Ge Long Hui·2025-08-30 03:15Core Viewpoint - The company reported a significant decline in revenue and net profit for 1H25, but there are signs of recovery in Q2, driven by strong overseas demand and expected price increases in the glass market [1][2]. Financial Performance - 1H25 revenue was 7.737 billion yuan, down 28% year-on-year; net profit attributable to shareholders was 261 million yuan, down 83%, with earnings per share at 0.11 yuan [1]. - Q2 revenue reached 3.658 billion yuan, down 26% year-on-year and down 10% quarter-on-quarter; net profit was 155 million yuan, down 79% year-on-year but up 46% quarter-on-quarter [1]. Industry Trends - The decline in revenue was primarily due to falling glass prices, while overseas sales contributed significantly to profits, with overseas revenue accounting for 30.07% of total sales in 1H25 [1]. - The company has reduced production capacity by conducting cold repairs on three glass furnaces, resulting in a current production capacity of 16,400 tons per day, which is a year-on-year decrease [1]. - The gross margin for Q2 was 16.65%, down 9.8 percentage points year-on-year but up 4.9 percentage points quarter-on-quarter, indicating a recovery trend [1]. Market Outlook - The industry is expected to reach a supply-demand balance in the second half of the year, with price increases anticipated in September, benefiting leading companies [2]. - The glass industry has seen a short-term supply-demand imbalance due to production ramp-up in March and April, but leading companies have begun to reduce production, leading to a downward trend in capacity [2]. - A rapid decrease in glass inventory days is expected to drive up glass prices, with a forecasted increase of 2 yuan per square meter for photovoltaic glass in September [2]. Profit Forecast and Valuation - The company maintains its profit forecasts for 2025 and 2026, with a target price of 18.51 yuan for A-shares, representing a 12% upside potential based on a P/B ratio of 2/1.9x for 2025/2026 [2]. - The target price for H-shares remains at 13.3 HKD, indicating a 31% upside potential based on a P/B ratio of 1.3/1.2x for 2025/2026 [2].