Stability Analysis Report on the Duopoly Pattern of Flat Glass (601865.SS)

Based on the comprehensive data collection and analysis above, we now present an in-depth investment research report on the stability of Flat Glass’s duopoly pattern:

---

The global photovoltaic glass industry features a typical

, with Xinyi Solar (00968.HK) and Flat Glass (601865.SS) firmly ranking as the top two globally, accounting for a combined market share of over 45%[0][1].

Indicator	Xinyi Solar	Flat Glass	Combined
2024 Daily Production Capacity (tons/day)	32,200	23,000	55,200
2024 Market Share	26.6%	19.0%	45.6%
Current Market Capitalization	$29.36B	$38.34B	$67.7B
Current Stock Price	$3.21	$16.41	-

The formation of this pattern stems from the high entry barriers in the photovoltaic glass industry:

(each production line requires an investment of approximately RMB 800-1000 million), (furnace melting technology, calendering technology, etc. require long-term accumulation), and (raw material costs such as natural gas and soda ash account for more than 50% of total costs)[1].

As of the end of December 2024, the total production capacity of China’s photovoltaic glass industry reached

, with 152 kilns and 604 production lines put into operation[1]. However, the industry is facing the challenge of overcapacity:

• 2024 capacity utilization rate was only 78.8%
  , hitting a cyclical low[1]
• In 2024, new production capacity reached 18,400 tons/day, while 22,890 tons/day of capacity was shut down for cold repair, and capacity clearing is underway[1]
• There are 102 operating kilns and 457 production lines, with operating capacity of 95,190 tons/day, a year-on-year decrease of 5.1%[1]

---

The primary stability of the duopoly pattern stems from the

:

1. Raw Material Procurement Advantage
   : Large-scale procurement of raw materials such as soda ash and quartz sand can secure significant discounts, reducing unit costs by approximately 5-8%[1]
2. Energy Cost Advantage
   : Leading enterprises have larger kilns (generally over 1000 tons/day), with unit energy consumption 15-20% lower than that of small kilns[1]
3. R&D Investment
   : Flat Glass has achieved mass production of 2.0mm ultra-thin glass, leading second-tier enterprises by 1-2 generations in technology[2]
4. Customer Resource Accumulation
   : Leading enterprises have established long-term strategic cooperative relationships with first-tier module manufacturers such as LONGi Green Energy, JinkoSolar, and JA Solar[1]

: Flat Glass delivered better-than-expected results in Q3 2025:

• EPS: $0.16 (consensus: -$0.01, beating expectations by 1215%)[0]
• Revenue: $4.73B (consensus: $3.16B, beating expectations by 49.7%)[0]
• Gross profit margin was approximately 15.08%, significantly higher than the industry average[3]

Since 2024, the photovoltaic industry has launched “anti-involution” initiatives under policy guidance, and a polysilicon capacity integration platform “Guanghe Qiancheng” has been established[4]. The photovoltaic glass industry is advancing in tandem:

• Collective Production Reduction Plan
  : The industry has voluntarily reduced production to optimize the capacity structure and accelerate the exit of backward capacity[1]
• Price Bottom Signal Emerges
  : The average tax-inclusive price of 2.0mm photovoltaic glass has dropped to
  RMB 11.5 per square meter
  , approaching the cost line of second-tier enterprises[4]
• Strong Profit Resilience of Leading Enterprises
  : Even in the industry downturn, Flat Glass’s net profit in the first three quarters reached RMB 638 million, demonstrating strong anti-cyclical capabilities[3][4]

CICC predicts that by 2026, the industry’s capacity utilization rate will be polarized: enterprises with overseas customer bases are expected to maintain high operating rates, while enterprises with weak export capabilities will face operational pressure[4].

The increase in penetration rate of double-glass modules and growing overseas demand will provide growth momentum for duopoly enterprises:

Indicator	2023	2024	2025E	2026E
Penetration Rate of Double-Glass Modules	67%	70%	75%	80%
Photovoltaic Glass Demand (10,000 tons)	2,765	3,326	3,953	4,500
Overseas Module Demand Growth (GW)	-	-	+60	+80

The increase in the penetration rate of double-glass modules means that the demand for photovoltaic glass per unit installed capacity will increase by approximately 15-20%, while the overseas market will become a new growth pole — CICC predicts that overseas photovoltaic glass demand will grow by approximately 60GW in 2026 compared to 2025[1][4].

---

Although the industry is advancing capacity clearing,

:

• In 2024, operating capacity was 95,190 tons/day, while the capacity corresponding to effective demand was approximately 80,000 tons/day[1]
• CICC predicts that to achieve supply-demand balance, domestic photovoltaic glass capacity needs to be
  reduced by 5,000-20,000 tons/day
  based on the current level[4]
• The price of photovoltaic glass is expected to remain in the range of
  RMB 13-13.5 per square meter
  in 2025, still lower than the cost line of some second-tier enterprises[4]

The price of photovoltaic glass plummeted from

in 2022 to in 2024, a drop of over 58%[1]. The price war has led to the following:

Enterprise Type	Gross Profit Margin Level	Profit Status
Duopolies (Xinyi, Flat Glass)	15-18%	Remain Profitable
Second-tier Enterprises	8-12%	On the Verge of Break-Even
Small and Medium-Sized Enterprises	<5%	Generally Loss-Making

If prices remain low for a long time, the cash flow pressure on second-tier enterprises may accelerate their exit from the market, which may intensify price competition in the short term[4].

