Main points of the report

Incentive system reform + employment system reform + strategic reorientation, the company welcomes the new era

The company is a Sino-foreign joint venture, state-owned background enterprise, before due to management, system, ideas did not keep up with the market, did not give full play to Yaopi's brand and technology. At the beginning of December, the company deepened the reform: 1. Talent reform: change the situation of the previous big pot of rice, give priority to those who are capable, and employ Mr. Chai Nan, who has a McKinsey background and was the general representative of Pilkington China, as the director and president of the company. 2. The reform of incentive mechanism: to change the previous mode that salespeople only rely on income to set bonuses and implement EVA performance management, in addition to income, they should also assess the use of gross profit margin, accounts receivable, inventory and working capital. 3. To reposition the strategy as differentiation and integrated competition, we should make full use of our own advantages of high-quality original films and continue to expand the proportion of deep processing.

New performance growth point next year: new product fireproof glass + Tianjin Gongbo Phase III put into production

Among the three major fund-raising projects: Tianjin Gongbo Phase III and Changshu processing projects are the further expansion of the original deep processing business, which are expected to be completed and put into production in 14 and 15 years respectively. And the new product fireproof glass has also been successfully developed, the production line is from the original ultra-white Calendering line of technical transformation, is currently being debugged, is expected to be put on the market by the end of the year. The fireproof glass produced by King Kong Glass is reinforced fireproof glass. The high borosilicate fireproof glass produced by the company has longer fireproof time, better performance and relatively high gross profit margin.

Two technical renovation lines + fund-raising projects are put into production, and the performance is expected to continue to grow rapidly the year after next.

In 15 years, the company's ultra-white calender second line and East China Yaopi steam production line will be completed and put into production, and the Changshu processing fund-raising project will also be completed and put into production, hoping to continue to bring new increments. The company has a high-quality high-end automotive glass original production line, Fuyao, Xinyi and so on are purchased from the company. In order to fully reflect the advantage premium of the original film, under the guidance of the development of deep processing business, the company is also possible to expand the automotive glass processing business. The year after next, performance is expected to achieve high growth.

Will continue to deepen the deep processing business, fully reflecting the advantage premium of the original film.

The company's core advantage lies in: technology + quality + brand + industrial chain linkage development. With the support of Pilkington, the company's float technology has been at the forefront of the domestic, leading the development of the industry. The company has both online and offline processes, and the automotive glass original film and online coating and other high-quality original film technology is leading in China. In the future, we will continue to increase the proportion of deep processing business with high profitability and continue to develop new special glass, on the one hand, enhance the competitiveness of differentiation, on the other hand, increase the proportion of self-use original film, fully reflect the advantage premium of the company's original film.

In the increasingly competitive glass industry, the company will continue to adhere to the differentiation, integrated competition strategy, continue to vigorously develop deep processing business. With the continuous production of fund-raising, technical transformation lines, and possible opportunity acquisitions in the future, the size of the company will continue to expand, and the expense rate is expected to be diluted and reduced. It is estimated that in 13-15 years, EPS0.16, 0.30,0.41, corresponding to PE36, 19, 14 times, will be recommended.

Risk points: real estate regulation leads to a slowdown in downstream demand, low progress of fireproof glass promotion and fund-raising projects.