In-depth Analysis of the Effects of Anti-Involution Policies in the Photovoltaic Glass Industry

Based on collected materials, I will systematically analyze the anti-involution policies and their actual effects in the PV glass industry where Flat Glass operates.

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In recent years, the PV industry has fallen into a deep predicament due to severe supply-demand imbalance. Between 2021 and 2025, the PV glass industry experienced a period of rampant capacity expansion. According to industry data, as of October 2025, the total domestic PV glass production capacity reached approximately 88,680 tons per day, with a compound annual growth rate (CAGR) of around 26% [1]. Against this backdrop, the industry went through a concentrated expansion period from 2022 to 2023, with a growth rate of about 86%, leading to severe overcapacity [1].

Low-price disorderly competition has severely compressed profits across the entire industrial chain, and enterprises have generally fallen into losses. PV module prices have long hovered around the cost line, and price inversion even occurred in some segments.

2025 marked a systemic inflection point for “anti-involution” in the PV industry. From the central government to ministries, policies were intensively rolled out to curb low-price competition:

• December 26, 2025
  , the Department of Industrial Development of the National Development and Reform Commission (NDRC) published an article titled “Vigorously Promote the Optimization and Upgrading of Traditional Industries”, clearly stating that for the “new three key sectors” including PV, the key lies in standardizing order and leading through innovation. During the 15th Five-Year Plan period, comprehensive rectification of “involution-style” competition will be carried out, and low-price disorderly competition will be curbed through measures such as standardizing market order, strengthening fair competition reviews, and enhancing price and quality supervision [2].

• December 26, 2025
  , the State Administration for Market Regulation (SAMR) conducted compliance guidance on price competition order for the PV industry in Hefei, Anhui, stating that it will severely investigate and punish illegal acts and effectively maintain fair market competition order by strengthening product quality supervision, enhancing price and anti-unfair competition law enforcement, and other measures [2].

• During the 2025 PV Industry Annual Conference, nearly 60 enterprises in the PV industry reached a consensus on further strengthening industry self-discipline and maintaining market order [3].
• A rumored upgraded self-discipline convention in the industry set floor prices for each segment: silicon materials at RMB 51,000/ton, silicon wafers at RMB 1.49/piece, cells at RMB 0.334/W, and modules at RMB 0.735/W [3].

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Substantial progress has been made in anti-involution efforts, with the polysilicon segment leading the bottoming rebound. According to market data, the average transaction price of N-type polysilicon feedstock has risen from RMB 41,500/ton at the beginning of the year to RMB 53,900/ton in December, representing an increase of 29.88% [4]. The price of polysilicon has risen by nearly 50% from its July low [5].

• PV module manufacturers such as LONGi Green Energy and JinkoSolar have successively raised their module quotations, with an increase range of RMB 0.02-0.05 per watt [4].
• The delivery price of TOPCon modules for domestic centralized projects ranges from RMB 0.64-0.70/W, while that for distributed projects ranges from RMB 0.66-0.70/W [3].
• Guojin Securities predicts that under the premise of effective implementation of anti-involution price control, the price of PV modules will reach RMB 0.88-0.99/W in 2026 [3].

• The slowdown in the growth of the PV market has pushed the industry into a stage of relative overcapacity. Compressed industrial profits and periodic inventory backlogs have led to a downward shift in the operating center of PV glass prices in 2025, but at the same time, they have accelerated the exit of inefficient capacity [1].
• Kiln closures and production cuts have occurred one after another in the industry, and the expansion rate began to slow down in 2024-2025 [1].

The new regulations for the PV industry have significantly raised the threshold for capacity expansion, and it is expected that the supply-demand mismatch in the industry will gradually improve in 2025 [2].

The fundamentals of the PV industry show signs of bottoming out:

• Marginal improvement in supply-demand mismatch pressure
• Industrial chain prices have stabilized and rebounded
• The magnitude of corporate losses has narrowed [2]

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Flat Glass Group Co., Ltd. is a global leader in PV glass, with its main business being the R&D, production, and sales of various types of glass. Its main products include PV glass, float glass, engineering glass, and household glass, among which PV glass accounts for approximately 90% of its revenue [6].

In 2006, through independent R&D, the company became the first domestic PV glass manufacturer to break the monopoly of international giants, with significant first-mover and scale advantages.

According to research reports from multiple institutions and investor communication information, Flat Glass delivered outstanding Q3 2025 results:

Indicator	Performance
Net Profit	Reached RMB 376 million, representing a year-on-year increase of 285.47% [7]
Non-Recurring Net Profit	Grew significantly
Inventory	Declined rapidly
Gross Margin	Remained at a relatively high level
Shipment Volume	Saw a substantial quarter-on-quarter increase

• AVIC Securities: Buy (Q3 results stabilized and rebounded, the implementation of anti-involution policies is expected to accelerate profit recovery) [6]
• Minsheng Securities: Buy (Inventory destocking coupled with profit recovery, 25Q3 results exceeded expectations) [6]
• Soochow Securities: Buy (Q3 shipments saw substantial quarter-on-quarter growth, results exceeded expectations) [6]
• Guojin Securities: Buy (Inventory declined rapidly, profit remained at a high level, results exceeded expectations) [6]

As of January 2026, the stock price of Flat Glass (HKEX: 06865; SH: 601865) has been relatively active:

• HKEX share price: approximately HK$10.30 [8]
• SH share price: approximately RMB 16.35 [8]
• Citigroup set a target price of HK$11 and upgraded its rating from “Sell” to “Neutral” [9]

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It is worth noting that the implementation of production reduction targets in the PV glass industry has not been ideal. According to investor Q&A information: “Capacity adjustments in the PV glass industry are measures taken by each company based on its own actual situation and the current market environment” [10]. This reflects the difficulties faced by industry self-discipline in actual implementation.

