China Solar Glass: Still searching for a bottom

Research evidence excerpt

China Solar Glass: Still searching for a bottom

28 July 2026

China Solar Glass EquitiesElectric Utilities

Still searching for a bottom China

◆ Major players including XYS and FGG issued profit warnings Evan Li*

for 1H26 amid price cuts and asset impairments Head, Asia Energy Transition Research The Hongkong and Shanghai Banking Corporation Limited

evan.m.h.li@hsbc.com.hk

◆ Supply now looks healthier, with inventories dropping, but +852 2996 6619

demand recovery will take time; still awaiting catalysts Shayla Xu*

Associate, Asia Energy Transition

The Hongkong and Shanghai Banking Corporation Limited

◆ Earnings cut to reflect fundamentals for XYS and FGG; shayla.b.xu@hsbc.com.hk

maintain Hold ratings on XYS and FGG-H/A +852 2288 7378

* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

A loss-making 1H26 for all: Our covered solar glass companies, Xinyi Solar (XYS, not registered/ qualified pursuant to FINRA regulations

968 HK) and Flat Glass (FGG, 6865 HK/601865 CH), alongside their listed peers in

H/A-share markets, have recently issued negative profit alerts for 1H26. Based on

the disclosures, almost all major solar glass producers are expected to report losses

in 1H26 because of: 1) declines in solar glass ASPs, 2) asset impairments for

equipment and inventories, and 3) weakness in other side businesses such as solar

farm operations and solar polysilicon (see page 2 for details). While the industry has

been operating near breakeven point since 2H24, the sharp drop in local solar

demand from China has triggered more aggressive product price cuts YTD. At the

same time, the Middle East conflict adds upside risk to energy input costs (notably

natural gas and LNG) heading into 2H26, further weighing on sentiment.