Tongwei Co Ltd Class A

600438: XSHG (CHN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	CNY 38.50	Jtft	Tkmmbrs

Tongwei Earnings: Solar Cell and Module Losses Offset Polysilicon Profit; Fair Value Estimate Cut

Cheng Wang

May 6, 2024

We cut our fair value estimate for Tongwei to CNY 25.60 from CNY 35.90 after incorporating lower polysilicon and solar cell prices. While the losses in fourth-quarter 2023 and first-quarter 2024 are disappointing, the market reaction was contained as the prices appear to be bottoming. Tongwei currently trades at a 14% discount to our fair value estimate, but we prefer TCL Zhonghuan for greater upside potential.

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