Core Viewpoint - The photovoltaic glass industry is currently experiencing weak demand, with inventory days increasing and prices dropping to RMB 11.5 per square meter, leading to near breakeven profitability for four leading companies, while others face deepening losses [1] Supply and Demand - The report indicates that by 2026, the industry's capacity utilization will become increasingly polarized, requiring a reduction of 5,000 to 20,000 tons of domestic photovoltaic glass capacity to achieve supply-demand balance [1] - Domestic demand for photovoltaic glass is expected to decline by approximately 23% to 36% due to weakened component demand next year, while overseas component demand is projected to grow by about 60 GW, reaching a total demand of 150 GW [1] - Approximately 8,800 tons of domestic capacity will still need to be allocated for direct sales of glass overseas, benefiting companies with an established overseas customer base, while those with weaker export capabilities may face operational pressures due to accumulating inventory [1] Price and Cost - The average price of 2.0mm photovoltaic glass is expected to stabilize next year, with the average price for this year being RMB 12.59 per square meter, a year-on-year decrease of 15.83% [2] - The average price for next year is projected to remain in the range of RMB 13 to 13.5 per square meter [2] Profitability - Leading companies are expected to see an increase in profit margins, with two leading firms projected to improve their overall profit margins by approximately 5 percentage points compared to this year [2] - Second-tier leading companies, such as South Glass A and Qibin Group, may see profit margins increase by 2 to 3 percentage points, while most second-tier and below companies lack an overseas customer base, making it difficult to improve profitability through exports [2]

Core Viewpoint - The photovoltaic glass industry is currently experiencing weak demand, with inventory days increasing and prices dropping to RMB 11.5 per square meter, leading to near breakeven profitability for four leading companies while others face deepening losses [1] Supply and Demand - The report indicates that by 2026, the industry's capacity utilization will become increasingly polarized, requiring a reduction of 5,000 to 20,000 tons of domestic photovoltaic glass capacity to achieve supply-demand balance [1] - Domestic demand for photovoltaic glass is expected to decline by approximately 23% to 36% due to weakened component demand next year, while overseas component demand is projected to grow by about 60 GW, reaching a total demand of 150 GW [1] - Approximately 8,800 tons of domestic capacity will still need to be allocated for direct sales of glass overseas, benefiting companies with an established overseas customer base while those with weaker export capabilities may face operational pressures due to accumulating inventory [1] Price and Cost - The average price of 2.0mm photovoltaic glass is expected to stabilize next year, with the average price for this year being RMB 12.59 per square meter, a year-on-year decrease of 15.83% [2] - The average price for next year is projected to remain in the range of RMB 13 to 13.5 per square meter [2] Profitability - Leading companies are expected to see an increase in profit margins, with two leading firms projected to improve their overall profit margins by approximately 5 percentage points compared to this year [2] - Second-tier leading companies, such as South Glass A and Qibin Group, may see profit margins increase by 2 to 3 percentage points, while most second-tier and lower-tier companies lack an overseas customer base, making it difficult to improve profitability through exports [2]

Core Viewpoint - The recent demand for photovoltaic glass has been weak, leading to an increase in inventory days and a price drop to 11.5 yuan/square meter, with four leading companies nearing breakeven profitability while others face deeper losses, indicating a widening profitability gap in the industry [1] Supply and Demand - By 2026, the capacity utilization rate for photovoltaic glass is expected to further polarize, requiring a reduction of 5,000 to 20,000 tons in domestic production to achieve supply-demand balance. Domestic component demand is projected to decline, resulting in a corresponding drop in photovoltaic glass demand of approximately 23-36%. Conversely, overseas component demand is anticipated to grow by about 60 GW compared to this year, with total demand reaching 150 GW, necessitating the allocation of 8,800 tons of domestic capacity for direct sales of glass overseas [2] Pricing and Costs - The average price of 2.0mm photovoltaic glass is expected to stabilize next year, with the average price this year being 12.59 yuan/square meter, a year-on-year decline of 15.83%. The average price next year is projected to remain between 13-13.5 yuan/square meter, adhering to the guideline of not selling below cost. There is potential for slight cost reductions due to oversupply of raw materials like heavy alkali and ultra-white quartz sand, stable natural gas prices, and a gradual decrease in the use of antimony in clarifying agents [2] Profitability - Leading companies are expected to see an improvement in profit margins, while second-tier companies face risks of further declines in profitability. Domestic leading glass companies are projected to improve profitability next year, while second-tier companies struggle to increase sales through prices below the industry average. Internationally, demand from foreign component manufacturers is expected to remain strong, with net profits likely to stay above 3 yuan/square meter. Leading companies can enhance overall profit margins by increasing overseas shipments, with the top two companies expected to see a 5 percentage point increase in comprehensive profit margins compared to this year, while second-tier companies like Nanbo A and Qibin Group may see a 2-3 percentage point increase [3] Recommended Stocks - The report recommends focusing on Xinyi Solar (00968) and Flat Glass (601865.SH), while suggesting attention to Nanbo A (000012.SZ) and Qibin Group (601636.SH) [3]

