KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Sector View: Bullish on upstream solar segments (polysilicon & PV glass)
Key Takeaway: Structural supply reform and policy support to lift margins and reduce volatility
The solar energy sector is showing early signs of a cyclical recovery—particularly in the upstream segments of polysilicon and solar glass—driven by policy tailwinds, supply-side discipline, and cost rationalisation.
Polysilicon: ASP Recovery in Progress
Recent developments in China hint at industry consolidation and proposed price floors for polysilicon. These measures are expected to stabilise the market after a prolonged period of oversupply and price erosion.
Supply tightening and improved cost control are already triggering an uptick in average selling prices (ASPs).
As polysilicon accounts for a significant portion of upstream solar costs, margins are likely to recover first at this stage of the value chain.
Key Beneficiary:
GCL Technology Holdings Ltd (3800-HK) — YTD +13.89%
A top-tier polysilicon producer with economies of scale and strong vertical integration.
Solar Glass: Coordinated Output Cuts to Ease Margin Pressure
The solar glass segment, another upstream component critical to module assembly, is undergoing structural reform. Major manufacturers like Flat Glass Group (6865-HK) have announced a 30% production cut beginning July.
This coordinated effort seeks to combat "involution"—cutthroat price competition with shrinking margins.
With domestic output projected to fall to ~45GW, the supply-demand imbalance is expected to narrow substantially.
Plant closures and production realignment will help restore pricing power and protect earnings.
Key Beneficiaries:
🔹 Flat Glass Group Co Ltd (6865-HK) — YTD -3.85%
🔹 Xinyi Glass Holdings Ltd (0868-HK) — YTD +6.59%
Both are well-positioned due to operational scale and diversified product lines, including thinner PV glass variants such as 1.6mm.
Downstream Pressure Persists
While upstream players are enjoying margin stabilisation, downstream manufacturers may continue to face headwinds, including:
Intense price-based competition
Slower module demand recovery
Limited policy support at lower levels of the value chain
Investors should focus on upstream names with strong balance sheets, pricing power, and cost leadership.
Investment Outlook: Position for Quality Re-Rating
With the Hang Seng Index trading at 24,148.07 (+1.09% as of 9am), investors may consider increasing exposure to Hong Kong-listed upstream solar stocks.
Watchlist – Solar Upstream Stocks to Monitor:
| Stock | YTD Return | Segment |
|---|---|---|
| GCL Technology (3800-HK) | +13.89% | Polysilicon |
| Flat Glass (6865-HK) | -3.85% | PV Glass |
| Xinyi Glass (0868-HK) | +6.59% | PV/Float Glass |
| Xinyi Solar (0968-HK) | -7.32% | Solar Modules |
| Xinyi Energy (3868-HK) | +79.75% | Solar Power Ops |
| Xinte Energy (1799-HK) | -12.02% | Polysilicon/Power |
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