Goldman Sachs: Expecting a continued decline in demand for solar glass, maintaining a "sell" rating on GCL-Poly and Flat Glass.

Goldman Sachs released a research report stating that both Xinyi Solar and Flat Glass have issued profit warnings significantly below expectations. Although the stock prices of solar glass companies covered by the report have risen since April, reflecting market expectations of supply constraints and price increases under anti-intensification policies, the bank believes that the industry's downward profit pressure will deepen in the second half of this year and next year. The bank has lowered its average selling price forecast for the third quarter of this year to next year by between 9% and 20%, to 10 to 11 yuan per square meter, to reflect deteriorating supply and demand in the second half of the year and continuous deflation of raw material prices, and the bank expects the glass demand in the fourth quarter to drop even further. Based on forecasts of reduced effective production capacity, price declines, and rising costs, Goldman Sachs has lowered its EBITDA forecast for Flat Glass and Xinyi Solar for 2025 to 2026 by 58% and 73% respectively, and the average EBITDA forecast for 2027 to 2030 by 2%. The bank has slightly reduced the target price of Flat Glass H shares from 6.7 Hong Kong dollars to 6.6 Hong Kong dollars, lowered the target price of A shares from 10.3 yuan to 10.2 yuan, and maintained the target price of Xinyi Solar at 1.9 Hong Kong dollars, while maintaining a "sell" rating unchanged.