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<Research>CLSA: CN May Roll Out Relatively Mild Supply-Side Reforms for Solar Sector, Benefiting GCL TECH/ XINYI SOLAR
Recommend 21 Positive 40 Negative 27 |
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GCL TECH (03800.HK) opened 2.35% higher today and once peaked at $0.99 with a surge of 16%. It last traded at $0.9, up 5.88%, on a volume of 844 million shares, involving $777 million. CLSA attributed the rally in GCL TECH's share price to market rumors that the Chinese government is considering implementing supply-side policies for the solar sector (especially polysilicon), and that industry alliances are planning to raise the price of polysilicon to a range of RMB45-50 per kilogram. Unlike previous supply-side reforms in coal and steel, CLSA reiterated that the Chinese government is likely to introduce relatively mild supply-side reforms for the solar sector rather than imposing administrative production cuts, given that the sector's major players are non-state-owned enterprises. The broker believed that potential policies will bring marginal improvements instead of fine-tuning supply and demand to a perfect 1:1. CLSA continued to view leading polysilicon companies ( GCL TECH (03800.HK) and Tongwei (600438.SH)) and leading solar glass companies ( FLAT GLASS (06865.HK) and XINYI SOLAR (00968.HK)) as potential key beneficiaries of supply-side reforms in the solar sector as they will benefit from higher industry consolidation and a steeper cost curve. AAStocks Financial News |
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