The hottest float glass business continued to be d

The business of float glass continued to be depressed, and the solar energy industry accelerated to catch up with the bottom.

the leading advantage of the engineering glass industry continued to appear. In the first three quarters, the revenue increased significantly year-on-year, and the price was relatively stable (at present, energy-saving glass in the industry 4. Sensor glasses of different specifications can be configured according to requirements, and prices were reduced to varying degrees). At the same time, benefiting from the decline in the price of the original float glass, the engineering glass division of the company maintained a good profitability, The comprehensive gross profit margin remained at 30%. At present, the net profit of the engineering division in the first three quarters has reached the level of last year. In the first three quarters of the fine glass business, the revenue increased significantly year-on-year. The touch screen capacity was fully released and the orders were full. At present, the touch screen capacity has reached 120000 pieces/year

negative factors:

affected by sluggish demand, overcapacity, rising raw material prices and other adverse factors, the prosperity of the float glass industry continued to be depressed in the third quarter. In the first half of the year, the gross profit margin of the company's related businesses plummeted from more than 35% in the same period last year to the current level of about 20%, and the profitability fell sharply. The company's float line in Guangzhou is expected to be completed by the end of the year. At that time, the company will use natural gas instead of heavy oil as raw material, and it is expected that the cost control ability will be further improved. The company's ultra-thin glass production line was originally planned to be put into operation at the end of October. According to the current progress, the ignition will be postponed to the middle of November. The company's TCO glass production capacity has increased from 460000 square meters/year in the first half of the year to 1.8 million square meters/year. Although the revenue accounts for a relatively small proportion, the profitability is strong. At present, the price is 80 yuan/square meter (a lot lower than last year's price), and the gross profit rate is about 35%

affected by the European debt crisis and the decline in European government subsidies, the prosperity of the solar energy industry has cooled rapidly. The price of polysilicon fell from about $80/kg at the beginning of the year to $50/kg in September. After the National Day holiday, the price of polysilicon continued to fall rapidly. At present, the volatile materials in these materials can continuously release dollars/kg in the process of automobile use. Although the polysilicon production capacity of the company has been rapidly improved and its performance is excellent, its profitability still fell rapidly; The company is accelerating its efforts to reduce the production cost of polysilicon, which has fallen to USD/kg, so it still has a gross profit margin of about 30%. However, at present, the bulk cargo trading in the market has almost stalled. With the extension of time, the domestic polysilicon inventory will soon rise. If not, the load adopted in the experiment will be regarded as the sintering load If repeated experiments do not produce sintering, the price may continue to decline. If the market continues, the polysilicon price is likely to approach $30/ton at the end of October

like the polysilicon business, the ultra white calendered glass business, which contributed more profits to the company last year, also suffered from a decline in demand and a large amount of production capacity this year (as of the end of 2010, there were 17 major ultra white calendered glass production lines in China, equivalent to an annual output of about 106 million square meters, while in 2011, 9 new lines were determined to invest, with an annual output of up to 115 million square meters.), The price of ultra white calendered glass fell from the peak of more than 40 yuan/square meter last year to the current 22-23 yuan/square meter (a large decline in the third quarter), with a decrease of nearly half, which has a great impact on the profits of the company's related businesses. However, the current excess capacity rate will be reduced from 27.3% in 2015 to 24% in 2020, and it is expected that there will still be a gross profit margin of about 30%

Outlook:

the float glass industry is mainly affected by capacity expansion. The overall loss of the industry has attracted the attention of the national development and Reform Commission and other competent departments. At present, relevant ministries and commissions are organizing industrial research, and it is expected that relevant policies to encourage industry mergers and acquisitions and capacity control will be issued in the future. At present, some small lines of waterproof and cold repair have been carried out, but there has been no large-scale shutdown in 2008. The main reason is that the demand is OK. It is expected that in the future, with the promotion of affordable housing, the demand for float glass will still be well supported. However, the new lines successively launched in the second half of the year will fully release production capacity in the first half of next year, and it is expected that the prosperity of the industry will remain depressed in the short term

in terms of fine glass, it is expected that the new line will be completed in mid November. After one month, the kiln will first produce 0.77mm glass, and then gradually transition to 0.5 and 0.33mm through commissioning. However, the progress is still difficult to determine, and the company still has great confidence in ultra-thin business

the expansion plan of the company in the solar energy industry chain will significantly slow down (originally planned to achieve 1GW in 13 years), and due to the obvious late development advantage of the solar energy industry, it is expected that the company will take a discretionary approach in terms of the pace of expansion in the future

at present, the company's additional issuance project is still in the stage of environmental impact assessment. Due to the slowdown of the progress of solar energy projects, the stock price is depressed, and the company's own cash flow is relatively abundant, the implementation time of additional issuance may be postponed

profit forecast and investment suggestions

as the downturn of the solar industry was faster than expected, we lowered the company's earnings per share from 11 to 12 years to 0.72 yuan and Yuan and 0.85 yuan respectively, corresponding to PE of 14.1 times and 9.7 times respectively, giving a "recommended" rating

risk tips:

macroeconomic downside risk exceeding expectations, real estate market overshoot risk