Report Summary 1. Report Industry Investment Rating No information provided. 2. Core View of the Report The glass industry has a weak fundamental outlook. In the short term, it is expected to operate with a weak and fluctuating trend. The supply has declined to a relatively low level, and there are more disturbances on the supply side recently, but the terminal demand recovery is weak [3][7]. 3. Summary by Relevant Catalogs Glass Futures Market - The closing price of the main contract was 1091 yuan/ton, a decrease of 3.19% from the previous value. The spot price of Shahe Safety large - size glass was 1048 yuan/ton, an increase of 0.38% from the previous value. The main basis was - 43 yuan/ton, a decrease of 48.19% from the previous value [8]. Glass Spot Market - The market price of 5mm white glass large - size boards in Hebei Shahe, the spot benchmark, was 1048 yuan/ton, an increase of 4 yuan/ton from the previous day [13]. Fundamental Analysis - Cost Side No detailed content provided. Fundamental Analysis - Production - The number of operating national float glass production lines was 226, with an operating rate of 76.35%. The number of operating production lines was at a historical low for the same period. The daily melting volume of national float glass was 161,300 tons, and the production capacity was at the lowest level in the same period in history and was stabilizing and recovering [24][26]. Fundamental Analysis - Demand - In August 2025, the apparent consumption of float glass was 4.8602 million tons. The real - estate terminal demand was still weak, and the number of orders from glass deep - processing enterprises was at a historical low for the same period. The capital collection in the deep - processing industry was not optimistic, and traders and processors were cautious, mainly digesting the original glass inventory [30][6]. Fundamental Analysis - Inventory - The inventory of national float glass enterprises was 65.79 million weight boxes, a decrease of 1.24% from the previous week. The inventory was running above the 5 - year average [45]. Fundamental Analysis - Supply - Demand Balance Sheet - The supply - demand balance sheet from 2017 to 2024E shows changes in production, consumption, and other indicators. For example, in 2024E, the production was 55.1 million tons, the consumption was 53.1 million tons, and the production growth rate was 3.94%, while the consumption growth rate was - 1.15% [46]. Influencing Factors - **Positive Factors**: Under the influence of the "anti - involution" policy, there is an expectation of production capacity clearance in the float glass industry. There are more disturbances on the supply side due to the "coal - to - gas" conversion of some production lines in the Shahe area [5]. - **Negative Factors**: The real - estate terminal demand is weak, and the number of orders from glass deep - processing enterprises is at a historical low for the same period. The capital collection in the deep - processing industry is not optimistic, and traders and processors are cautious [6]. Main Logic The glass supply has declined to a relatively low level for the same period. Recently, there have been more disturbances on the supply side, but the terminal demand recovery is weak. It is expected that the glass will mainly operate in a fluctuating manner [7].

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoint The glass market has a weak fundamental situation, with supply at a low level and showing signs of a slight rebound, while terminal demand remains sluggish. The report anticipates that the glass market will mainly experience a volatile and weak trend in the short term [2]. 3. Summary by Relevant Catalogs Glass Futures Market - The closing price of the main contract was 1113 yuan/ton, showing a 1.64% increase; the spot price of Shahe Safety large - sized sheets was 1044 yuan/ton, a 0.76% decrease; the main basis was - 69 yuan/ton, a 60.47% increase [7]. Glass Spot Market - The market price of 5mm white glass large - sized sheets in the spot benchmark area of Hebei Shahe was 1044 yuan/ton, down 8 yuan/ton from the previous day [12]. Fundamental Analysis Cost - side No specific content was summarized in the given text. Production and Supply - The number of operating national float glass production lines was 226, with an operating rate of 76.35%, and the daily melting volume was 161,300 tons, at the lowest level in the same period in history but showing signs of stabilization and recovery [23][25]. Demand - In August 2025, the apparent consumption of float glass was 4.8602 million tons. Downstream processing plant orders were generally weak, and real - estate terminal demand was sluggish [29]. Inventory - The inventory of national float glass enterprises was 66.613 million weight boxes, a 3.64% increase from the previous week, and the inventory was above the five - year average [44]. Supply - Demand Balance Sheet - From 2017 to 2024E, the production, consumption, and other data of float glass showed certain fluctuations. For example, in 2024E, the production was 55.1 million tons, with a growth rate of 3.94%, and the consumption was 53.1 million tons, with a decline rate of 1.15% [45]. Influencing Factors Positive Factors - Under the influence of the "anti - involution" policy, there is an expectation of capacity clearance in the float glass industry. Some production lines in the Shahe area are undergoing "coal - to - gas" conversion, increasing supply - side disturbances [4]. Negative Factors - Real - estate terminal demand remains weak, and the number of orders from glass deep - processing enterprises is at a historical low in the same period. The capital collection situation in the deep - processing industry is not optimistic, and traders and processing plants are cautious, mainly focusing on digesting raw glass inventory [5]. Main Logic - Glass supply has declined to a relatively low level in the same period, and there have been more supply - side disturbances recently. However, the recovery of terminal demand is weak, so it is expected that the glass market will mainly show a volatile trend [6].

