JP Morgan has released a research report noting that the Chinese solar photovoltaic sector has declined by an average of approximately 30% year-to-date, with valuations for some stocks approaching historical lows. The bank now adopts a selectively optimistic view on the sector, anticipating a seasonal recovery in photovoltaic demand in the second half of the year. Coupled with production halts, the supply-demand outlook for photovoltaic glass is expected to improve.

The bank has upgraded its ratings for Xinyi Solar (00968) and Flat Glass (06865) from 'Neutral' to 'Overweight', anticipating that these companies could gain more market share if industry consolidation occurs. JP Morgan maintains an 'Overweight' rating on GCL Technology (03800). The target price for Xinyi Solar has been lowered from HK$3.1 to HK$2.8, while the H-share target price for Flat Glass has been reduced from HK$9.8 to HK$8.8.

JP Morgan predicts that Flat Glass will record a loss in 2026, leading to a 1% to 9% reduction in its earnings forecasts for 2027 to 2028. For Xinyi Solar, the bank has cut its earnings estimates for 2026 to 2028 by a range of 1% to 71%.