27 March 2026 | 11:26AM CST Equity Research CHINA SOLAR: TRACKING PROFITABILITY INFLECTION Mar-26: Profitability improved in Film and Module but further deteriorated in Poly and Glass Our China Solar Profitability Tracker follows monthly supply/demand and inventory dynamics by sub-sector, and the spot prices/input costs implied cash GP & EBITDA margin trends for companies under our coverage. Key highlights in Mar MTD: Mengwen Wang +86(21)2401-8932 | mengwen.wang@goldmansachs.cn Goldman Sachs (China) Securit ...

Core Viewpoint - A class action lawsuit has been filed against Driven Brands Holdings Inc. for securities fraud due to significant accounting errors and internal control failures, resulting in a nearly 40% drop in stock price [1][4][10]. Group 1: Lawsuit Details - The lawsuit is pending in the U.S. District Court for the Southern District of New York, titled Clark v. Driven Brands Holdings Inc., et al., 1:26-cv-01902 [4]. - Investors have until May 8, 2026, to request to be appointed to lead the case [4][10]. - The complaint alleges violations under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of investors in Driven Brands common stock [4]. Group 2: Reasons for the Lawsuit - Driven Brands, an automotive aftermarket services company, previously assured investors of the accuracy of its financial reporting and the effectiveness of its internal controls [5]. - Allegations indicate that these assurances were materially false and misleading due to pervasive accounting errors, including lease accounting issues, unreconciled cash balances, improperly classified expenses, and improperly recognized revenue from fiscal years 2023 to 2025 [6]. Group 3: Stock Performance Impact - On February 25, 2026, Driven Brands announced it would restate its financial statements for fiscal years 2023 and 2024, along with quarterly and year-to-date financials for 2025, after identifying numerous material accounting errors [7]. - Following this announcement, Driven Brands' stock price plummeted from $16.61 per share on February 24, 2026, to $9.99 per share on February 25, 2026, marking a decline of nearly 40% [8][10].

Summary of Key Points from the Conference Call Industry Overview Basic Materials - China - **Metals Market Reactions**: Geopolitical risks, particularly in the Middle East, are impacting energy supplies and influencing metal prices. [1] - **Copper**: - LME copper price decreased by 3.6% WoW to USD 12,817/t - Domestic copper price fell by 1% to RMB 101,250/t - Domestic demand is recovering, but high Shanghai inventories are limiting spot premium improvements [1][34] - **Aluminum**: - LME aluminum price increased by 11.7% WoW to USD 3,493/t - Domestic aluminum price rose by 4.4% to RMB 24,450/t - Margins expanded to RMB 8,513/t due to expectations of tighter global supply amid rising tensions [1][34][51] - **Other Metals**: - Gold price declined by 2% WoW to USD 5,172/oz - Lithium carbonate price fell by 10% WoW to RMB 155,250/t - U₃O₈ slipped by 2.4% WoW to USD 86.8/lb - Shanghai cobalt price decreased by 0.7% to RMB 435,000/t [1][34] Steel Market - **Price Stability**: The steel market remained steady with no new policy signals from the Two Sessions. [2] - **Demand Recovery**: Post-holiday demand is recovering slowly, leading to muted buying interest. - **Price Changes**: - Rebar price rose by 0.4% WoW to RMB 3,252/t - Hot Rolled Coil (HRC) price edged down by 0.3% to RMB 3,264/t - **Inventory and Consumption**: - Finished steel inventories increased by 5.74% WoW - Apparent consumption rose by 4.35% to 6.91 million tons - **Raw Materials**: Iron ore price gained 2.06% WoW to USD 101.35/t, but margins remain negative [2][71][76]. Cement, Glass, and Paper Performance - **Cement**: - Average national cement price decreased slightly to RMB 329/t - Shipment ratio increased by 4.5 percentage points WoW to 12.1% - Inventory ratio decreased by 1.6 percentage points to 61.6% - Demand recovery is slow, with some regions lowering prices [3][94]. - **Glass**: - National average float glass price increased by 0.89% WoW to RMB 1,175/t - Xinyi float glass gross profit margin (GPM) expanded by 0.8 percentage points to 11.0% [3][102]. - **Paper**: - Paper prices increased by 1.2% WoW to RMB 3,625/t - Waste paper prices rose by 1.0% WoW to RMB 1,555/t [3][103]. Solar Materials - **Polysilicon Prices**: - N-type polysilicon price decreased by RMB 6/kg to RMB 50/kg (including VAT) - N-type granular silicon price fell by RMB 10/kg to RMB 45/kg (including VAT) [3][113]. - **Solar Glass**: - Prices for 3.2mm and 2.0mm coated solar glass remained stable at RMB 17.75/sqm and RMB 10.75/sqm, respectively - Daily capacity for solar glass production decreased to 88,100t/day, with inventory days expanding to 42.08 [3][115][127]. Additional Insights - **Geopolitical Risks**: The ongoing geopolitical tensions are significantly affecting the basic materials market, particularly in aluminum and copper sectors [1][34]. - **Market Dynamics**: The interplay between supply, demand, and geopolitical factors is crucial for understanding price movements in metals and construction materials [1][2][3].

