汇丰-2026年第24期EM情绪调查：熊市无立足之地-中国光伏玻璃仍在寻底-China Solar Glass Still searching for a bottom

bHSBCGObalnvestmentResearch28July2026

Equities

ElectricUtilities

ChinaSolarGlass

StillsearchingforabottomChina

uMajorplayersincludingXYSandFGGissuedprofitwarningsfor1H26amidpricecutsandassetimpairments

uSupplynowlookshealthier,withinventoriesdropping,butdemandrecoverywilltaketime;stillawaitingcatalysts

uEarningscuttoreflectfundamentalsforXYSandFGG;maintainHoldratingsonXYSandFGG-H/A

Aloss-making1H26forall:Ourcoveredsolarglasscompanies,XinyiSolar(XYS,968HK)andFlatGlass(FGG,6865HK/601865CH),alongsidetheirlistedpeersinH/A-sharemarkets,haverecentlyissuednegativeprofitalertsfor1H26.Basedon

thedisclosures,almostallmajorsolarglassproducersareexpectedtoreportlossesin1H26becauseof:1)declinesinsolarglassASPs,2)assetimpairmentsfor

equipmentandinventories,and3)weaknessinothersidebusinessessuchassolarfarmoperationsandsolarpolysilicon(seepage2fordetails).Whiletheindustryhasbeenoperatingnearbreakevenpointsince2H24,thesharpdropinlocalsolar

demandfromChinahastriggeredmoreaggressiveproductpricecutsYTD.Atthesametime,theMiddleEastconflictaddsupsiderisktoenergyinputcosts(notablynaturalgasandLNG)headinginto2H26,furtherweighingonsentiment.

Debateremainsthetimelinetodemandrecovery:Wenotethatmeaningfulsupplycutsforsolarglasshaveoccurredyear-to-date,drivenbymarket-ledexitsofless

efficientcapacity.Sometier-2andtier-3playershaveshutdownallproductionlines,whileindustryinventorieshavepivotedsinceJuly(seepage3).Demand,however,remainsthemissingelement.AsChineseregulatorshaveshiftedthepolicyfocusforrenewablepowerfromquantity(scale)toquality(utilisation),wedon’texpect

aggressivegrowthinrenewablesbuild-outduringthe15thFYP(2025-2030).Lookingforward,domesticsolarpowerbuild-outwilllikelybecomemoreofafunctionof

marketdemand/supplyforrenewablepower.AnearlyindicatortowatchistherecoveryofpowerpricesfornewsolarprojectsinChina.

MaintainHolds:WecutearningsandTPsforXYS(HKD2.30fromHKD3.90)and

FGG-H/A(HKD6.70/RMB10.30fromHKD10.70/RMB16.70),reflectingweakersolardemandandproductprices.ThesharepricesforXYSandFGG-H/Ahavedeclined

30%-40%YTD.Currentvaluationlookingforwardinto2028e,basedonlittlerecoveryinASP,looksfairtousatPE/PBsof9.4x/0.5xforXYSand12.7x/0.6xforFGG-H.

WeexpectdomesticsolarglassASPstoremainrange-boundaroundbreak-even

levelsin2026andwaitformorecatalyststosuggestanindustryturnaround,and

thereforemaintainourHoldratingsonXYSandFGG-H/A.Nevertheless,webelievebothcompaniesaregoodproxyplaysgiventheircostadvantagecomparedtopeersandhigheroverseasmarketexposure.FGG’srecentH-sharebuybacksarean

additionalpositivecatalyst.

EvanLi*

Head,AsiaEnergyTransitionResearch

TheHongkongandShanghaiBankingCorporationLimited

evan.m.h.li@.hk

+85229966619

ShaylaXu*

Associate,AsiaEnergyTransition

TheHongkongandShanghaiBankingCorporationLimited

shayla.b.xu@.hk

+85222887378

*Employedbyanon-USaffiliateofHSBCSecurities(USA)Inc,andisnotregistered/qualifiedpursuanttoFINRAregulations

Nocountryforbears

The24theditionoftheEMSentimentSurvey

Clicktoview

Disclosures&Disclaimer

ThisreportmustbereadwiththedisclosuresandtheanalystcertificationsintheDisclosureappendix,andwiththeDisclaimer,whichformspartofit.

