Shares of Xinyi Solar Holdings slipped on Tuesday after the company released its first-half earnings report, revealing a 27% decrease in net profit.
The company's shares dropped by 9.5% and were traded at 7.61 Hong Kong dollars (US$0.98) at the time of reporting. This downward trend caused the shares to reach their lowest intraday level since October 2022, according to FactSet.
Xinyi Solar Holdings, a Chinese photovoltaic-glass manufacturer, disclosed that its net profit for the first half of 2023 decreased to HK$1.39 billion, compared to HK$1.90 billion in the same period last year. However, their revenue increased to HK$12.14 billion from HK$9.70 billion.
Factors Affecting Performance
The company attributed the decline in gross profit contribution from its solar-glass business to pressure on its gross margin and the impact of yuan depreciation. Furthermore, Xinyi Solar mentioned that their solar-farm business also experienced a drop in profit contribution due to yuan depreciation and high finance costs.
Despite the recent performance, Citi analysts expressed confidence in Xinyi Solar Holdings, maintaining a buy rating on its shares. They noted that the company's management has guided for a significant gross profit margin recovery in the second half. This optimistic outlook is supported by anticipated improvements in demand and lower costs for soda ash and natural gas.