Core Viewpoint - The float glass market is experiencing a decline in prices, reaching a new low in over three months, but the short-term downside is considered limited despite a weak fundamental outlook [1][6]. Group 1: Market Dynamics - The float glass main contract prices have been continuously declining since late October, indicating a weak market sentiment [1]. - The production lines in the Shahe region are transitioning from self-produced coal gas to clean energy, which may lead to temporary supply contractions and affect market sentiment [2]. - The overall daily melting capacity of float glass in China has slightly increased, reaching 161,300 tons with an operating rate of 76.35% as of October 23, 2023 [2]. Group 2: Demand and Supply Analysis - The demand from downstream processing enterprises is weak, with order volumes significantly down over 20% compared to the same period last year [4]. - The average order days for sample enterprises have decreased to 10.4 days, marking the lowest level since 2019 [4]. - Despite the current weak demand, there is potential for seasonal improvement in demand towards the end of Q4, driven by an increase in housing completion rates [5]. Group 3: Inventory and Pricing Trends - The float glass industry is facing a supply surplus with inventory levels at a three-year high, leading to continued accumulation of stock [5]. - As of October 23, total inventory reached 66.613 million heavy boxes, up 3.64% from the previous period [5]. - The market is currently characterized by strong supply and weak demand, but the continued decline in prices may limit further downside risks [6].

Report Summary 1. Report Industry Investment Rating No investment rating is provided in the report. 2. Core View The glass market has a weak fundamental outlook, and it is expected to fluctuate weakly in the short term [3]. 3. Summary by Relevant Catalogs 3.1 Daily View - The fundamentals of glass are weak, with many supply - side disturbances due to policies in the Shahe area, but weak downstream deep - processing orders and sluggish real - estate terminal demand [3]. - The basis shows that the futures price is at a premium to the spot price, with a basis of - 31 yuan [3]. - The inventory of national float glass enterprises is 64.276 million weight boxes, an increase of 2.31% from the previous week, and the inventory is above the 5 - year average [3]. - The price is below the 20 - day moving average, and the 20 - day moving average is downward [3]. - The main position is net short, with a reduction in short positions [3]. - The glass market is expected to fluctuate weakly in the short term [3]. 3.2 Influence Factor Summary 3.2.1利多 - Under the influence of the "anti - involution" policy, there is an expectation of capacity clearance in the float glass industry [5]. - The "coal - to - gas" conversion of some production lines in the Shahe area has increased supply - side disturbances [5]. 3.2.2利空 - The real - estate terminal demand remains weak, and the order volume of glass deep - processing enterprises is at a historical low for the same period [6]. - The capital collection in the deep - processing industry is not optimistic, and traders and processors are cautious, mainly digesting the original film inventory [6]. 3.3 Main Logic - Glass supply has declined to a relatively low level compared to the same period, with increasing supply - side disturbances recently, but the terminal demand recovery is weak. It is expected that the glass market will fluctuate [7]. 3.4 Glass Futures Market - The closing price of the main contract increased by 1.59% to 1147 yuan/ton, the Shahe safety large - board spot price decreased by 0.71% to 1116 yuan/ton, and the main basis increased by 520% to - 31 yuan/ton [8]. 3.5 Glass Spot Market - The market price of 5mm white glass large - board in Hebei Shahe, the spot benchmark, is 1116 yuan/ton, a decrease of 8 yuan/ton from the previous day [13]. 