Issuerofreport:TheHongkongandShanghaiBankingCorporationLimited

ViewHSBCGlobalInvestmentResearchat:

bHSBC

Equities●ElectricUtilities

28July2026

2

Valuationcomptable

Company

Ticker

Ccy

Rating

Price

T

P

Upside

MarketcapUSDm

PE

PB

Dividendyield(%)_

Old

New

26e

_______

26e27e28e

27e28e

26e

27e

28e

XinyiSolar

968HK

HKD

Hold

2.15

3.90

2.30

7.0%

2,508

nm

nm9.4x

0.6x

0.6x

0.5x

0.0%

0.0%

5.2%

FlatGlass-H

6865HK

HKD

Hold

6.64

10.70

6.70

0.9%

3,036

nm

nm12.7x

0.6x

0.6x

0.6x

0.0%

0.0%

2.4%

FlatGlass-A

601865CH

RMB

Hold

9.52

16.70

10.30

8.2%

3,036

nm

nm21.1x

1.0x

1.1x

1.0x

0.0%

0.0%

1.4%

XinyiEnergy

3868HK

HKD

NotRated

0.91

-

-

-

989

Triumph-H

1108HK

HKD

NotRated

2.32

-

-

-

454

Triumph-A

600876CH

RMB

NotRated

6.51

-

-

-

454

Kibing

601636CH

RMB

NotRated

5.82

-

-

-

2,543

Source:LSEGIBES(forNotRatedcompanies),HSBCestimates.Note:Pricedat27Jul2026.

1H26profitwarnings

uXYS:1H26profitisguidedat±RMB50m(1H25:RMB746m),dueto:1)lowersalesvolume

andASPofsolarglass,2)impairmentofinventoriesbasedonmarketprice,and3)increasedgridcurtailmentsandlowerpowerpriceforitssolarfarms,whichweremainlyheldbyits

subsidiaryXinyiEnergy.XinyiEnergyreportedprofitdown25%-35%y-o-yin1H26.

uFGG:willincura1H26netlossofc.RMB300m-400m(1H25:netprofitofRMB261m;1Q26:netprofitofRMB38m).FGGhasquotedlowsolarglassASP,aswellasimpairmentsof

equipmentandinventories.

uTriumphNewEnergy:warneditsnetlosswouldwidenbyc83%in1H26,quotingweakdemandandbottomingprices.

uKibingguidedanetlossofRMB150mtoRMB190mfor1H26,quotingweaknessinboththesolarglassandconstructionglassbusinesses.

1H26profitwarningsissuedbymajorsolarglasscompanies

Company

1H25netprofit(loss)

1H26netprofit(loss)

y-o-y(mid-point)

XinyiSolar

RMB746m

NetprofitofRMB50mtonetlossofRMB50m

-100%

XinyiEnergy

(solarfarmsubsidiaryofXYS)

RMB450m

RMB292mtoRMB337m

-30%

FlatGlass

RMB261m

NetlossofRMB300milliontoRMB400million

-234%

TriumphNewEnergy

NetlossofRMB449m

NetlossofRMB753mtoRMB890m

Losswideningby83%

Kibing

RMB891m

NetlossofRMB150mtoRMB190m

-119%

Source:Companydata

China:Newsolarinstallationsdown66%y-o-yin6M26

Source:NEA

bHSBC

Equities●ElectricUtilities

28July2026

3

China:SolarglassASPandinventories

Source:SCI99

Chinasolarglass:Threeoutoftentopproducers(bynominalcapacity)havesuspendedproduction

Source:SCI99,HSBC.Note:Asof23Jul2026.ThecapacitydataisbasedonnominalcapacityinChinaonlyandexcludesoverseascapacity.

