Mirae Asset Securities logo

Full-scale entry into wafer segment; now is the time to buy

Raise TP to W131,000; still our top pick

We raise our target price for OCI Holdings to W131,000 (from W128,000) to reflect contributions to 2026 earnings stemming from its acquisition of a wafer plant. Sentiment on the solar PV sector has recently soured, sending the stock down about 15% over the past month. However, key investment points (rising preference for non-China products and expectations for restructuring in the Chinese solar PV industry) remain intact. Additionally, a new catalyst has emerged following OCI Holdings’ entry into the wafer segment: the potential establishment of a fully integrated supply chain that does not involve China. With the stock trading at a 12-month forward P/B of 0.41x, we believe now is the time to accumulate shares.

Full-scale entry into wafers; building an integrated non-China supply chain

OCI Holdings has announced the acquisition of a 65% stake in a 2.7GW wafer plant in Vietnam for US$78mn. The plant, purchased from Elite Solar, is capable of commercial operation from early 2026. Due to antidumping and countervailing duties, Elite Solar was unable to operate the facility independently, which allowed OCI Holdings to acquire it at a price close to the total original investment. With an additional investment of US$40mn, we believe that capacity could be doubled to 5.4GW.

The company’s entry into the wafer segment has two major implications. First, it adds new revenue and profit. We estimate incremental revenue of W195.3bn and operating profit of W38.8bn (OP margin of 20%) in 2026 from wafer operations. Second, it stabilizes polysilicon sales. Specifically, we estimate that wafer capacity of 5.4GW would translate to around 10,000 tonnes of polysilicon demand (about 30% of OCI Holdings’ total capacity). Moreover, since wafers have been the missing link in the non-China solar value chain, OCI Holdings is now positioned to establish a fully integrated supply network.

3Q25 preview: Focus on improving trajectory rather than near-term results

For 3Q25, we expect OCI Holdings to post an operating loss of W7.1bn, missing the consensus (operating profit of W28.4bn). While the polysilicon plant, which resumed full operations in September, has reached utilization of over 40%, we believe the costs incurred during the restart of the facility have not been fully offset. Still, we believe the focus should be on the pace of earnings improvement and the wafer plant acquisition.