Citigroup has issued a research report, reducing the target price for FLAT GLASS (ASX: 06865) by 33.3%, primarily due to lowered profit forecasts, while maintaining its "neutral" rating.

In light of weak demand for solar installations in China, the bank anticipates the glass business of FLAT GLASS will incur losses by 2026. This projection stems from a significant 18.2% price decline for 2.0mm solar glass so far this year, reaching 9.0 yuan per square meter.

The report notes that, according to SCI99 data, the average inventory cycle for Chinese photovoltaic glass was lengthy at 51.4 days as of June 18th. China's daily photovoltaic glass production capacity decreased by 17.8% year-on-year to 81,350 tons, which is estimated to support a monthly module output of approximately 45GW.

However, based on SMM data, China's projected module production for June is expected to fall 18.4% year-on-year to 37.8GW, indicating the market remains in a state of oversupply.