Estimaterevisions

XinyiSolar

uWecutour2026-27eASPassumptionsby7-10%,toreflectlowermarketpricingandexpectationsofweakerdemandinChinainto2H26.

uWecutour2026-28esolarglasssalesvolumeassumptionsby1-11%toreflectdelaysofnewcapacityandexpectationsoffurthersupplycuts.

uWealsoassumeassetimpairmentsofRMB150mfor2026easweexpectadditionalimpairmentsforfurnacesundercoldmaintenance.

uFollowingtheabove-mentionedchanges,wecutourearningsestimatesfor2026-28eby

39%-152%.

uOurSOTP-basedtargetpriceiscuttoHKD2.30(fromHKD3.90),implying7.0%upsidefromthecurrentlevel.WemaintainourHoldratingasweexpectdomesticsolarglassASPsto

remainrange-boundaroundbreak-evenlevelsin2026andawaitcatalyststosuggestanindustryturnaround.

bHSBC

Equities●ElectricUtilities

28July2026

4

XYS:Estimaterevisions

RMBm

2026e

2027e

2028e

Revenue

New

16,306

19,988

24,918

Old

18,381

24,038

27,166

%change

-11%

-17%

-8%

Netprofit

New

(277)

101

1,816

YoY(%)

-133%

-137%

1689%

Old

530

1,686

2,987

%change

-152%

-94%

-39%

Consensus

1,416

2,298

2,887

%difference

-120%

-96%

-37%

Source:Bloombergconsensus,HSBCestimates

FlatGlass

uWecutour2026-28eASPassumptionsby7-10%,toreflectlowermarketpricingandexpectationsofweakerdemandinChinainto2H26.

uWecutour2026-28esolarglasssalesvolumeassumptionsby4%-12%toreflectdelaysinnewcapacityandexpectationsoffurthersupplycutsin2026.

uWealsoassumeassetimpairmentsofRMB150m(fromRMB50m)for2026easweexpectadditionalimpairmentsforfurnacesundercoldmaintenance.

uFollowingtheabove-mentionedchanges,welowerour2026-28eearningsestimatesby

47%-261%.

uOurDCF-basedTPforFGG-HfallstoHKD6.70(fromHKD10.70).OurA-sharetargetpriceofRMB10.30(fromRMB16.70)isconvertedfromourH-sharetargetpricebasedonourend-

2026eRMB-HKDrateof1.17(previously1.16),inlinewithHSBCFXStrategists’latest

forecasts.OurTPsforFGG-H/Aimply0.9%/8.2%upsidefromcurrentlevels.WemaintainourHoldratingsonFGG-H/AasweexpectdomesticsolarglassASPstoremainrange-bound

aroundbreak-evenlevelsin2026andawaitcatalyststosuggestanindustryturnaround.

FGG:Estimaterevisions

RMBm

2026e

2027e

2028e

Revenue

New

11,575

15,040

21,020

YoY(%)

-26%

30%

40%

Old

14,284

18,539

23,454

%change

-19%

-19%

-10%

Netprofit

New

(996)

(459)

1,058

YoY(%)

-202%

-54%

-331%

Old

(276)

513

2,006

%change

261%

-189%

-47%

Consensus

623

1,287

1,962

%difference

-260%

-136%

-46%

Source:Bloombergconsensus,HSBCestimates

bHSBC

Equities●ElectricUtilities

28July2026

5

Valuationandrisks

ValuationRisks

XinyiSolar968HK

Currentprice:

HKD2.15

Targetprice:

HKD2.30

Up/downside:

+7.0%

Methodology:SOTPvaluation

Assumptions:

uWevaluethesolarglasssegmentusingDCF,assumingarisk-

freerateof4.25%,equityriskpremiumof4.75%,equitybetaof

1.5,andcostofequityof11.4%,resultinginaWACCof9.6%(all

unchanged).Also,aterminalgrowthrateof0.5%(unchanged).

uWevaluethesolarfarmsegmentincludingXYEusingaDCF

model,assumingarisk-freerateof4.25%,equityriskpremiumof

4.75%,equitybetaof1.5,andcostofequityof11.4%,resultingin

aWACCof7.6%.Wealsoassumeaterminalgrowthrateof0%

(allunchanged).

Ourtargetpriceimplies7.0%upside.WemaintainaHoldratingon

XYSasweexpectdomesticsolarglassASPstoremainrange-bound

aroundbreak-evenlevelsin2026andwaitformorecatalyststo

suggestanindustryturnaround.

Upsiderisks:Stronger-than-expectedsolardemandglobally;supportivepoliciesonsolaranti-involution;

highersalesmixoverseasandlowerinputcostsresultinginhighermargins;higher-than-expectedpowersalesforsolarfarms.

Downsiderisks:Lower-than-expectedASPsforsolarglass;slower-than-expectedsolarfarminstallations;gridcurtailment;internationaltradetensions;andfailureto

obtainquotasforsolarprojectdevelopment.

