Lyon: FLAT GLASS (06865) is rated as "outperforming the market" by CECEP Solar Energy. The short-term benefits of glass are due to the market reforms in mainland China's electricity sector.

Lyon released a research report giving FLAT GLASS (06865) an "outperform the market" rating. The central government disclosed a policy of market-oriented reform of new energy on-grid electricity prices, which in the long term is expected to result in lower internal rates of return for projects. This policy is likely to slow down the growth of CECEP Solar Energy's installed capacity in the future, but at the same time is expected to promote more sustainable and stable industry growth. In the short term, the bank believes that this policy will lead to a installation boom before June 1 of this year. Lyon believes that strong short-term demand should drive a sharp increase in production. The bank's channel survey expects module production planned for March of this year to reach around 50 gigawatts, an increase of 25% compared to the previous month. At the same time, CECEP Solar Energy's glass inventory decreased by 5% after the Lunar New Year, and major component manufacturers plan to increase module prices by 2 to 5 CNY per watt. CECEP Solar Energy's glass and polycrystalline silicon are expected to benefit from the installation boom in the short term.