The effects of anti-involution policies vary significantly across different industrial chain segments:

Have achieved relatively high profits, with a significant price rebound [3]
Still face the dilemma of “being squeezed from both ends”, with rising cost pressure [3]

Gao Jifan, Chairman of Trina Solar, pointed out: “If only the silicon material segment achieves high profits while silicon wafers, cells, and modules are still losing a lot of money, this is neither healthy nor sustainable; we must coordinate the upstream and downstream sectors” [3].

The historic surge in silver prices has become an unexpected “black swan” for downstream enterprises. Data shows that the annual increase in silver prices has exceeded 140% [3]. The proportion of silver paste costs has risen to 17%, becoming the largest cost source for PV modules [4]. This has partially offset the price improvements brought by anti-involution policies.

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• 2025 was the year when the fundamentals of the PV industry bottomed out
• The demand side will face short-term pressure in 2026, but anti-involution on the supply side and the alpha of leading enterprises will help some enterprises turn losses into profits [2]

• Anti-involution has currently brought good results, and the prices of upstream industrial chain segments have returned to a reasonable level
• Prices of midstream and downstream segments also show an upward trend [2]

As a leader in the PV glass industry, Flat Glass is expected to benefit from the following aspects:

1. Industry Consolidation Dividend:
   It is expected that the industry will promote integration through mergers and acquisitions, and leading enterprises are expected to gain more market share [3]

2. New Technology Layout:
   The company’s kilns with a capacity of 1,000 tons account for over 90% of its total, with energy consumption 15%-20% lower than that of small kilns, and unit cost over 10% lower than the industry average, forming solid technical barriers [11]

3. Growth in Overseas Demand:
   Starting from April 1, 2026, China will cancel the value-added tax (VAT) refund for PV product exports, which may stimulate an increase in module exports in the short term and support the demand for PV glass [9]

1. Demand Uncertainty:
   Market demand is uncertain after April 1, 2026 [9]
2. Cost Pressure:
   Sustained rise in silver prices may erode profits
3. Industry Consolidation Speed:
   Improvements in financial statements may slow down the pace of market-oriented consolidation [2]

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The anti-involution policies in the PV glass industry have achieved initial results:

Dimension	Effect Assessment
Price Recovery	Industrial chain prices have returned to a reasonable level, with silicon materials seeing an increase of approximately 50%
Capacity Consolidation	Tail enterprises are gradually exiting, and the threshold for new capacity expansion has been raised
Corporate Profitability	The performance of leading enterprises such as Flat Glass has improved significantly, with inventory declining rapidly
Policy Implementation	An industry self-discipline convention has been reached, but challenges remain in implementation

For Flat Glass, as an industry leader, the company has significant advantages in technology, scale, and cost control, and is expected to continue to benefit from the industry’s anti-involution process. However, investors also need to pay attention to risks such as profit divergence between upstream and downstream sectors and rising silver prices.

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[1] Haitong Futures Research Institute - 2026 Soda Ash Market Outlook and Strategy (https://www.hicend.com/ftpfile/static/file/upload/file/202601/04/CQfcnwaaF0SFrBXs.pdf)

[2] HK Stock Decoder - [Top 100 Insight] Universal Rally at the Start of the Year! GCL New Energy Surged 21% on Heavy Volume, PV Sector Favors? (https://m.sohu.com/a/971857027_522913)

[3] The Paper - Silver Prices Skyrocket, Silicon Materials Continue to Rise, Can PV Modules Return to the Era of RMB 0.8/W? (https://www.thepaper.cn/newsDetail_forward_29232312)

[4] 21st Century Business Herald - Silver Prices Surge 141%, Silicon Materials Rise Sharply, PV Modules Want to Increase Prices but Can’t (https://www.yzwb.net/news/ch/202512/t20251226_304368.html)

[5] Guosheng Securities - 2025 PV Industry Research Report Views

[6] East Money - Flat Glass (601865) Stock Price Trend Chart (http://quote.eastmoney.com/sh601865.html)

[7] Sina Finance - Flat Glass 2025 Q3 Financial Report Data

[8] Xueqiu - Flat Glass (SH601865) Stock Price (https://xueqiu.com/S/SH601865)

[9] AASTOCKS - Citigroup Sets Flat Glass Target Price at HK$11, Upgrades Rating to “Neutral” (https://www.aastocks.com/tc/cnhk/quote/stock-news-content/601865/IC4823925/INFOCAST)

[10] Sina Finance - Investor Q&A: Dear Secretary of the Board, the anti-involution in the PV industry is being advanced in depth (https://finance.sina.com.cn/stock/relnews/dongmiqa/2026-01-14/doc-inhhhnwp8267738.shtml)

[11] Xueqiu Column - As an Oligarch in the PV Glass Industry, How Likely Is Flat Glass’s Technology to Be Disrupted? (https://xueqiu.com/S/SH601865)