Financial Data and Key Metrics Changes - Consolidated net revenue for Q4 2025 was approximately flat at $748 million, compared to $750 million in the same period last year [15] - Adjusted EBITDA for Q4 2025 increased to a record $142 million, reflecting a record adjusted EBITDA margin of 19% [17] - Adjusted net income increased to $88 million, or $3.24 per diluted share [17] - The adjusted return on invested capital for 2025 was 24%, consistent with the previous three years [7] Business Line Data and Key Metrics Changes - Same-branch sales for the installation segment were down 2% for Q4, with a 23% increase in commercial same-branch sales offsetting a 9% decline in new residential same-branch sales [15] - Heavy commercial same-branch sales growth was strong at 38% during Q4 2025 [16] - Residential sales growth within the installation segment was down 4% on a same-branch basis for 2025 [8] Market Data and Key Metrics Changes - Single-family starts decreased by 7% from the prior year, while multifamily starts were up 18% for the same period [11] - The commercial end market saw installation segment sales up 10% on a same-branch basis from the prior year [9] Company Strategy and Development Direction - The company remains focused on profitable growth and maximizing returns for shareholders while continuing to invest in strategic acquisitions [6][10] - The core residential installation market is highly fragmented, presenting considerable opportunities for consolidation [10] - The company plans to acquire at least $100 million of annual revenue in 2026 [11] Management's Comments on Operating Environment and Future Outlook - The company expects home building activity to remain challenging in the near term, but the long-term outlook for installed services remains positive [6] - Management is optimistic about the fundamentals of the industry and the company's competitive positioning [12] - The company anticipates some level of rebuilding of inventories in the entry-level market, which could lead to a positive inflection [30] Other Important Information - The company repurchased 150,000 shares of common stock at a total cost of $38 million in Q4 2025 and 850,000 shares at a total cost of $173 million during the full year [21] - A new $500 million stock buyback program was authorized, replacing the previous program [21] - The board declared a $1.80 per share annual variable dividend, a nearly 6% increase over the previous year [22] Q&A Session Summary Question: Confidence in protecting margins amid price deflation - Management acknowledged the pressure on margins but expressed confidence in the performance of the commercial business and the ability to manage costs effectively [26][27] Question: Investment in commercial business - Management indicated that there is room for both organic and M&A growth in the commercial sector, with plans to pursue opportunities as they arise [32][35] Question: M&A landscape and strategy - Management confirmed interest in the commercial roofing segment and emphasized ongoing efforts in the mechanical and industrial installation areas [45][46] Question: Growth in complementary products - Management reported continued good uptake in complementary products, particularly in the heavy commercial business, and noted that this growth is expected to continue [55][56] Question: Impact of weather on Q1 results - Management estimated that weather-related impacts in January and February would result in a revenue loss of about $20 million for Q1 [78] Question: Multifamily market outlook - Management expressed confidence in the multifamily market, noting that cycle times have normalized and backlogs are growing [111][112]

Core Viewpoint - The initial optimism regarding Apogee Enterprises, Inc. (APOG) at mid-forties levels has proven to be premature, indicating a need for a reassessment of the company's prospects [1]. Group 1 - The service "Value in Corporate Events" covers major corporate events such as earnings reports, M&A, and IPOs, providing actionable investment ideas [1][2]. - The investment group focuses on identifying opportunities through significant corporate events, analyzing around 10 major events monthly [2]. Group 2 - The analyst holds a beneficial long position in APOG shares, indicating a personal investment interest in the company [3]. - The article reflects the author's opinions and is not influenced by compensation from any company mentioned [3].

Company Overview - TopBuild Corp. (NYSE:BLD) specializes in supplying and installing insulation and building materials, including glass, roofing, gutters, and shelving [1] Market Position - The stock is currently trading at 20 times earnings, indicating a strong market position in the insulation sector [1] - Despite the company's potential, the stock is perceived to be ahead of its fair value, especially as the broader building materials cohort is experiencing declines [1] Investment Insights - Jim Cramer suggests that while TopBuild Corp. is a solid company, it may be prudent for investors to trim their positions due to its recent performance [1] - There are indications that certain AI stocks may present better investment opportunities with higher upside potential and lower downside risk compared to TopBuild Corp. [1]

