Goldman Sachs: Shenzhen SC New Energy Technology (300724.SZ): Lowering TP to Reflect Weaker 1Q26 Order Momentum; Retain Neutral
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Goldman Sachs lowered its 12-month target price for Shenzhen SC New Energy Technology (300724.SZ) from RMB 100 to RMB 89 while maintaining a Neutral rating. The adjustment follows weaker-than-expected EBITDA in 4Q25 and 1Q26, which missed Goldman Sachs estimates by 38% and 12%, respectively. Revenue declined sharply by 64% year-over-year in 4Q25 and 35% in 1Q26, reflecting delayed order confirmations and decelerating order momentum, evidenced by a 29% quarter-over-quarter drop in contract liabilities during 4Q25.
Despite top-line softness, the 1Q26 gross margin expanded by 11 percentage points quarter-over-quarter to 34.6%, beating estimates by 8 percentage points. This margin improvement was driven by a favorable shift toward higher-margin overseas orders.
Goldman Sachs kept 2026-2030 EBITDA forecasts largely unchanged but cut the 2026 year-end net cash estimate by 20%. The new target price is based on 12 times 2027E EV/EBITDA, discounted to 2026 with a 10.6% cost of equity.
The company remains the world's largest TOPCon equipment manufacturer with a market share exceeding 50% and a perovskite solar cell technology leader with a 40% share. However, Goldman Sachs expects China's solar capital expenditure downturn to be prolonged due to anti-involution measures. Furthermore, visibility into new perovskite application orders remains uncertain amid intensifying competition and distant commercialization timelines beyond 2028, warranting a balanced risk-reward profile.