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Investing.com - Deutsche Bank upgraded Tongwei (SHG:600438) from Hold to Buy and raised its price target to RMB30.00 from RMB23.00, citing improved market conditions in the polysilicon sector.
Tongwei reported a net loss of RMB0.3 billion for the third quarter of 2025 on October 24, showing significant improvement compared to losses of RMB2.4 billion in the second quarter and RMB2.6 billion in the first quarter of 2025.
The company’s financial recovery was primarily driven by a 20% quarter-over-quarter increase in average polysilicon spot prices during the third quarter of 2025, with Deutsche Bank noting that Tongwei’s peer GCL Tech (HKG:3800) had already reported positive net profit from its solar material segment in the same period.
Deutsche Bank highlighted that current polysilicon spot prices of RMB53/kg for rod silicon are approximately 15% higher than the third-quarter average of RMB46/kg, suggesting further improvement for Tongwei’s fourth-quarter earnings.
The bank raised its earnings per share forecasts for Tongwei based on higher polysilicon average selling price assumptions, increasing from RMB55/kg to RMB65/kg for 2026, and identified potential industry capacity consolidation negotiations as a near-term catalyst for the stock.
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