Hold

FlatGlass6865HK

601865CH

Currentprice:

HKD6.64RMB9.52

Targetprice:

HKD6.70RMB10.30

Up/downside:

H:+0.9%

A:+8.2%

Methodology:Discountedcashflow(DCF)

Assumptions:Arisk-freerateof4.25%,riskpremiumof4.75%,andbetaof1.5,resultinginaCOEof11.4%andaWACCof9.7%.Wealsoassumeaterminalgrowthrateof0.5%(allunchanged).OurH-sharetargetprice

implies0.9%upside.

OurA-sharetargetpriceisconvertedfromourH-sharetargetprice

basedonourend-2026eRMB-HKDrateof1.17(from1.16)inline

withHSBCFXStrategists’latestforecasts.ToderiveourA-share

targetprice,wealsoapplyan80%(unchanged)premiumtoourH-

sharetargetpricetoreflectthe1-yearhistoricalvaluationgapbetweentheA-andH-shares.OurA-sharetargetpriceimplies8.2%upside.

WemaintainourHoldratingsonFGG-H/A.WeexpectdomesticsolarglassASPstoremainrange-boundaroundbreak-evenlevelsin2026andawaitcatalyststosuggestanindustryturnaround.

UpsiderisksforH/Ashares:

uStronger-than-expectedsolardemandglobally

uSupportivepoliciesonsolaranti-involution

uHighersalesmixoverseasandlowerinputcostsresultinginhighermargins

DownsiderisksfortheH/A-shares:

uWeaker-than-expectedsolardemandglobally

uFaster-than-expectedindustrycapacityexpansion

uCapacityexpansiondelaysandhigherinputcostsresultinginweakermargins

H/A:Hold/Hold

Pricedat27Jul2026

Source:HSBCestimates

bHSBC

Equities●ElectricUtilities

28July2026

6

Yearto

12/2025a

12/2026e

12/2027e

12/2028e

Profit&losssummary(CNYm)

20,861

16,306

19,988

24,918

3,630

2,620

3,539

5,478

Depreciation&amortisation

-2,171

-2,136

-2,226

-2,286

1,459

484

1,313

3,192

-321

-293

-309

-327

1,152

202

1,017

2,882

1,152

202

1,017

2,882

-492

-141

-509

-576

845

-277

101

1,816

2,108

-227

106

1,816

Cashflowsummary(CNYm)

5,656

4,522

1,351

2,475

-2,447

-3,442

-2,900

-1,200

-1,749

-3,741

-3,187

-1,493

-153

-33

0

-445

-5,112

-571

2,035

-303

3,348

1,080

-1,549

1,275

Balancesheetsummary(CNYm)

0

0

0

0

35,434

37,070

38,074

37,318

20,234

19,821

21,344

24,703

4,986

6,824

5,877

6,076

56,916

58,139

60,667

63,270

10,931

11,038

12,168

13,249

10,693

11,960

13,048

12,943

5,707

5,135

7,171

6,867

29,832

29,522

29,624

30,995

39,674

38,953

41,297

42,621

Financials&valuation:XinyiSolarHold

Financialstatements

Revenue

EBITDA

Operatingprofit/EBIT

Netinterest

PBT

HSBCPBT

Taxation

Netprofit

1.3

1.4

1.2

7.5

8.2

5.3

0.7

0.7

0.7

8.0

159.5

9.4

0.6

0.6

0.5

19.7

-9.1

7.5

0.0

0.0

5.2

*BasedonHSBCEPS(diluted)

ESGmetrics

12/2024a

12/2023e

2,189.4

No.ofboardmembers

9

6,717.6

Averageboardtenure(years)

9.0

Yes

Femaleboardmembers(%)

11.1

12/2024a

Boardmembersindependence(%)

33.3

Employeecostsas%ofrevenues

46

Yes

Source:Companydata,HSBC

*GHGintensityandenergyintensityaremeasuredinkgandkWhrespectivelyagainstrevenueinUSD‘000s

