CLSA’s research report wrote that the recent momentum in solar stocks stemmed from some positive signals on the supply side policies. This included a meeting held by Chinese President Xi Jinping on July 1, underscoring the legal governance of enterprises to prevent low-price disorderly competition, guiding companies to improve product quality, and promoting the orderly exit of outdated production capacity; as well as standardizing government procurement and bidding.

CLSA stated that its view on solar sector remained unchanged. It maintained a cautious stance towards solar demand, with the supply side still awaiting more catalysts or supply-side policies to aid the industry's recovery. The broker expected key measures related to energy consumption control, conversion efficiency, and production quotas to be moderately relaxed.

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In the solar industry, CLSA believed that polysilicon material leader GCL TECH (03800.HK)  -0.010 (-0.806%)    Short selling $13.17M; Ratio 3.878%   and solar glass leader XINYI SOLAR (00968.HK)  +0.010 (+0.341%)    Short selling $42.77M; Ratio 25.470%   , along with FLAT GLASS (06865.HK)  -0.040 (-0.398%)    Short selling $4.40M; Ratio 14.675%   , will become the key beneficiaries of solar supply-side policies due to higher industry integration and steeper cost curves.

CLSA's target prices and ratings for the aforementioned companies:

XINYI SOLAR (00968.HK)  +0.010 (+0.341%)    Short selling $42.77M; Ratio 25.470%   | HKD4 | Outperform | Update Date: December 10, 2024
FLAT GLASS (06865.HK)  -0.040 (-0.398%)    Short selling $4.40M; Ratio 14.675%   | HKD10 | Outperform | Update Date: April 30, 2025
GCL TECH (03800.HK)  -0.010 (-0.806%)    Short selling $13.17M; Ratio 3.878%   | HKD1.3 | Outperform | Update Date: March 31, 2025
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-07-16 12:25.)

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