Industry Overview - Demand for photovoltaic glass is weak, with inventory days increasing rapidly and prices dropping to 11.5 yuan per square meter. Four leading companies are close to breakeven, while others are experiencing deeper losses [1] - It is anticipated that by 2026, the capacity utilization rate will further polarize, requiring a reduction of 5,000 to 20,000 tons of domestic photovoltaic glass capacity to achieve supply-demand balance [1] - Domestic component demand is expected to decline, leading to a 23-36% drop in photovoltaic glass demand, while overseas component demand may increase by approximately 60 GW, bringing total demand to around 150 GW [1] Price and Cost Analysis - The average price for 2.0mm photovoltaic glass is projected to stabilize next year, with an expected average price of 13-13.5 yuan per square meter, based on sales not falling below cost [2] - There is potential for slight cost reductions next year due to oversupply of raw materials like heavy alkali and ultra-white quartz sand, along with stable natural gas prices [2] Profitability Insights - Profit margins for leading companies are expected to improve, while second-tier companies may face continued downward pressure on profits [2] - Leading glass companies in China are projected to see improved domestic profitability, while second-tier companies struggle to increase sales through prices below the industry average [2] - Due to rising demand from foreign component manufacturers, net profits are expected to remain above 3 yuan per square meter for leading companies [2] Recommendations - Companies such as Xinyi Solar and Fuyao Glass are recommended, with a focus on South Glass A and Qibin Group [2]

Core Viewpoint - The report from CICC indicates a decline in demand for photovoltaic glass, with inventory days increasing and prices dropping to 11.5 yuan per square meter [1] Supply and Demand - By 2026, the capacity utilization rate is expected to become more polarized, with a necessary reduction in domestic photovoltaic glass production by 5,000 to 20,000 tons to achieve supply-demand balance [1] - Domestic demand for photovoltaic glass is projected to decrease by approximately 23% to 36% due to weakened component demand next year, while overseas component demand is expected to grow by about 60 GW, leading to a total demand of around 150 GW [1] - An estimated 8,800 tons of domestic capacity will need to be allocated for direct sales of glass to overseas markets [1] Pricing and Costs - The average price of 2.0mm photovoltaic glass, including tax, was 12.59 yuan per square meter this year, reflecting a year-on-year decline of 15.83% [1] - The average price for next year is expected to stabilize between 13 to 13.5 yuan per square meter, based on the guideline of not selling below cost [1] Profitability - The report suggests that leading companies may see an increase in profit margins, while second-tier companies face risks of further profit declines [1] - Recommended companies include Xinyi Solar and Flat Glass, with a suggestion to pay attention to Nanfang Glass and Qibin Group [1]

Core Viewpoint - The current core issue in the soda ash market has shifted from simple price fluctuations to a cost competition among different production processes [1][14]. Market Dynamics - As of December 16, 2025, the main contract for soda ash (SA401) closed at 1463 yuan/ton, down 2.66%, indicating ongoing volatility around the cost line [2]. - The price range of 1160 to 1190 yuan/ton has been observed, with total domestic soda ash inventory at 1.4943 million tons, remaining historically high despite a slight decrease in social inventory [5]. - The supply side has seen reduced operating rates due to losses and maintenance, while demand from the float glass industry has weakened due to ongoing losses [5][6]. Cost Structure - The production of soda ash is primarily divided into three processes: ammonia-soda process, soda-lime process, and natural soda process, with significant cost differences [14]. - The natural soda process can maintain costs below 1000 yuan/ton, while the soda-lime process has a cost center around 1050 to 1200 yuan/ton, and the ammonia-soda process exceeds 1300 yuan/ton [14]. - Companies using the ammonia-soda process are facing severe losses, leading to difficult decisions regarding production and maintenance [15]. Market Behavior - Low-cost producers are adopting strategies to increase market share, while high-cost producers are caught in a "prisoner's dilemma," where reducing production could lead to loss of market share [16]. - The industry consensus is forming around the need for high-cost capacity to exit the market to restore supply-demand balance [17]. Trading Strategies - The trading logic is evolving due to the lack of clear trends, with participants focusing on basis, price spreads, and process profits [19]. - Companies are shifting to dynamic and proportional hedging strategies, adjusting their positions based on price movements relative to production costs [20]. - The options market is becoming more active, providing new tools for companies and investors to manage uncertainty [21].