Issuerinformation

2.15

Freefloat

47%

2.30

Sector

ElectricUtilities

0968.HK

Country/Region

HongKong

968HK

Analyst

EvanLi

2,508

Contact

+85229966619

Pricerelative

HSBCnetprofit

Cashflowfromoperations

Capex

Cashflowfrominvestment

Dividends

Changeinnetdebt

FCFequity

Intangiblefixedassets

Tangiblefixedassets

Currentassets

Cash&others

Totalassets

Operatingliabilities

Grossdebt

Netdebt

Shareholders'funds

Investedcapital

Ratio,growthandpershareanalysis

Yearto

12/2025a

12/2026e

12/2027e

12/2028e

Y-o-y%change

Revenue

-4.8

-21.8

22.6

24.7

EBITDA

-16.6

-27.8

35.0

54.8

Operatingprofit

-37.3

-66.8

171.2

143.2

PBT

-40.5

-82.5

403.4

183.4

HSBCEPS

38.8

-110.7

1605.4

Ratios(%)

Revenue/IC(x)

0.5

0.4

0.5

0.6

ROIC

2.1

0.4

1.6

6.1

ROE

7.2

-0.8

0.4

6.0

ROA

1.5

0.3

1.1

4.1

EBITDAmargin

17.4

16.1

17.7

22.0

Operatingprofitmargin

7.0

3.0

6.6

12.8

EBITDA/netinterest(x)

11.3

8.9

11.4

16.8

Netdebt/equity

16.3

14.8

20.4

18.7

Netdebt/EBITDA(x)

1.6

2.0

2.0

1.3

CFfromoperations/netdebt

99.1

88.1

18.8

36.0

Persharedata(CNY)

EPSRep(diluted)

0.09

-0.03

0.01

0.20

HSBCEPS(diluted)

0.23

-0.02

0.01

0.20

DPS

0.00

0.00

0.00

0.10

Bookvalue

3.26

3.23

3.24

3.39

Keyforecastdrivers

Yearto

12/2025a

12/2026e

12/2027e

12/2028e

Solarglasssalesvolumegrowth(%)

4

-6

20

16

3.2mmsolarglassASP(RMB/sq.m)

21

17

18

20

SolarglassGPM(%)

14

-3

1

11

Cumulativesolarfarmcapacity(GW)

6

6

7

7

Newsolarfarmcapacity(GW)

0

0

0

0

Valuationdata

Yearto12/2025a12/2026e12/2027e12/2028e

EV/sales

1.6

EV/EBITDA

10.2

EV/IC

0.7

PE*

nm

PB

0.6

FCFyield(%)

6.4

Dividendyield(%)

0.0

EnvironmentalIndicators

GovernanceIndicators

GHGemissionintensity*

Energyintensity*

CO2reductionpolicy

SocialIndicators

5.8

Employeeturnover(%)

Diversitypolicy

Shareprice(HKD)

Targetprice(HKD)

RIC(Equity)

Bloomberg(Equity)

Marketcap(USDm)

6.685.684.683.682.681.68

0.68

202420252026

XinyiSolarReltoHANGSENGINDEX

6.685.684.683.682.681.68

0.68

Source:HSBC

Note:Pricedatcloseof27Jul2026

7

Financials&valuation:FlatGlassGroupHold

1.9

2.2

1.6

8.6

13.3

7.7

1.1

1.2

1.1

12.9

nm

12.7

0.6

0.6

0.6

0.5

-5.0

-4.7

2.6

0.0

2.4

*BasedonHSBCEPS(diluted)

ESGmetrics

12/2024a

12/2025a

2,241.8

No.ofboardmembers

8

6,980.4

Averageboardtenure(years)

n/a

Yes

Femaleboardmembers(%)

62.5

12/2024a

Boardmembersindependence(%)

37.5

Employeecostsas%ofrevenues

23

Yes

Source:Companydata,HSBC

*GHGintensityandenergyintensityaremeasuredinkgandkWhrespectivelyagainstrevenueinUSD‘000s

Issuerinformation

6.64

Freefloat

91%

6.70

Sector

ElectricUtilities

6865.HK

Country/Region

China

6865HK

Analyst

EvanLi

3,036

Contact

+85229966619

Pricerelative

Financialstatements

Yearto

12/2025a

12/2026e

12/2027e

12/2028e

Profit&losssummary(CNYm)

