Weaker outlook beyond 2H26 but selective opportunities emerge amid trough valuations; Upgrade Glass stocks Xinyi to Buy, Flat A/H to Neutral

Research evidence excerpt

Weaker outlook beyond 2H26 but selective opportunities emerge amid trough valuations; Upgrade Glass stocks Xinyi to Buy, Flat A/H to Neutral

Equity Research

27 July 2026 | 7:08AM CST

CHINA SOLAR

Weaker outlook beyond 2H26 but selective opportunities emerge amid

trough valuations; Upgrade Glass stocks Xinyi to Buy, Flat A/H to Neutral

Share prices have declined by an average of 37% YTD for our covered solar material Mengwen Wang

+86(21)2401-8932 |

names on the back of an avg. 16% value chain pricing decline (vs. -13% in prior GSe) mengwen.wang@goldmansachs.cn

Goldman Sachs (China) Securities

as a result of challenging global demand (46% yoy decline in 5M26) and insufficient Company Limited

supply response (avg. 13% yoy production decline in 1H26 across the value chain). Jacqueline Du

+852-2978-1783 |

jacqueline.du@gs.com

Looking forward, we expect the China solar industry will continue to grapple with Goldman Sachs (Asia) L.L.C.

headwinds from structurally lower UTR, and we lower our value chain ASP estimates

by avg. 9% in 2026E-30E. Specifically, we now expect UTR to stay at lower levels for

longer (29%-68% in 26E-30E vs. 60%-80% in prior GSe) as a result of weaker China

solar demand and slow capacity exit:

n Weaker China solar demand: We cut China solar installation by avg. 17% in

2027E-30E to reflect lower-than-expected market spot tariff and delayed

self-use C&I recovery.

n Slow capacity exit: We expect nominal capacity will largely stay at current levels

in 2026E-30E (vs. prior GSe of avg. 17% capacity cut in 2026E) due to increasing

M&A and collaboration among Tier 1 and Non Tier 1 players amid capacity

expansion restrictions.

Cut earnings and target prices: We cut our coverage EBITDA by 38% on average (ex

Daqo) in 26E-30E, among which avg.