Investment Rating - The report maintains an investment rating of "Synchronize with the market - A" for the power equipment and new energy industry [1] Core Viewpoints - The industry has shown significant developments, including a major order for humanoid robots from a leading AI model company, valued at over 50 million RMB, highlighting the integration of AI and robotics [2] - The Central Economic Work Conference has set the agenda for 2026, focusing on energy independence and green transformation, which will drive the demand for renewable energy solutions [4] - The report emphasizes the importance of optimizing market pricing for centralized renewable energy generation, as outlined by the National Development and Reform Commission and the National Energy Administration [5] Summary by Relevant Sections Stock Recommendations - Recommended stocks include: - Aiyu Co., Ltd. (600732.SH) - Buy - B - Longi Green Energy (601012.SH) - Buy - B - Daqo New Energy (688303.SH) - Buy - B - Haibo Innovation (688411.SH) - Buy - A - Sungrow Power Supply (300274.SZ) - Buy - A - Deye Technology (605117.SH) - Buy - A - Langxin Group (300682.SZ) - Buy - B - Quartz Co., Ltd. (603688.SH) - Buy - A - Hengdian East Magnet (002056.SZ) - Buy - A [3][4][7] Price Tracking - The average price of polysilicon remains stable at 52.0 RMB/kg, while the average price of silicon wafers and battery cells has shown signs of stabilization after previous declines [6][8][9] Investment Suggestions - Key recommendations focus on various sectors: - BC new technology: Aiyu Co., Ltd., Longi Green Energy - Supply-side: Daqo New Energy, Fulete - Energy storage: Haibo Innovation, Sungrow Power Supply, Deye Technology - Market-oriented: Langxin Group - Domestic substitution: Quartz Co., Ltd. - Overseas expansion: Hengdian East Magnet, Bowei Alloy [10]

Core Viewpoint - The pure soda ash market is experiencing a tug-of-war around the cost line, with prices fluctuating between 1050 to 1200 RMB/ton, impacting the profitability of different production processes [2][10]. Market Dynamics - The main contract SA401 for pure soda ash has been trading in a narrow range, closing at 1126 RMB/ton on December 15, 2025, after hitting a low of 1094 RMB/ton a week earlier [2][3]. - The total inventory of domestic soda ash manufacturers was reported at 1.4943 million tons as of December 11, 2025, indicating high stock levels despite a slight decrease in social inventory [3]. - The supply side is facing challenges as some companies reduce production due to losses, while demand from the float glass industry is weakening due to ongoing losses and increased cold repair plans [3][4]. Cost Structure and Production Methods - The cost structure of soda ash production varies significantly among different methods: natural soda ash can be produced for under 1000 RMB/ton, while the dominant synthetic soda ash method has a cost center around 1050 to 1200 RMB/ton, and older ammonia-soda methods exceed 1300 RMB/ton [10][11]. - Companies using the ammonia-soda method are facing severe financial pressure, with some considering early maintenance shutdowns to mitigate losses [11][12]. Market Sentiment and Trading Strategies - Market sentiment is mixed, with participants oscillating between hope and reality, leading to a low-level wide fluctuation trend in prices [7][8]. - Traditional trend-following strategies are failing, prompting a shift towards more complex trading strategies focused on basis, price spreads, and production process profits [14][15]. - The market is seeing a rise in options trading as participants seek to hedge against volatility, with a notable increase in the use of dynamic and proportional hedging strategies [15][16]. Future Outlook - Analysts predict that the weak fundamentals of the soda ash market will continue, with expectations of a bearish trend in the short term due to persistent oversupply pressures [4][13]. - The industry consensus is forming around the need for high-cost production capacity to exit the market to restore balance, with participants awaiting a significant clearing signal [13].