Revenue

15,567

11,575

15,040

21,020

EBITDA

3,448

1,661

2,455

4,417

Depreciation&amortisation

-1,955

-2,181

-2,380

-2,611

Operatingprofit/EBIT

1,493

-520

75

1,805

Netinterest

-413

-462

-518

-613

PBT

1,080

-981

-443

1,193

HSBCPBT

1,080

-981

-443

1,193

Taxation

-88

0

0

-119

Netprofit

981

-996

-459

1,058

HSBCnetprofit

1,033

-796

-459

1,058

Cashflowsummary(CNYm)

Cashflowfromoperations

2,911

1,882

1,520

2,805

Capex

-2,880

-2,825

-2,546

-3,772

Cashflowfrominvestment

3,082

-3,192

-2,913

-4,139

Dividends

-351

0

0

-317

Changeinnetdebt

695

1,662

1,393

1,334

FCFequity

112

-943

-1,026

-967

Balancesheetsummary(CNYm)

Intangiblefixedassets

6,253

6,180

6,096

6,000

Tangiblefixedassets

17,571

18,614

19,194

20,783

Currentassets

12,277

11,702

12,962

17,566

Cash&others

4,014

4,452

4,528

7,222

Totalassets

42,384

42,821

44,615

50,746

Operatingliabilities

5,703

5,388

6,170

7,215

Grossdebt

13,735

15,834

17,304

21,332

Netdebt

9,720

11,382

12,776

14,110

Shareholders'funds

22,515

21,168

20,709

21,767

Investedcapital

26,383

26,657

27,554

29,910

Ratio,growthandpershareanalysis

Yearto

12/2025a

12/2026e

12/2027e

12/2028e

Y-o-y%change

Revenue

-16.7

-25.6

29.9

39.8

EBITDA

-2.2

-51.8

47.8

79.9

Operatingprofit

-2.9

-134.8

2311.6

PBT

-4.3

-190.8

HSBCEPS

2.1

-176.6

Ratios(%)

Revenue/IC(x)

0.6

0.4

0.6

0.7

ROIC

6.6

-0.6

1.6

6.8

ROE

4.7

-3.6

-2.2

5.0

ROA

3.2

-1.2

0.2

3.4

EBITDAmargin

22.2

14.4

16.3

21.0

Operatingprofitmargin

9.6

-4.5

0.5

8.6

EBITDA/netinterest(x)

8.3

3.6

4.7

7.2

Netdebt/equity

43.0

53.5

61.4

64.5

Netdebt/EBITDA(x)

2.8

6.9

5.2

3.2

CFfromoperations/netdebt

29.9

16.5

11.9

19.9

Persharedata(CNY)

EPSRep(diluted)

0.42

-0.42

-0.20

0.45

HSBCEPS(diluted)

0.44

-0.34

-0.20

0.45

DPS

0.15

0.00

0.00

0.14

Bookvalue

9.61

9.04

8.84

9.29

Keyforecastdrivers

Yearto

12/2025a

12/2026e

12/2027e

12/2028e

Yearendsolarglasscapacity(tpd)

23,000

24,900

28,000

31,200

YoY(%)

0

8

12

11

Solarglasssalesvolume(mnsqm)

1,162

1,035

1,330

1,743

3.2mmsolarglassASP(RMB/sqm)

21.8

17.3

18.1

20.0

SolarglassGPM(%)

16.1

-1.4

3.1

12.4

Valuationdata

Yearto12/2025a12/2026e12/2027e12/2028e

EV/sales

2.7

EV/EBITDA

18.8

EV/IC

1.2

PE*

nm

PB

0.6

FCFyield(%)

-4.6

Dividendyield(%)

0.0

EnvironmentalIndicators

GovernanceIndicators

GHGemissionintensity*

Energyintensity*

CO2reductionpolicy

SocialIndicators

5.1

Employeeturnover(%)

Diversitypolicy

Shareprice(HKD)

Targetprice(HKD)

RIC(Equity)

Bloomberg(Equity)

Marketcap(USDm)

22.3017.3012.307.30

2.30

202420252026

FlatGlassGroupReltoHSCEI

22.3017.3012.307.30

2.30

Source:HSBC

Note:Pricedatcloseof27Jul2026

8

Financials&valuation:FlatGlassGroupAHold

1.9

2.2

1.6

8.6

13.3

7.7

1.1

1.2

1.1

21.5

nm

21.1

1.0

1.1

1.0

0.5

-5.0

-0.5

1.6

0.0

1.4

*BasedonHSBCEPS(diluted)

