Goldman Sachs has released a research report indicating that mainland solar industry stock prices have risen since early July, driven by upstream price adjustments amid anti-involution measures. Domestic polysilicon prices increased approximately 40% between July and August, with companies providing guidance for further price hikes in September to offset additional costs from production quota controls and capacity acquisitions.

The investment bank believes the market has already factored in polysilicon prices of 60 RMB per kilogram, but considers this level excessive given weak demand prospects and accelerating cost reduction efforts by tier-one companies. Goldman Sachs anticipates polysilicon prices could decline 20% from current levels to 42 RMB per kilogram, while module prices may remain stable at 0.67 RMB per watt.

The firm suggests the market has overlooked the rapid cost reduction capabilities of leading companies, noting that under weak demand conditions, companies will still need to pursue market share through price cuts and cost reductions. Within the sector, Goldman Sachs expresses greater optimism toward film, high-efficiency module, and silicon granule companies rather than glass manufacturers.

Consequently, the bank has assigned "sell" ratings to FLAT GLASS (06865) and XINYI SOLAR (00968), maintaining target prices of HK$6.6 and HK$1.9 respectively.