Core Insights - The central economic work conference emphasizes stabilizing the real estate market and combating "involution" in competition, aiming to promote the construction of "good houses" and accelerate the establishment of a new model for real estate development [6][15] - The report suggests that the cement, glass, and certain consumer building materials industries may see continued optimization in supply-side dynamics, leading to increased concentration and improved profitability [6][15] Consumer Building Materials - The consumer building materials sector is experiencing a recovery in retail due to high demand for second-hand housing and supportive subsidy policies, with leading companies showing strong operational resilience [6][31] - Long-term demand stability and increasing industry concentration provide significant growth potential for quality leading companies in the consumer building materials sector [6][31] - Key companies to watch include Sanke Tree, Rabbit Baby, Hanhai Group, Dongfang Yuhong, China Liansu, Beixin Building Materials, Weixing New Materials, and others [6][31] Cement - National cement market prices increased by 0.05% week-on-week, with the average price at 355 RMB/ton as of December 12, 2025, reflecting a year-on-year decrease of 69.17% [6][31] - The report anticipates that cement prices will maintain a slight fluctuation in the future, with industry valuations at historical lows, highlighting companies like Huaxin Cement, Conch Cement, and others for potential investment [6][31] Glass - Float glass prices are showing mixed trends, while photovoltaic glass inventories continue to rise, with the average price of float glass at 1156 RMB/ton, down 1.0% month-on-month and 18.0% year-on-year [6][31] - The report indicates that leading glass companies have low valuations and suggests focusing on Qibin Group, Xinyi Solar, and others for investment opportunities [6][31] Fiberglass/Carbon-based Composites - The market for fiberglass is stable, with direct yarn prices holding steady, while electronic yarn prices have stabilized after previous increases [6][31] - The report identifies leading companies in the fiberglass sector, including China Jushi and others, as having a significant competitive edge [6][31] Market Data and Trends - The report notes that the consumer building materials sector has seen a year-on-year revenue decline of 4.2% in the first three quarters of 2025, with a notable improvement in revenue growth rates for leading companies [33][34] - The profitability of the consumer building materials sector is stabilizing, with net profit margins hovering at the bottom, indicating potential for recovery as market conditions improve [34][41]

Core Insights - The report emphasizes the importance of identifying investment opportunities in the building materials sector as it transitions from a period of intense competition to one focused on value extraction and growth [1]. Group 1: Investment Opportunities in the Building Materials Sector - Four key investment themes are highlighted: traditional building material leaders emerging from the bottom of the cycle, overseas capacity expansion, high-demand new materials, and policy support for industry consolidation [5]. - Traditional building material leaders are expected to recover first, with a focus on alpha opportunities as the sector stabilizes [14]. - The overseas expansion of building material capacity is driven by high demand in foreign markets, particularly in Africa, where Chinese companies are increasingly investing [20][22]. Group 2: Consumer Building Materials - The consumer building materials sector is stabilizing, with a narrowing decline in real estate indicators expected in 2026, leading to a potential rebound in demand [15]. - Strong alpha leaders in the sector are anticipated to achieve positive revenue growth first, with companies like Sanke Tree and Dongfang Yuhong highlighted as key players [15][16]. - Profit margins are expected to improve in 2026 due to price stabilization, structural optimization, and enhanced operational efficiency [15]. Group 3: Glass Fiber Industry - The glass fiber market is projected to maintain a tight supply-demand balance, with demand expected to grow by 5.8% in 2025 and 4.6% in 2026 [5][25]. - The report notes that the profitability of traditional glass fiber products is on an upward trajectory, with leading companies benefiting from differentiated product advantages [5][28]. Group 4: Cement Industry - The domestic cement market is facing a decline in demand, with expectations of a 7% drop in 2025 and a 6% drop in 2026, while overseas markets remain robust [5][31]. - The report suggests that supply-side policies will play a crucial role in stabilizing the market, with potential profitability improvements anticipated in 2026 [5][36]. Group 5: Glass Industry - The glass industry is expected to see supply optimization as a key theme in 2026, with a slight decline in demand for float glass anticipated [5][40]. - The photovoltaic glass segment is projected to experience a balanced supply-demand situation, with potential profitability improvements if production resumes [5][45].