3.6 Fundamental - Cost Side No specific content is summarized in the provided report. 3.7 Fundamental - Production and Capacity - The number of national float glass production lines in operation is 225, with an operating rate of 76.01%, and the number of operating production lines is at a historical low for the same period [24]. - The daily melting volume of national float glass is 161,300 tons, with the production capacity at the lowest level in the same period in history and showing a stable recovery [26]. 3.8 Fundamental - Demand - In August 2025, the apparent consumption of float glass was 4.8602 million tons [30]. 3.9 Fundamental - Inventory - The inventory of national float glass enterprises is 64.276 million weight boxes, an increase of 2.31% from the previous week, and the inventory is above the 5 - year average [46]. 3.10 Fundamental - Supply - Demand Balance Sheet The report provides the annual supply - demand balance sheet of float glass from 2017 to 2024E, including data on production, apparent supply, consumption, production growth rate, consumption growth rate, and net import ratio [47].

Report Summary 1. Report Industry Investment Rating The report does not provide an industry investment rating. 2. Core View The fundamentals of glass are weak, and it is expected to fluctuate weakly in the short term [3]. 3. Summary by Relevant Catalogs Glass Futures Market - The closing price of the main contract was 1129 yuan/ton, a decrease of 0.79% from the previous value; the spot price of Shahe Safety large - board glass was 1124 yuan/ton, a decrease of 0.71% from the previous value; the main basis was - 5 yuan/ton, a decrease of 16.67% from the previous value [8]. Glass Spot Market - The market price of 5mm white glass large - board in Hebei Shahe, the spot benchmark, was 1124 yuan/ton, down 8 yuan/ton from the previous day [13]. Fundamentals - Cost Side - The report mentions glass production profit but does not provide specific data. Fundamentals - Supply - The number of operating national float glass production lines was 225, with an operating rate of 76.01%, at a historically low level in the same period. The daily melting volume of national float glass was 161,300 tons, at the lowest level in the same period in history and showing a stable recovery [24][26]. Fundamentals - Demand - In August 2025, the apparent consumption of float glass was 4.8602 million tons [30]. Fundamentals - Inventory - The inventory of national float glass enterprises was 62.824 million weight - boxes, an increase of 5.84% from the previous week, and the inventory was running above the five - year average [46]. Fundamentals - Supply - Demand Balance Sheet - From 2017 to 2024E, the production, consumption, and other data of float glass showed different trends. For example, in 2024E, the production was 55.1 million tons, with a growth rate of 3.94%, and the consumption was 53.1 million tons, with a growth rate of - 1.15% [47]. Influencing Factors - **Positive Factors**: Under the influence of the "anti - involution" policy, there is an expectation of capacity clearance in the float glass industry. Some production lines in the Shahe area are undergoing "coal - to - gas" conversion, increasing supply - side disturbances [5]. - **Negative Factors**: The terminal demand in the real estate industry remains weak, and the number of orders from glass deep - processing enterprises is at a historical low in the same period. The capital collection in the deep - processing industry is not optimistic, and traders and processors are cautious, mainly digesting the inventory of raw glass [6]. Main Logic - The glass supply has declined to a relatively low level in the same period. Although there have been more supply - side disturbances recently, the recovery of terminal demand is weak, and it is expected that glass will mainly fluctuate [7].

