The Big Bank Research downgraded GCL TECH's target price to 1.6 yuan and maintained a "Buy" rating

HSBC Global Research published a report stating that GCL TECH (03800.HK) not only has cost advantages during the industry downturn but its competitive advantages are becoming clearer. The price of polysilicon has recently dropped, and peers are selling below cost, which may keep prices low until the government strengthens price controls, likely accelerating supply consolidation.

The report indicated that GCL TECH's net loss narrowed to RMB 2.9 billion last year, and it recorded positive gross profit and adjusted EBITDA, mainly benefiting from a 25% decrease in average cash costs to RMB 25 per kilogram. Recent spot prices have fallen by 20% to RMB 40 per kilogram, leading the bank to believe that the company's total cost is approximately RMB 37 per kilogram, close to breakeven, and if prices drop further, it can still maintain cash profitability.

HSBC Research has lowered GCL TECH's earnings forecasts for 2026 and 2027 by 51% and 27%, respectively, to reflect lower price assumptions, and has adjusted the target price based on the sum-of-the-parts valuation method from HKD 1.8 to HKD 1.6, maintaining a "Buy" rating