\u3000\u3000 Flat Glass Group Co.Ltd(601865) (601865)
Leading enterprises in photovoltaic glass industry have obvious cost advantages
The company was established in Jiaxing, Zhejiang Province in 1998, listed on the Hong Kong Stock Exchange in 2015 and listed on the Shanghai Stock Exchange in 2019. It is currently a leading glass manufacturing enterprise in China. The gross profit margin of 2021h1 photovoltaic glass of the company is 50.3%, which is more than 10% lower than that of the second and third tier enterprises. It is at the leading level in the industry, mainly due to the company’s low cost of raw materials, the application of large kilns and the know-how advantages under the long-term accumulation and iteration.
The industry is at a low profit and the pattern is about to be optimized
The price of photovoltaic glass is currently at a low level. The price of 3.2mm glass has fallen to 25 yuan / m2 from 31 yuan / m2 in October. This is mainly due to the high inventory pressure of manufacturers due to the low operating rate in the downstream. At the same time, the expansion range of the industry is large. At present, the industry as a whole is at a low profit. In this context, some of the second and third tier production capacity has been delayed, and some production capacity has approached or reached the ignition conditions without ignition, which is expected to affect the subsequent promotion of production capacity, and the industry pattern is expected to be optimized.
The growth certainty of the company is high, and the superposition of multiple factors is expected to exceed expectations
The cost advantage of the company does not simply come from the big kiln, but from the long-term accumulation and iteration. Therefore, the leading position and barriers are relatively stable, and the certainty of expanding production in the low profit period of the industry is high. As the downstream is expected to gradually warm up in 2022, the permeability of wide glass is further improved, and the restrictions of energy consumption and raw materials on the expansion of second and third tier enterprises are strengthened, the company is expected to maintain high growth in the next two years, with a high probability of exceeding expectations.
Profit forecast
We are optimistic about the comparative advantage of glass links with obvious cost gap and profit before the bottom of the industry. It is predicted that the company’s revenue from 2021 to 2023 will be 10, 16.3 and 24.9 billion yuan respectively, EPS will be 1.08, 1.4 and 2.14 respectively, and the PE corresponding to the share price will be 45, 35 and 23 times respectively, giving the “recommended” investment rating.
Risk tips
The photovoltaic installation fails to meet the expectations, the downstream operating rate is lower than the expectations, and the industry competition intensifies.