ESGmetrics

12/2024a

12/2025a

2,241.8

No.ofboardmembers

8

6,980.4

Averageboardtenure(years)

n/a

Yes

Femaleboardmembers(%)

62.5

12/2024a

Boardmembersindependence(%)

37.5

Employeecostsas%ofrevenues

23

Yes

Source:Companydata,HSBC

*GHGintensityandenergyintensityaremeasuredinkgandkWhrespectivelyagainstrevenueinUSD‘000s

Issuerinformation

9.52

Freefloat

21%

10.30

Sector

ElectricUtilities

601865.SS

Country/Region

China

601865CH

Analyst

EvanLi

3,036

Contact

+85229966619

Pricerelative

Financialstatements

Yearto

12/2025a

12/2026e

12/2027e

12/2028e

Profit&losssummary(CNYm)

Revenue

15,567

11,575

15,040

21,020

EBITDA

3,448

1,661

2,455

4,417

Depreciation&amortisation

-1,955

-2,181

-2,380

-2,611

Operatingprofit/EBIT

1,493

-520

75

1,805

Netinterest

-413

-462

-518

-613

PBT

1,080

-981

-443

1,193

HSBCPBT

1,080

-981

-443

1,193

Taxation

-88

0

0

-119

Netprofit

981

-996

-459

1,058

HSBCnetprofit

1,033

-796

-459

1,058

Cashflowsummary(CNYm)

Cashflowfromoperations

2,911

1,882

1,520

3,669

Capex

-2,880

-2,825

-2,546

-3,772

Cashflowfrominvestment

3,082

-3,192

-2,913

-4,139

Dividends

-351

0

0

-317

Changeinnetdebt

695

1,662

1,393

1,334

FCFequity

112

-943

-1,026

-103

Balancesheetsummary(CNYm)

Intangiblefixedassets

6,253

6,180

6,096

6,000

Tangiblefixedassets

17,571

18,614

19,194

20,783

Currentassets

12,277

11,702

12,962

17,566

Cash&others

4,014

4,452

4,528

7,222

Totalassets

42,384

42,821

44,615

50,746

Operatingliabilities

5,703

5,388

6,170

7,215

Grossdebt

13,735

15,834

17,304

21,332

Netdebt

9,720

11,382

12,776

14,110

Shareholders'funds

22,515

21,168

20,709

21,767

Investedcapital

26,383

26,657

27,554

29,910

Ratio,growthandpershareanalysis

Yearto

12/2025a

12/2026e

12/2027e

12/2028e

Y-o-y%change

Revenue

-16.7

-25.6

29.9

39.8

EBITDA

-2.2

-51.8

47.8

79.9

Operatingprofit

-2.9

-134.8

2311.6

PBT

-4.3

-190.8

HSBCEPS

2.1

-176.6

Ratios(%)

Revenue/IC(x)

0.6

0.4

0.6

0.7

ROIC

6.6

-0.6

1.6

6.8

ROE

4.7

-3.6

-2.2

5.0

ROA

3.2

-1.2

0.2

3.4

EBITDAmargin

22.2

14.4

16.3

21.0

Operatingprofitmargin

9.6

-4.5

0.5

8.6

EBITDA/netinterest(x)

8.3

3.6

4.7

7.2

Netdebt/equity

43.0

53.5

61.4

64.8

Netdebt/EBITDA(x)

2.8

6.9

5.2

3.2

CFfromoperations/netdebt

29.9

16.5

11.9

26.0

Persharedata(CNY)

EPSRep(diluted)

0.42

-0.42

-0.20

0.45

HSBCEPS(diluted)

0.44

-0.34

-0.20

0.45

DPS

0.15

0.00

0.00

0.14

Bookvalue

9.61

9.04

8.84

9.29

Keyforecastdrivers

Yearto

12/2025a

12/2026e

12/2027e

12/2028e

Yearendsolarglasscapacity(tpd)

23,000

24,900

28,000

31,200

YoY(%)

0

8

12

11

Solarglasssalesvolume(mnsqm)

1,162

1,035

1,330

1,743

3.2mmsolarglassASP(RMB/sqm)

21.8

17.3

18.1

20.0

SolarglassGPM(%)

