JP Morgan: Upgrades XINYI SOLAR (00968) and FLAT GLASS (06865) to "Overweight" and becomes more optimistic about the industry.

J.P. Morgan has released a research report stating that the Chinese photovoltaic sector has seen an average decline of about 30% year-to-date, with some stocks' valuations approaching historical lows. The firm's outlook for the industry has turned selectively optimistic, anticipating that photovoltaic demand will recover in the second half of the year driven by seasonal factors. Coupled with production suspension arrangements, the supply-demand outlook for photovoltaic glass is expected to improve. The bank has upgraded the ratings for XINYI SOLAR (00968) and FLAT GLASS (06865) from "Neutral" to "Overweight," expressing optimism that if industry consolidation occurs, XINYI SOLAR and FLAT GLASS are likely to gain more market share. At the same time, they maintain the "Overweight" rating for GCL TECH (03800). The target price for XINYI SOLAR has been lowered from HKD 3.1 to HKD 2.8, and the target price for FLAT GLASS H shares has been reduced from HKD 9.8 to HKD 8.8. JP Morgan predicts that FLAT GLASS will report a loss in 2026 and has revised its earnings forecast for 2027 to 2028 downward by 1% to 9%, while lowering XINYI SOLAR's earnings projections for 2026 to 2028 to a range of 1% to 71%.