Solar Glass - Darkness Before Dawn

Research evidence excerpt

Solar Glass - Darkness Before Dawn

Idea

August 4, 2026 08:30 AM GMT

Morgan Stanley Asia Limited+MGreater China Materials | Asia Pacific Hannah Yang, CFA

Equity Analyst

Solar Glass - Darkness Before Hannah.Yang1@morganstanley.comRachel L Zhang +852 2239-7079

Rachel.Zhang@morganstanley.com +852 2239-1520

Dawn Chris Jiang

Chris.Jiang@morganstanley.com +852 3963-1593

Solar glass is moving to a balanced market through supply Cynthia Tang

reduction due to losses in the past few months. We think this ResearchCynthia.Tang@morganstanley.comAssociate +852 3963-4360

could be darkness before the dawn, and see gradually recovering

industry fundamentals skewing risk/reward to the upside.

Capacity suspension gradually being realized: Dragged by expanded loss-making at

the cash cost level and high inventory pressure YTD, glass producers have gradually

carried out maintenance. Leading players such as Xinyi Solar and Flat Glass cut Greater China Materials

Asia Pacific

capacity to discipline supply in the domestic market in 2025. Unlike then, Industry View Attractive

maintenance is now mainly driven by tier 2 or 3 producers, which together have

What’s Changed

suspended ~13.5kt/d in capacity YTD, lowering total operating capacity to ~77.4kt/d. Xinyi Solar Holdings Ltd

Meanwhile, smaller producers are implementing line blockage, affecting ~6kt/d in (0968.HK) From To

Price Target HK$3.50 HK$3.20

capacity. Thus, effective operating capacity stands at ~70.0kt/d, down from ~88.2kt/

Flat Glass Group Co Ltd

d at 2025-end. There are a few more lines planning to carry out maintenance in the

(6865.HK) From To

near term, which could affect another 8,400t/d in capacity in China. Price Target HK$11.50 HK$9.60