Tongwei Co Ltd Class A

600438: XSHG (CHN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
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Tongwei Earnings: Lower Costs Drive Sequential Improvement; Keep Fair Value Estimate at CNY 21.70

Cheng Wang

Nov 6, 2024

We maintain our fair value estimate of CNY 21.70 for Tongwei and believe the shares are currently overvalued. Tongwei's operating losses for the third quarter narrowed sequentially, likely because of improvement in its polysilicon segment. Factoring this in, we have slightly revised our net loss estimate for 2024 to CNY 5.9 billion from CNY 6.6 billion. We leave our estimates unchanged beyond 2024 and continue to anticipate a turnaround in 2026, driven by industry consolidation and more disciplined competition.

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Tongwei Co Ltd Class A

Tongwei Earnings: Lower Costs Drive Sequential Improvement; Keep Fair Value Estimate at CNY 21.70

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