidated in GCL's balance sheet and amid a likely wafer ASP collapse in 2020, Daiwa revised down its 2020-21 EPS forecasts by 14-21%.
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