Core Insights - Corning Incorporated is a leading innovator in materials science, focusing on glass, ceramics, and optical physics, with operations in display technologies, optical communications, and specialty materials [1] - The company faces competition from firms like 3M and AGC Inc. in the materials and technology sectors [1] Price Target Trends - Corning's consensus price target has increased significantly over the past year, from $67.27 a year ago to $82.50 last month, indicating growing analyst optimism [2][4] - Three months ago, the average price target was $77.13, reflecting a steady increase in analysts' expectations regarding Corning's performance [3] - The upward trend in the price target suggests that analysts are increasingly confident in Corning's business segments and market position [3][4] Earnings Expectations - Analysts expect significant growth in Corning's Optical and Specialty Materials segments, which is driving positive sentiment [2][6] - Corning has a strong track record of exceeding earnings expectations, suggesting potential for an earnings beat in its upcoming report [4][6] - The overall upward trend in the consensus price target indicates confidence in Corning's ability to leverage its diverse business operations and market opportunities [5][6]

Group 1 - TopBuild Corp. (NYSE:BLD) is involved in supplying and installing insulation and building materials for various construction markets, including residential, commercial, and industrial [1] - Jim Cramer expressed concerns about the stock being overvalued despite liking the company, suggesting that investors should consider trimming their positions [1] - Truist raised the stock price target for TopBuild from $370 to $390 while maintaining a Hold rating, citing the company's acquisition of Specialty Products as a factor that enhances its industrial insulation distribution and fabrication capabilities [1] Group 2 - Following the acquisition and a recent commercial roofing installation deal, non-residential operations now account for 47% of TopBuild's business [1]

Summary of Conference Call Transcript Industry Overview - **Industry**: China Auto Supply Chain - **Company**: Tesla Key Points and Arguments 1. **Launch of Lower-Cost Model 3/Y**: Tesla has introduced a more affordable version of its Model 3/Y SUV priced at US$36,990 and US$39,990, featuring simplified interiors and exteriors, fewer amenities, and a reduced range. Deliveries are scheduled to begin in November, with production starting at Tesla's US plant first, followed by the Shanghai plant anticipated to launch in Q126. This move aims to target price-sensitive customers [2][4][5]. 2. **Potential Suppliers for Lower-Cost Model 3/Y**: - Tuopu: Chassis parts, interiors, and thermal management parts with a potential content value per vehicle (CPV) of Rmb8,000-9,000 - Sanhua: Thermal management system supplier with a potential CPV of Rmb2,500-3,000 - Fuyao: Glass supplier with a potential CPV of Rmb800-1,000 - Shuanghuan: Supplier of transmission gears with a potential CPV of Rmb500 - Minth: Trim of side window with a potential CPV of lower than Rmb500 - Keboda: Controllers of interior lights with a potential CPV of lower than Rmb100 [3][6]. 3. **Sales Growth and Market Expansion**: Tesla reported 3Q25 deliveries of 497k vehicles, a quarterly record, representing a 29% increase quarter-over-quarter and a 7% increase year-over-year. The newly released lower-cost Model 3/Y is expected to further boost sales volume. Tesla's supply chain is expanding its client base to domestic OEMs, including traditional OEMs and EV startups [4][5]. 4. **Sector Implications**: The launch of new models is expected to act as a share price catalyst for supply chain companies in the short term. In the long term, rising content value per vehicle is anticipated to be a key growth driver for China's auto parts suppliers [5]. Important but Overlooked Content 1. **Risks to the Auto Parts Sector**: Potential risks include dampened demand for auto parts due to lower auto production, price pressure from automakers, intensified competition, higher costs due to raw material inflation, worse-than-expected sector consolidation, and product recalls due to quality issues [8]. 2. **Client Expansion**: Tesla's supply chain is actively expanding its client base to include both traditional OEMs and EV startups, which may provide additional growth drivers [4]. 3. **Content Value Growth**: The report emphasizes that the rising content value per vehicle will be crucial for the growth of auto parts suppliers in China, indicating a shift towards more integrated and higher-value components in vehicles [5].

Core Insights - Apogee Enterprises, Inc. (APOG) is set to announce its second-quarter fiscal 2026 results on October 9, with earnings estimated at 86 cents per share, reflecting a year-over-year decline of 40.3% [1][3] Earnings Estimates - The Zacks Consensus Estimate for APOG's second-quarter earnings has remained unchanged over the past 60 days, indicating stability in expectations despite the anticipated decline [1][2] - The Earnings Surprise Prediction (ESP) for Apogee is 0.00%, and it currently holds a Zacks Rank of 3 (Hold) [4][3] Performance Factors - The Architectural Services segment is expected to have positively influenced Apogee's fiscal second-quarter performance, driven by improved pricing and a strategic shift towards premium products [5] - The Architectural Glass segment has benefited from a better sales mix and productivity improvements, likely enhancing margins in the second fiscal quarter [6] Challenges and Headwinds - Apogee anticipates ongoing inflationary pressures and supply chain disruptions, which may hinder production levels due to labor constraints [7] - The company expects tariffs to negatively impact earnings per share by 45-55 cents in the first half of fiscal 2026, affecting second-quarter margins [8] Stock Performance - Apogee's stock has declined by 42.4% over the past year, significantly underperforming compared to the industry average decline of 20.6% [9]