Back to Kaisheng Technology Group, focusing on high-quality float, special glass. The company's main float glass business, has eight major production bases, daily melting volume 6900t/d, production capacity accounts for about 4% of the country, the largest shareholder Kaisheng Technology Group "311" strategic development ideas are clear, the company belongs to one of the high-quality float glass and special glass plate.
In recent years, the company's overall sales have been stable, 21H1 has benefited from the sharp rise in glass prices, profitability has significantly improved and reached an all-time high.
Three factors are expected to contribute to the company's performance growth.
1) improvement of supply and demand: demand benefits from downstream recovery, unit consumption increases, supply-side capacity release is close to the upper limit, the competition pattern improves, and the boom of the glass industry is expected to remain high under the improvement of supply and demand.
2) Glass business expansion is on the fast track: through resumption of production, acquisition, overseas self-construction, etc., the company's future production capacity is expected to increase by 67% on the basis of 21H1.
3) the inflection point of profitability improvement is now: I) the scale effect is expected to be enhanced; ii) the production capacity utilization rate is greatly increased, and the efficiency improvement inflection point is already there; iii) under the high economic environment of the glass industry, the company's profitability and debt ratio are expected to be improved.
For the first time, it is given a "better than the market" rating.
Sales benefit from the increase in new capacity, and we expect the company's 2021 to 2023 sales to grow by 15%, 20% and 20%, respectively. The price side benefits from the good supply and demand environment of the glass industry. We expect the average case price to remain at 120 yuan per box in 2021-2022. Considering the development trend of the real estate industry, the average price is expected to drop to 110 yuan per box in 2023. We expect that with the improvement of scale effect and efficiency of the company, the cost per ton will decline in an orderly manner.
Under the above assumptions, we expect the company's EPS in 2021 to 2023 to be 0.47,0.64,0.65 yuan per share respectively. Taking into account the comparable company valuation, we give the company 7 times the PE in 2021, with an exchange rate of 1HKD to 0.83RMB, with a reasonable value range of 3.96 to 4.53 Hong Kong dollars per share. Coverage for the first time, giving a "better than big city" rating
Risk hint. 1) rising costs such as soda ash and fossil fuels erode profits. 2) the demand for real estate completion and car production is lower than expected. 3) the progress of new production capacity is slow.