The company announced 21FY results, annual income of 5.07 billion yuan, yoy+60%; return net profit of 740 million yuan (vs20FY is-90 million). It is basically consistent with the previous performance forecast. Corresponding to 21h2 revenue of 3.04 billion, hoh+50%; home net profit of 460 million, hoh+70%, volume and price rise to drive the company's 21h2 performance rapid growth.

The volume and price of 21FY glass products have risen, and the net profit per box of 21h2 has reached a record high of 22 yuan. The company's 21FY glass product sales revenue is 4.85 billion yuan respectively, and yoy+60%, revenue accounts for 96%. Among them, 21h2's income is 2.89 billion, hoh+48%. The overall situation of volume and price rise, the company's glass products 21FY and 21h2 sales of 3940, 2234 million boxes, 21FY yoy+8%, 21h2 hoh+33%, sales increase roughly reflects the company's production line changes. By the end of 21FY, the company had 14 float production lines, with a total production capacity of 7400t/d, of which 13 were in production (vs had 13 float production lines and 10 production capacity 6650t/d at the end of the 20th year). The average price per heavy case of 21FY and 21h2 glass products is 123,129 yuan, 21FY yoy+49%/+40 yuan and 21h2 hoh+13%/+14 yuan respectively, which is roughly consistent with the price fluctuation of float glass in the industry.

From the perspective of profitability, the single box production costs of the company's 21FY and 21h2 glass products are 80 yuan, 85 yuan, 21FY yoy+27%/+17 yuan, 21h2 hoh + 16% Unix 12 yuan, respectively. The overall production cost of 21FY for the whole year continues to rise, mainly due to fluctuations in soda ash, crude oil chain and coal chain fuel prices, and some hedging price increases improve profit margins. The gross profit margin of the company's 21FY and 21h2 glass products is 34.7% and 34.0% respectively. 21FY yoy+11.3pct and 21h2 hoh-1.8pct. Improved operating efficiency strengthens the balance sheet (for example, the asset-liability ratio of the company at the end of 21FY yoy-2.4pct to 67.5%), while the beneficiary borrowing rate is reduced. 21fy's financing cost yoy-12% to 230 million, financing cost to income ratio yoy-3.7pct to 4.6% dint 21h2 is 3.0% fuhly4.0pct; in addition, due to the increase in product sales prices, the sales expense rate and management expense rate have also decreased more. The net interest rates of 21FY and 21h2 are 14.5%, 15.2% and 17.2 pct, 21h2 hoh+1.7pct respectively. We estimate the net profit of glass products 21FY and 21h2 single case 20, 22 yuan, 21FY yoy+22 yuan, 21h2 hoh+4 yuan respectively.

Continue to pay attention to the sustainable growth potential brought by the company's float capacity improvement / cost optimization space, the rapid improvement of production and sales of 21h2 glass products, which proves that the company's float production capacity can be improved. The upward elasticity of the company's scarce floating capacity comes from: 1) continued epitaxial acquisition, 21fy completed the Fujian Longtai acquisition holding (with 1 floating normal in production and 1 under construction) and completed the wholly-owned acquisition of Huangyu Development (with a floating normal under construction). 2) the asset integration of float glass owned by major shareholders may also be promoted step by step. Under the background of the attribution of float glass production capacity resources, float glass production capacity elasticity may bring scarce growth elasticity and sustainability for the company. On the other hand, as the company gradually promotes the upgrading of kilns and makes full use of major shareholder resources / platform advantages to give full play to procurement advantages, the company's production costs may have more room for optimization; continuous repair of the balance sheet is also expected to continue to reduce the rate of financial expenses.

Paying attention to the progress of real estate demand repair, the continued growth of the company's float is scarce, maintaining the rising cost of the "buy" rating supports a higher float average price, and at the same time raising the production and sales forecast of float glass. We slightly raised the company's 23-year revenue forecast to 54,400 million yuan (the previous value is 55.0 billion yuan). Based on the more cautious supply and demand of float glass and the forecast of unit profit, the company's 23-year return net profit forecast for 22max is slightly reduced to 650 million yuan (the previous value is 780 million yuan), and the additional 24-year income and return net profit are forecast to be 75 and 1.06 billion yuan, respectively. 22-24 income and return net profit YoY are 6%, 20%, 17% and-11%, 31%, 25%, respectively. The corresponding EPS for 22-24 years (using the latest equity) is 0.36, 0.47 and 0.58 yuan respectively. The company has better flexibility for capacity expansion and room for cost reduction, and the sustainability and scarcity of growth are worth paying attention to. The company has been granted 22-year 10x PE, lowered its target price to HK $4.38, and maintained its "buy" rating.

Risk tips: lower-than-expected demand for float glass, weakening supply regulation, sharp fluctuations in raw material prices, lower-than-expected pace of capacity improvement and profitability repair, and valuation uncertainty risks brought about by different market valuation systems.