Goldman Sachs raises GCL TECH's target price to 1.3 yuan and upgrades its rating to "Buy"

Goldman Sachs published a research report stating that GCL TECH (03800.HK) has seen its stock price decline by 28% since early February, while the price of polysilicon has dropped by 22% during the same period. The current stock price corresponds to a forecasted price-to-book ratio of 0.5 times for 2027 (compared to 1 time for peers), which they consider unreasonable; the market is not only valuing the lower granular silicon prices but is also beginning to underestimate its long-term production growth potential.

The firm also noted that while price trends are important, they believe that entering 2026, GCL TECH's overall capacity utilization and progress in cost reduction will be key. Despite the severe oversupply in the industry, the expectation that downstream will accelerate the adoption of granular silicon will help the company significantly improve its production and profit outlook. They believe the current stock price correction provides an attractive entry point.

Goldman Sachs raised its target price from HKD 1.2 to HKD 1.3 based on its expectation that the performance in the second half of 2025 will exceed expectations, and due to GCL TECH management's guidance that the pace of cost reduction is faster than expected; the rating was upgraded from "Neutral" to "Buy."