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天风证券:维持中国玻璃(03300)“买入”评级 目标价4.31港元

Tianfeng Securities: maintain the "buy" rating target price of HK $4.31 for China Glass (03300)

智通財經 ·  Jul 26, 2021 11:04

Zhitong Financial APP learned that Tianfeng Securities released a research report that expected China Glass (03300) 21-23 income to be 46.449.8 / 5.58 billion yuan respectively, with a year-on-year increase of 47%, 7% and 12%, respectively, and its mother's net profit is expected to be 6.5pm 6.9 / 830 million yuan. It will reverse losses and achieve a higher level of profit in 21 years, and 6% in 22 / 23 compared with the same period last year. The current price corresponds to the company's 21-year PE of only 7.6x. With reference to the comparable company's valuation, it is approved to its 21-year 10x target PE, corresponding to the target price of HK $4.31, maintaining a "buy" rating.

Event: the company announces 21H1 profit forecast, and the net profit of 21H1 is expected to be not less than 300 million (vs20H1 and 20H2 are-280 million and + 180 million respectively).

The announcement makes it clear that the significant improvement in performance compared with the same period of time is due to many factors, including the rising prosperity of the industry, the improvement of the unit price and sales volume of the company's glass products, and the optimization and improvement of internal management level. The company's 21H1 performance forecast is in line with the bank's previous expectations, exceeding market expectations. From the perspective of supply and demand, the bank is still optimistic about the upward continuity of float glass boom; at the same time, the company's potential capacity improvement space, efficiency has room to tap; the company's performance elasticity and medium-and long-term growth potential are worthy of attention. In addition, the latest closing price (2021-07-23) corresponds to the company's 21-year PE has a significant advantage over comparable companies, indicating that the market still has a large expectation of the company.

The main points of Tianfeng Securities are as follows:

It is expected that the high boom in the float industry will continue, and the company's performance flexibility is expected to continue to be realized.

Supply side: the new production capacity of float glass is strictly restricted by the policy, and the resumption of stock production line and the rhythm of cold repair have become the core variables affecting the marginal change of supply; the short-term effective capacity increment of high boom overdraft of float glass in stages, there is a large proportion of cold repair pressure in the production capacity of superimposed industries, and the short-term supply increment may be limited.

Demand side: the scissors difference between new construction and completion contains enough upward momentum for completion, and it is more urgent for developers to speed up the completion of the carryover under the "three red lines"; in addition, under the background of the continuous improvement of building energy conservation requirements, the use of multi-layer glass has increased or contributed to a considerable increase in the demand for medium-and long-term float glass, and the bank is confident of the sustainability of the demand.

On the whole, the bank judges that the supply and demand of float glass is tight or has a certain degree of continuity. According to Zhuochuang, the national average price of 5mm is 148 yuan per heavy box (2021-7-15), with weekly, monthly and year-on-year prices of + 1, + 2 and + 64 yuan per heavy box, respectively. The price continues to hit an 11-year high. The inventory of glass production enterprises is 18.85 million heavy boxes (2021-7-16), and the week-to-week ratio, month-on-month ratio and year-on-year ratio are-111,35 and 26.18 million respectively. The traditional demand off-season inventory has not been effectively improved, and the inventory is at the lowest level in the same period in 13 years. The continuous high boom in the industry or driving the company's performance flexibility gradually appears, and the 21H1 performance forecast is verified in stages.

Attach importance to the medium-and long-term growth potential brought by the company's larger capacity improvement space and cost optimization space.

At the end of 20FY, the company has 10 production lines (a total of 13). The bank estimates that the company's 20FY effective production capacity is about 5100t/d, potential production lines resume production and acquisitions are gradually landed, and the company's effective production capacity may increase rapidly in 21 / 22 (2 lines have resumed production in June 21, corresponding to production capacity of about 1000t/d). In addition, the company's subsequent participation in the float glass asset integration of major shareholders may also be expected to bring a certain degree of capacity upward flexibility. Under the background of gradual resource attribution of float glass production capacity, float glass production capacity elasticity may bring considerable growth elasticity for the company and significantly enhance its competitiveness in the industry. On the other hand, as the company gradually promotes the renewal and upgrading of kilns and makes full use of the resources / platform advantages of major shareholders to give full play to its procurement advantages, the company's production costs may have more room for optimization; at the same time, under the background of high float boom, the company's balance sheet is gradually repaired or led to a gradual decline in financial expenses, and the company's profitability may have room for upward repair.

Risk Tips:Float glass demand is lower than expected, supply regulation weakens, raw material prices fluctuate sharply, the pace of company capacity increase and profitability repair is lower than expected, and the risk of valuation uncertainty brought about by different market valuation systems; the forecast data are preliminary results, and the specific data are based on the 2021 semi-annual report.

The translation is provided by third-party software.


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