1. Event
Today, the company released its semi-annual report for 2013. in the first half of the year, the company achieved operating income of 1.107 billion yuan, of which: glass deep processing business income of 723 million yuan, an increase of 22.84% over the same period last year; float glass manufacturing business income of 360 million yuan, a decrease of 25.74% over the same period last year. The gross profit margin of the company's main business was 23.74%, an increase of 10.97% over the same period last year, of which the gross profit margin of processing business was 24.52%, an increase of 2.92% over the same period last year, and that of float business was 22.19%, an increase of 20.13% over the same period last year. The total profit realized was 31.51 million yuan, and the net profit attributed to the shareholders of the listed company was 65.26 million yuan, turning a loss into a profit compared with the same period last year.
two。 Our analysis and judgment
(1) increase in gross profit margin of float glass and contribute to profits
During the reporting period, the gross profit margin of the company's float glass business was 22.19%, an increase of 20.13% over the same period last year. This is mainly due to the company's investment in the float production line, which has achieved the company's management philosophy of "reducing cost and increasing efficiency". However, we believe that the substantial increase in gross profit margin of the float business during the reporting period is mainly due to the following two points. 1. Compared with the first half of 12 years, the price of float glass in China has improved in this period. Overall, the first quarter of 12 years is the lowest point of float glass prices in recent years, while the current glass prices, although depressed, have improved, and in the second quarter out of a small peak season. 2. The price of glass raw materials in this issue is lower than that in the same period of 12 years. In the first half of 2012, the prices of the main raw materials of glass were relatively high, in which the average price of soda ash was about 1650 yuan per ton in half a year, and that of heavy oil was about 5215 yuan per ton, while the average price of soda ash was only 1370 yuan per ton in the same period of this year. The average price of heavy oil is about 5400 yuan per ton. Through technical transformation, heavy oil as fuel can improve efficiency and reduce consumption, and there are other fuels that can be replaced, while soda ash as a raw material involved in manufacturing, the consumption is relatively rigid, so, the increase in gross profit margin in this period is closely related to the decline of raw material prices. In the future, the price of heavy oil as a fossil energy has the risk of going higher further, while the production capacity of soda ash is relatively sufficient at present, and it is expected that the price of soda ash will still be low for a period of time, so if the company continues to control costs, the results are relatively optimistic.
(2) increase in sales of engineering glass
The company belongs to a very influential company in China's building energy-saving glass market, relying on the advanced technology of Pilkington in the UK and the prospect of vigorously developing energy saving and reducing consumption in China, the company's glass deep processing business still has a bright future. The increase in sales of deep-processed glass in this period is the expected event. We believe that with the urbanization of our country and the gradual improvement of building energy conservation and environmental protection standards, the future demand for energy-saving glass will grow at least 15% a year and last for 5 years. The company is located in the economically developed coastal areas of our country, and will certainly benefit from the advantages of giving priority to energy-saving transformation in economically developed areas. if managed properly, the company's glass deep processing business is expected to expand at a rate of more than 15% a year, at that time, this is bound to become a powerful source of income for the company.
3. Investment suggestion
Considering that the company's float business will continue to control costs in the future, the possibility of increasing gross profit margin, as well as the obvious technical advantages of deep processing business and proper geographical layout, we are more optimistic about the company's future development and give it a cautiously recommended rating. The EPS for the next three years is expected to be 0.24 yuan / 0.28 yuan / 0.31 yuan in 2013-14-15.
4. Risk hint
The price of raw materials rose more than expected. The market popularization speed of building energy-saving glass is lower than expected.