Citi: Maintains "Neutral" rating on FLAT GLASS (06865), expects glass business to turn into losses by 2026.
Citibank has lowered the target price of Fuyao Glass (06865) by 33.3%, mainly due to profit reduction forecasts.
Citigroup released a research report stating that it has lowered the target price for FLAT GLASS (06865) by 33.3%, mainly due to a cut in profit forecast. However, they still maintain a "neutral" rating. Due to weak demand for CECEP Solar Energy installations in China, the bank expects FLAT GLASS business to turn into a loss by 2026, as the price of 2.0mm CECEP Solar Energy glass has dropped significantly by 18.2% to 9.0 yuan per square meter so far this year.
According to the report, based on data from SCI99, as of June 18, the average inventory turnover of solar glass in China is 51.4 days. China's daily production capacity of solar glass has decreased by 17.8% to 81,350 tons year-on-year, which is estimated to meet a monthly component production of about 45GW. However, according to SMM data, China's estimated module production for June is expected to decrease by 18.4% year-on-year to 37.8GW, indicating an oversupply situation.
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