Bank of America Securities downgrade Cree and Fuyao Glass ratings to underperform the market.

Bank of America Securities Research Report indicates that, due to the news of production cuts and the impact of anti-"involution" policies, shares of solar glass company have risen by about 30% since the end of June. However, the price of 2mm solar glass has continued to drop in the past two weeks to 10.5-10.8 RMB per square meter, a level at which the entire industry will suffer losses. The bank believes that even if demand returns to normal levels by 2026, potential oversupply will still hinder profitability. Unless mandatory production cuts similar to those during the supply reform period of 2016-17 are implemented, it will be difficult to change the current situation of oversupply. The bank believes that current measures to support the industry are limited, and a catalyst to reverse the current situation is still out of reach. Solar glass manufacturers may continue to suffer losses until mid-2026. Considering the high valuation, the bank has lowered its target price for Xinyi Solar to 2.3 HKD, a decrease of 12%, and lowered its target price for Flat Glass by 42% to 7 HKD, with both stock ratings downgraded to underperform.