16.1

-1.4

3.1

12.4

Valuationdata

Yearto12/2025a12/2026e12/2027e12/2028e

EV/sales

2.7

EV/EBITDA

18.8

EV/IC

1.2

PE*

nm

PB

1.1

FCFyield(%)

-4.6

Dividendyield(%)

0.0

EnvironmentalIndicators

GovernanceIndicators

GHGemissionintensity*

Energyintensity*

CO2reductionpolicy

SocialIndicators

5.1

Employeeturnover(%)

Diversitypolicy

Shareprice(CNY)

Targetprice(CNY)

RIC(Equity)

Bloomberg(Equity)

Marketcap(USDm)

28.6023.6018.6013.60 8.60

3.60

202420252026

FlatGlassGroupAReltoCSI300Index

28.6023.6018.6013.608.60

3.60

Source:HSBC

Note:Pricedatcloseof27Jul2026

bHSBC

Equities●ElectricUtilities

28July2026

9

Disclosureappendix

AnalystCertification

Thefollowinganalyst(s),economist(s),orstrategist(s)whois(are)primarilyresponsibleforthisreport,includinganyanalyst(s)whosename(s)appear(s)asauthorofanindividualsectionorsectionsofthereportandanyanalyst(s)namedasthecoveringanalyst(s)ofasubsidiarycompanyinasum-of-the-partsvaluationcertifies(y)thattheopinion(s)onthesubjectsecurity(ies)orissuer(s),anyviewsorforecastsexpressedinthesection(s)ofwhichsuchindividual(s)is(are)namedasauthor(s),andanyotherviewsorforecastsexpressedherein,includinganyviewsexpressedonthebackpageoftheresearchreport,accuratelyreflecttheirpersonalview(s)andthatnopartoftheircompensationwas,isorwillbedirectlyorindirectlyrelatedtothespecificrecommendation(s)orviewscontainedinthisresearchreport:EvanLiandShaylaXu

Importantdisclosures

Equities:Stockratingsandbasisforfinancialanalysis

HSBCanditsaffiliates,includingtheissuerofthisreport(“HSBC”)believesaninvestor'sdecisiontobuyorsellastockshoulddependonindividualcircumstancessuchastheinvestor'sexistingholdings,risktoleranceandotherconsiderationsandthatinvestorsutilisevariousdisciplinesandinvestmenthorizonswhenmakinginvestmentdecisions.Ratingsshouldnotbeusedorreliedoninisolationasinvestmentadvice.Differentsecuritiesfirmsuseavarietyofratingstermsaswellasdifferentratingsystemstodescribetheirrecommendationsandthereforeinvestorsshouldcarefullyreadthedefinitionsoftheratingsusedineachresearchreport.Further,investorsshouldcarefullyreadtheentireresearchreportandnotinferitscontentsfromtheratingbecauseresearchreportscontainmorecompleteinformationconcerningtheanalysts'viewsandthebasisfortherating.

HSBCassignsratingsonthefollowingbasis:

Thetargetpriceisbasedontheanalyst’sassessmentofthestock’sactualcurrentvalue,althoughweexpectittotakesixto12monthsforthemarketpricetoreflectthis.Whenthetargetpriceismorethan20%abovethecurrentshareprice,thestockwillbeclassifiedasaBuy;whenitisbetween5%and20%abovethecurrentshareprice,thestockmaybeclassifiedasaBuyoraHold;whenitisbetween5%belowand5%abovethecurrentshareprice,thestockwillbeclassifiedasaHold;whenitisbetween5%and20%belowthecurrentshareprice,thestockmaybeclassifiedasaHoldoraReduce;andwhenitismorethan20%belowthecurrentshareprice,thestockwillbeclassifiedasaReduce.

Ourratingsarere-calibratedagainstthesebandsatthetimeofany'materialchange'(initiationorresumptionofcoverage,changeintargetpriceorestimates).

Upside/Downsideisthepercentagedifferencebetweenthetargetpriceandtheshareprice.

Ratingdistributionforlong-terminvestmentopportunities

Asof30June2026,thedistributionofallindependentratingspublishedbyHSBCisasfollows:

Buy

61%

(13%oftheseprovidedwithInvestmentBankingServicesinthepast12months)

Hold

34%

(10%oftheseprovidedwithInvestmentBankingServicesinthepast12months)

Sell

5%

(8%oftheseprovi