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report - The glass futures continued to decline last week, with the main contract FG2601 closing 0.25% lower than before the National Day holiday at 1,207 yuan/ton. The spot price of Hebei Shahe white glass large sheets was 1,148 yuan/ton, down 0.69% from before the holiday. The glass fundamentals are neutral to weak, and it is expected to fluctuate weakly in the short term [2][3]. 3. Summary by Relevant Catalogs Glass Futures and Spot Market Weekly Review - The main contract FG2601 of glass futures closed at 1,207 yuan/ton last week, down 0.25% from before the National Day holiday. The spot price of Hebei Shahe white glass large sheets was 1,148 yuan/ton, down 0.69% from before the holiday. The main contract basis increased by 9.26% [2][3][7]. Influencing Factors Summary - **Positive Factors**: Under the influence of the "anti-involution" policy, there is an expectation of capacity clearance in the float glass industry [4]. - **Negative Factors**: The terminal demand in the real estate sector remains weak, with the number of orders from glass deep-processing enterprises at a historical low. The capital repayment in the deep-processing industry is not optimistic, and traders and processors are cautious, mainly digesting the original sheet inventory. The "anti-involution" market sentiment has faded [5]. Fundamental Analysis - **Supply**: The number of operating float glass production lines in the country was 225 last week, with an operating rate of 76.01% and a daily melting volume of 161,300 tons. The supply has stabilized at a low level [2]. - **Demand**: Some mid - and downstream players have carried out phased speculative restocking, driving a slight reduction in factory inventories. However, the recovery of the terminal real estate market is weak, and the orders of downstream deep - processing factories are weak. The traditional peak demand season is lackluster [2]. - **Inventory**: As of October 9, the inventory of national float glass enterprises was 62.824 million weight boxes, up 5.84% from the previous week, and the inventory is at a relatively high level in the same period [2]. Supply - Demand Balance Sheet - The annual supply - demand balance sheet of float glass from 2017 to 2024E shows changes in production, consumption, and net import ratios over the years. For example, in 2024E, the production was 5,510 million tons, the consumption was 5,310 million tons, and the net import ratio was - 0.90% [42].

Core Insights - The LNG market is currently focused on winter temperature forecasts, demand, and potential supply risks, particularly due to geopolitical tensions and climate conditions [1][23] - The probability of a La Niña event in the winter of 2025-26 is increasing, which could lead to extreme temperature variations and heightened demand for LNG [1][13] - Historical data indicates that LNG prices may rise above 5000 yuan/ton during the winter peak due to low prices and seasonal inventory replenishment [1][23] LNG Demand and Consumption Trends - China's natural gas consumption has shown a historical growth pattern, with a significant increase from 2003 to 2013, but recent trends indicate a slowdown in growth [4][5] - In the first seven months of 2025, China's natural gas consumption was 246.1 billion cubic meters, with a year-on-year growth of only 0.3%, reflecting a decline of 9.4 percentage points compared to the previous year [4][6] - The demand composition includes urban gas (36%), industrial fuel (34%), power generation (22%), and chemicals (8%), with urban gas consumption being sensitive to weather and urbanization [5][6] Economic and Policy Factors - Economic conditions, including ongoing monetary easing and fiscal spending, are influencing natural gas demand, with industrial and chemical sectors facing downward pressure [6][8] - The Chinese government is promoting renewable energy, which may impact natural gas's share in the energy mix, as gas-fired power generation currently accounts for only about 4.5% of total installed capacity [10][11] - Policies aimed at reducing coal usage and promoting cleaner energy sources are expected to support natural gas demand in the long term, with projected growth rates of 4%-8% by 2035 [11][12] Supply Risks and Geopolitical Factors - The ongoing Russia-Ukraine conflict continues to pose significant supply risks, with no signs of Russian gas supplies to Europe resuming through Ukraine [18][20] - The U.S. is maintaining high levels of natural gas production and exports, with a notable increase in LNG exports to Europe, which is crucial for balancing supply amid geopolitical tensions [19][22] - The Freeport LNG export facility in the U.S. is a key player in the market, with stable operations and low shipping costs, contributing to European LNG supply [21][22] Weather and Seasonal Factors - The upcoming winter season is expected to see increased demand due to potential cold weather, with the La Niña probability at approximately 60% [13][16] - Historical patterns indicate that extreme weather events can significantly impact natural gas prices, as seen in previous winters [5][23] - The combination of economic weakness, fluctuating industrial prices, and unpredictable winter temperatures will likely lead to low-level fluctuations in natural gas demand [16][23]

