HK Stock Market Move | FLAT GLASS (06865) surged more than 7%, leading profit advantage stable, post-holiday price turning point of photovoltaic glass can be expected.

Flat Glass (06865) surged more than 7%, reaching an increase of 7.14% at the time of reporting, to HKD 12.6, with a trading volume of HKD 43.3994 million. Sinolink released a research report stating that the top photovoltaic glass companies XINYI SOLAR and Flat Glass Group maintain a gross profit margin difference of more than 10% with second and third-tier companies due to advantages in raw material procurement and yield rate. Considering the pressure on profitability, the clearance of old and small kilns is accelerating, and the cost curve of photovoltaic glass segment is expected to remain steep. The advantages of large kilns of top companies are expected to be highlighted. As of January 2025, XINYI and Flat Glass Group's combined production capacity accounted for 44%, reaching a previous high of 53%. Considering that most second and third-tier companies are in a state of insufficient capacity expansion and motivation due to low profitability, top companies are expected to maintain a faster production capacity growth rate than the industry due to their profitability and funding advantages, thereby achieving market share recovery and consolidating their leading position. The bank further points out that the short-term supply of photovoltaic glass is expected to remain low or even decrease, with a price turning point expected after the holiday; the subsequent supply growth is limited and controllable, under the assumption of aggressive resumption of production, the industry's average daily melting volume is expected to increase by only 3% in 2025, with significant price elasticity in the short term. Glass is one of the most optimal segments in the photovoltaic industry chain, and the stable profit advantage of the leading companies is expected to lead to a recovery in the market share of the duopoly.