1、 Disclosures&Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix,and with the Disclaimer,which forms part of it.Issuer of report:The Hongkong and Shanghai Banking Corporation Limited View HSBC Global Investment Research at:https:/ Find o

2、ut moreHSBC12th Annual China ConferenceShenzhen|1-2 September 2025 The plan to reduce excess polysilicon capacity is below expectations for now,but we think more is likely to follow Looking through the uncertainty,we see market and policy development favouring a speed-up in consolidation in 2026 We

3、have a Buy on GCL,which we view as a cost leader that is likely to benefit from such fast-track consolidation The wheel is turning:According to local news,the highly anticipated buyout plan on polysilicon capacity has made its the first step six low-tier producers have agreed to exit the market and

4、sell their production capacity with a total of 0.7mt,or,350GW p.a.The buyout plan,initiated by the market leaders and supported by the Chinese government,aims to 1)reduce current oversupply by buying out and shutting down excess capacity,and 2)coordinate future production of companies left in the ma

5、rket serving as a sort of“OPEC”of the polysilicon market.Below expectations for now,waiting for more:The agreed buyout plan so far will reduce current production capacity of polysilicon in China from 3.2mt(1,602GW)to 2.5mt(1,252GW)this is below expectations,as market leaders previously targeted to r

6、educe by at least 1.0mt.Indeed,the market will remain oversupplied after the buyout,as we estimate the utilisation rate of production will see limited improvement from 38%in 2025e to just 41%in 2026e as we assume a decline in global demand to 560GW.Nevertheless,we believe the negotiations are ongoin