Cibin Group (601636) Annual Report Commentary Report: Steady Growth of Glass Leader Awaits Completion and Recovery

Cibin Group (601636) Annual Report Commentary Report: Steady Growth of Glass Leader Awaits Completion and Recovery

The company’s glass leading performance has steadily increased. The company released its annual report. In 2018, the company achieved operating income of 83.

78 ppm, an increase of 10 in ten years.

46%; realized net profit attributable to mother 12.

08 million yuan, an increase of 5 in ten years.

69%.

The reported company produced a total of 101.91 million heavy cases of flat glass, which increased by 6.99 million heavy cases each year, mainly benefiting from the resumed production of Zhangzhou First Line, Changxing First Line, Liling Fifth Line and the production line in Malaysia; sales of 11.003 million heavy boxes of flat glass, an increase of at least 6.75 million heavy casesRate 100.

12%.

Glass supply and demand are both weak, waiting for completion and warming up. In 2018, glass prices showed a trend of opening up and going down. From the perspective of supply, the first three quarters of the glass production line resumed the impact of penetration. According to data from China Glass Futures Network, total recovery before OctoberProduction of 16 production lines, only 11 cold repair, plus 5 new construction, so the first three quarters of a net increase of 10 production lines, the supply pressure prevented.

From the perspective of demand, the main real estate market for glass is not optimistic. The gap between the new construction and completion growth rate remains the same. The second largest demand for glass in the automotive industry is also under pressure. Therefore, overall glass demand for 18 years is relatively weak.

Initially, although glass prices opened higher and lower, the price center was higher than 17 years.

In 18 years, the average national glass price reached 1644 yuan / ton, which was 111 yuan higher each year last year, supporting the company’s good performance. At the same time, we expect the land completion data in 19 years is expected to pick up, and the new construction area in 16-17 will grow faster.It will be completed in 2 years, so theoretically the annual completion data will improve, which will lead to an improvement in glass demand.

In terms of cost, the price of soda ash, the main raw material, has stabilized. In 2017, the price of soda ash changed due to supply-side reforms. The average price has gradually reached a high level of 2193 yuan / ton. After entering 18 years, the price has stabilized and the average price has gradually decreased.To 1917.

55 yuan, soda ash price steadily promoted the company’s gross profit margin level.

We believe that the readjustment of the Qibin Group into a qualitative change will gradually smooth the impact of changes in glass prices.

First of all, the company will continue to benefit from the main production capacity layout. The company’s flat glass is mainly sold to eastern and southern China, and local demand is better.

In addition, the company is improving the overall quality of flat glass. In recent years, the company has restructured the old production line for cold repair and technical improvement to improve the quality of ordinary glass. It has changed to a new production line. The Luzhou Qibin Project has successfully produced 2-19mm ultra-white glass.Commercial operations began in early 2019, and the construction of Fuling electronic glass project progressed in an orderly manner. It is expected to be completed in May 2019 to ignite and gradually achieve 北京夜网 differentiated competition.

The company will extend downstream and vigorously develop deep processing business. In addition to the existing energy-saving glass bases, the company also announced in the annual report that it will build a new Hunan energy-saving glass factory project and Guangdong Energy-saving Phase II expansion project, further strengthening its deep processing capabilities.

Finally, the overseas Malaysian market has been continuously explored, local logistics advantages have been introduced, and the company has gone global.

Investment suggestion: As the price of glass drops, the revenue for 19-20 will be 98.

37, 110.

2.7 billion down to 93.

92, 102.

8.4 billion, net profit attributable to mothers by 16.

53, 20.

04 trillion down to 13.

33, 14.

6.1 billion yuan, EPS is 0.

5, 0.

54 yuan, 武汉夜生活网 corresponding PE is 9X, 8X times, maintaining the “buy” level.

Risk warning: a large number of production lines resume production; real estate completion demand is further reduced; new construction projects are less than expected.