Outlook weakens after 2H26, but selective opportunities emerge in trough valuations; upgrades photovoltaic glass rating (Goldman Sachs)
Goldman Sachs released a report on China's solar energy industry, believing that the industry outlook will weaken after 2H26, but selective opportunities have emerged in the current low valuation.
Goldman Sachs released a report on China's solar energy industry, believing that the industry outlook will weaken after 2H26, but selective opportunities have emerged in the current low valuation. Therefore, it upgraded the ratings of Xinyi Solar and Flat Glass to buy. The report pointed out that although the industry's overcapacity and intensified competition have put overall profits under pressure, the photovoltaic glass segment is expected to be the first to usher in a profit turning point due to the high concentration of the industry and the rapid clearance of backward production capacity. The market's pessimistic expectations for the entire photovoltaic sector are relatively sufficient, but the differentiation opportunities for sub-links within the industry chain that are the first to recover (such as glass) may not be fully explored. One-sentence conclusion: China's photovoltaic industry as a whole is still in a cold winter, but the photovoltaic glass segment is expected to be the first to usher in a rebound in prosperity thanks to its clear competitive landscape and capacity clearing pace. Pros/Cons: Positives: Xinyi Solar (0968.HK), Flat Glass (6865.HK/601865.SS). The current stock price is at a low level and may not yet price in its profit turning point. Negative: Most integrated component and silicon material companies have a long liquidation process. Catalysts: 1) Whether the price of photovoltaic glass stabilizes and rebounds; 2) The speed of exiting backward production capacity; 3) Whether domestic photovoltaic installed demand declines as expected in 2H26.