1. Report Industry Investment Rating No information provided. 2. Core View of the Report - The fundamentals of glass are weak, and it is expected to fluctuate in the short term. The supply of glass has declined to a relatively low level in the same period, and there have been more disturbances on the supply side recently. However, the recovery of terminal demand is weak [2][6]. 3. Summary by Related Catalogs Glass Futures Market - The closing price of the main contract was 1210 yuan/ton, a decrease of 1.47%; the spot price of Shahe Safe large - sized glass was 1156 yuan/ton, an increase of 0.70%; the main basis was - 54 yuan/ton, a decrease of 32.50% [7]. Glass Spot Market - The market price of 5mm white glass large - sized boards in the spot benchmark area of Hebei Shahe was 1156 yuan/ton, an increase of 8 yuan/ton compared with the previous day [12]. Fundamentals - Cost Side - The number of operating float glass production lines in the country was 225, with an operating rate of 76.01%, and the number of operating glass production lines was at a historical low in the same period. The daily melting volume of national float glass was 160,700 tons, with the production capacity at the lowest level in the same period in history and showing a stable recovery [23][25]. Fundamentals - Demand - In June 2025, the apparent consumption of float glass was 4.634 million tons [29]. Fundamentals - Inventory - The inventory of national float glass enterprises was 59.355 million weight boxes, a decrease of 2.55% compared with the previous week, and the inventory was running above the 5 - year average [44]. Fundamentals - Supply - Demand Balance Sheet - The annual supply - demand balance sheet of float glass from 2017 to 2024E shows changes in production, consumption, production growth rate, consumption growth rate, and net import ratio. For example, in 2024E, the production was 55.1 million tons, the consumption was 53.1 million tons, the production growth rate was 3.94%, and the consumption growth rate was - 1.15% [45]. Influencing Factors - **Likely to be Bullish**: Under the influence of the "anti - involution" policy, there is an expectation of capacity clearance in the float glass industry. The "coal - to - gas" conversion of some production lines in the Shahe area has increased supply - side disturbances [4]. - **Likely to be Bearish**: The terminal demand in the real estate sector remains weak, and the number of orders from glass deep - processing enterprises is at a historical low in the same period. The capital collection in the deep - processing industry is not optimistic, and traders and processors are cautious, mainly digesting the inventory of raw glass [5].

Core Viewpoint - Binhai Investment Company (02886) demonstrated resilience and profitability in its mid-term performance for the first half of 2025, despite challenges from a warm winter and a slow recovery in the real estate market, highlighting its investment value as a leader in the urban gas industry [1][9]. Group 1: Financial Performance Overview - Total revenue for the first half of 2025 was approximately HKD 29.31 billion, a year-on-year decrease of 17%, primarily due to a 0.9% decline in national natural gas consumption caused by the warm winter [1]. - Total gas sales volume decreased by 14% to 1.14 billion cubic meters, with core pipeline gas sales revenue around HKD 27.41 billion, down 16.8% [1]. - Engineering and natural gas pipeline installation service revenue fell by 25.6% to HKD 1.25 billion, impacted by a sluggish real estate market [1]. - Value-added service revenue grew by 7% to HKD 37.67 million, marking a positive highlight amidst the overall revenue decline [1]. Group 2: Profitability and Efficiency - Despite a revenue decline, the company's operational efficiency improved significantly, with gross profit around HKD 310 million, down 10%, but gross margin increased by 0.9 percentage points to 10.6% [2]. - The average gross margin for urban gas increased by RMB 0.07 per cubic meter, reaching RMB 0.50, benefiting from optimized upstream gas source structure and government pricing mechanisms [2]. - The performance of value-added services, particularly the "Taiyuejia" brand