In the cost structure of photovoltaic glass, soda ash accounts for approximately 47% and natural gas accounts for approximately 20%[1]. Fluctuations in raw material prices will directly affect corporate profitability:

• The price of soda ash has fallen from its high in 2024, but the risk of price fluctuations still exists[1]
• The price of natural gas is affected by the international energy market, with uncertainties
• Financial analysis of Flat Glass shows that the company adopts a conservative accounting policy, and the high depreciation/capital expenditure ratio indicates that the company is reserving strength for the industry downturn[0]

---

Financial Indicator	Flat Glass	Industry Average	Evaluation
ROE	1.60%	<1%	Good
Net Profit Margin	2.11%	<1%	Good
Current Ratio	1.85	>1.5	Healthy
Quick Ratio	1.67	>1.0	Healthy
Debt Risk	Low Risk	Medium-High Risk	Excellent

Financial analysis shows that Flat Glass adopts a

with a high asset depreciation ratio, indicating that the company may deliberately reduce profits during the industry downturn to reserve strength, and there is room for earnings improvement after investments mature[0].

Flat Glass maintains technological leadership in the following areas:

1. Ultra-Thin Glass Technology
   : Has achieved mass production of 2.0mm ultra-thin glass, and the 1.6mm product is in the late R&D stage[2]
2. Double-Glass Module Adaptation
   : Focuses on high-value-added products such as double-glass modules and BIPV[1]
3. Capacity Expansion Plan
   : Continuously promotes the construction of large-tonnage kilns to reduce unit costs[1]

Technical Indicator	Value	Signal Interpretation
Current Price	$16.41	-
Support Level	$15.98	Strong Support
Resistance Level	$16.61	Short-Term Pressure
Trend Judgment	Sideways Consolidation	No Clear Direction
Beta Coefficient	1.41	Higher Than Market Volatility

Technical analysis shows that Flat Glass’s stock price is in sideways consolidation within the range of

, with no clear upward or downward trend[0]. Considering the Beta coefficient of 1.41, the company’s stock price has high volatility, suitable for investors with high risk tolerance.

---

Assessment Dimension	Stability Score	Explanation
Market Share Concentration	★★★★☆	Duopolies account for 45.6% combined, pattern is stable
Scale Cost Advantage	★★★★★	Leading enterprises have significant cost advantages
Technological Barrier	★★★★☆	Technology accumulation takes time, barriers are high
Policy Support	★★★★☆	“Anti-involution” policy benefits leading enterprises
Demand Growth	★★★☆☆	Demand is growing but overcapacity pressure persists
Comprehensive Assessment	★★★☆☆	Pattern is stable in the medium term, but progress of capacity clearing needs attention

1. Duopoly Pattern is Stable in the Medium Term
   : Xinyi Solar and Flat Glass together account for 45.6% of the market share, with scale advantages, technological accumulation, and customer resources forming high entry barriers, making the pattern difficult to disrupt in the short term[1].
2. Capacity Clearing is a Key Variable
   : The industry is in an adjustment period with overcapacity. Driven by the “anti-involution” policy, backward capacity will gradually exit, and the supply-demand relationship is expected to gradually improve from 2025 to 2026[1][4].
3. Profitability is Expected to Bottom Out and Rebound
   : As prices stabilize in the range of RMB 13-13.5 per square meter and raw material costs decline, Flat Glass’s gross profit margin is expected to rebound from the current 15% to over 20% in 2026[2].
4. Overseas Market is a New Growth Pole
   : Overseas photovoltaic glass demand is expected to grow by 60GW in 2026, and duopoly enterprises with overseas customer bases will benefit first[4].

• Overcapacity Risk: If capacity clearing falls short of expectations, prices may come under further pressure
• Raw Material Cost Fluctuation: Fluctuations in soda ash and natural gas prices affect profitability
• Policy Risk: Changes in photovoltaic industry policies may affect demand
• Macroeconomic Risk: Photovoltaic installation demand is related to the global economic situation

---

[0] Jinling AI Financial Database - Flat Glass real-time quotes, company profile, financial analysis, technical analysis
[1] The Paper - “2025 China Photovoltaic Glass Industry Chain Map and Investment Layout Analysis” (https://m.thepaper.cn/newsDetail_forward_31987386)
[2] Caifuhao - “Comprehensive Summary of Key Links in the Photovoltaic Industry Chain and Related Leading Enterprises” (https://caifuhao.eastmoney.com/news/20251031212216935749820)
[3] Sohu Finance - “Overseas Demand May Increase Next Year! The Photovoltaic Glass Industry is Expected to Turn the Corner” (https://m.sohu.com/a/969319940_250147)
[4] Eastmoney - “2025 China Photovoltaic Glass Enterprise Comparative Analysis Report” (https://pdf.dfcfw.com/pdf/H3_AP202307061592075782_1.pdf)