gas appliance sales, saw a gross profit increase of 91%, reinforcing the company's diversified profit base [2]. Group 3: Sales Volume Recovery - Although total gas sales volume decreased by 14% in the first half, the second quarter showed a strong rebound with a 13% year-on-year increase, indicating a rapid recovery in business [3]. - Pipeline gas sales, covering residential (1.87 billion cubic meters) and industrial users (6.42 billion cubic meters), exhibited strong growth driven by recovering demand in the second quarter [3]. - Management expressed confidence in achieving annual gas sales targets, supported by domestic economic recovery and increasing clean energy demand [3]. Group 4: Financial Management and Cost Reduction - The company achieved a significant reduction in financing costs, with a composite financing rate of 4.67%, down 82 basis points year-on-year, saving approximately HKD 29.14 million [4]. - The asset-liability ratio fell below 70% for the first time in recent years, indicating a substantial improvement in financial structure [4]. - This financial stability reduces risks and provides greater flexibility for future strategic investments and business expansion [4]. Group 5: Net Profit Growth - The company reported a net profit attributable to shareholders of approximately HKD 173 million, reflecting a year-on-year growth of 3%, with basic earnings per share at HKD 0.1254 [5]. - The growth in net profit demonstrates the company's success in cost control, business structure optimization, and enhanced profitability [5]. - Management anticipates continued improvement in profitability as pricing mechanisms expand and market demand recovers [5]. Group 6: Future Growth Drivers - Future growth potential is driven by government policies promoting "carbon neutrality" and "coal-to-gas" initiatives, significantly boosting natural gas demand, especially in industrial hubs [6]. - Ongoing urbanization in China is expanding the gas pipeline network, with the company investing in emerging markets like Zhejiang to enhance user base and revenue potential [7]. - The application of IoT, cloud computing, and AI technologies through its subsidiary is optimizing gas network monitoring and operational efficiency, reducing costs and enhancing market competitiveness [7]. Group 7: Dividend Appeal - Binhai Investment has consistently paid dividends since 2013, with an average dividend yield exceeding 5% over the past five years, appealing to income-focused investors [8]. - The projected dividend for the fiscal year 2024 is HKD 0.076, with an expected yield of 6.55%, and an anticipated increase to HKD 0.081 for 2025, resulting in a yield of 7.00% [8]. - The company's stable dividend policy is expected to maintain high yields, enhancing its investment attractiveness amidst anticipated interest rate cuts in the U.S. [8].

Core Viewpoint - The "coal-to-gas" project in China faces sustainability challenges, prompting the introduction of a "supply guarantee agreement" model to address issues related to gas resource coordination, price subsidies, and stable supply for residential gas [1][3][4] Group 1: Policy and Government Role - The Chinese government has significantly promoted the "coal-to-gas" initiative, but there is a lack of sufficient natural gas supply domestically, necessitating a focus on supply security in policy formulation [1][2] - Geopolitical factors are reshaping energy rules, making energy supply and security a top priority for governments [1] - The economic affordability of energy transition policies is crucial, especially for developing countries that still rely heavily on coal for power generation [1][2] Group 2: Investment and Financial Pressure - The "coal-to-gas" initiative requires substantial investment, with China Gas leading efforts in the North China region, having invested over 50 billion yuan [2] - Local governments are also investing significantly, providing subsidies for infrastructure upgrades to support the initiative [2] - Companies face increased capital expenditure pressures due to market pricing trends and the inability to secure sufficient low-priced gas, leading to operational challenges [3] Group 3: Supply Guarantee Agreement - The "supply guarantee agreement" model, initiated by China Gas, aims to clarify responsibilities between government and enterprises, ensuring cost subsidies for price discrepancies and stable gas supply [3][4] - The agreement includes provisions for government subsidies to alleviate financial pressures on companies and commitments from enterprises to prioritize residential gas supply [4] - This collaborative approach is seen as a critical strategy to ensure the sustainability of the "coal-to-gas" projects and stabilize residential gas supply [4]