Investment Rating - The report maintains a "Buy" rating for the company [5]. Core Insights - The company is experiencing short-term profit compression due to price reductions aimed at inventory destocking, but it has strong cash flow recovery [5]. - The company's overseas operations, particularly in Vietnam, show significantly better profitability compared to domestic operations, highlighting the competitive advantage of its production capacity in Vietnam [5]. - The report anticipates a rebound in cotton prices, which could positively impact profitability, given the current low inventory levels [5]. Financial Data and Earnings Forecast - Total revenue for 2025 is projected at 79.8 billion yuan, with a year-on-year growth rate of 0.5% [4]. - The net profit attributable to the parent company is expected to reach 7.02 billion yuan in 2025, reflecting a substantial year-on-year growth of 71.1% [4]. - The gross margin is forecasted to improve to 16.8% in 2025, up from 13.4% in the first three quarters of 2025 [4][5]. - The company’s return on equity (ROE) is projected to be 7.1% in 2025, increasing to 8.3% by 2027 [4]. Market Data - As of October 30, 2025, the closing price of the company's stock is 5.68 yuan, with a market capitalization of 8.518 billion yuan [5]. - The stock has a price-to-book ratio of 0.9 and a dividend yield of 7.22% [5].

Core Viewpoint - The glass market is experiencing downward pressure due to supply-side changes and weak demand, leading to price reductions and inventory management challenges [1] Supply Side Summary - The float glass industry operating rate has decreased to 75.42%, down 0.25 percentage points from the previous week, marking a continuous decline for two weeks [1] - Capacity utilization has dropped to 77.48%, a decrease of 0.66% [1] - Daily production has fallen to 155,700 tons, down 0.7%, with weekly production at 1,091,200 tons, a decrease of 0.61% week-on-week and an 8.69% year-on-year decline, nearing a three-and-a-half-month low [1] Demand Side Summary - The spot market demand remains weak, with downstream enterprises being cautious in procurement due to factors like rainfall, leading to price declines in multiple regions [1] - The arrival of the rainy season has increased inventory pressure on glass manufacturers, potentially prompting further price reductions for sales [1] Inventory Situation - The total inventory of sample enterprises in the float glass industry stands at 69.685 million heavy boxes, a slight decrease of 69,000 heavy boxes or 0.10% month-on-month, but a year-on-year increase of 19.86% [1] - The inventory days are at 30.8 days, down 0.5 days from the previous period, with inventory reductions noted in North and East China, while other regions saw increases [1] Cost and Profitability - The costs of glass production from petroleum coke, coal, and natural gas are 1,158, 1,026, and 1,473 yuan/ton respectively, with month-on-month changes of +12, +3, and -5 yuan/ton [1] - Production profits for these methods are -128.5, 80.7, and -182.8 yuan/ton respectively, with month-on-month changes of -17.1, -10.2, and -12.2 yuan/ton [1] Macro Environment - Ongoing geopolitical risks from the conflict in the Middle East are suppressing market sentiment [1] - In May, domestic social financing increased while credit decreased, indicating a divergence, with PPI and real estate completion rates showing larger declines, exacerbating industrial deflation and mid-term demand shrinkage for glass [1] Short-term Outlook - Short-term trends indicate price reductions and inventory management in the glass upstream and midstream sectors, with downstream orders remaining low and spot prices adjusting downward [1] - Coal production lines are profitable, but large-scale cold repairs are unlikely, leading to low operating levels and daily melting capacity fluctuations [1] - Current glass prices are below coal production costs, approaching losses across the entire industry chain, necessitating a wait for spot price reduction expectations to materialize [1] - Although glass valuations are relatively low, the short-term fundamentals and cost support are weak, with no clear drivers, leading to fluctuations based on macro sentiment and frequent capital movements [1] - Continuous low prices may raise concerns about the potential increase in cold repair expectations [1] - Technically, attention should be paid to the integer resistance levels of 1,000 and the 10-day moving average [1]

Core Viewpoint - The float glass industry is experiencing a decline in prices and inventory reduction, with production levels remaining stable but not showing significant growth [1] Industry Summary - The average operating rate in the float glass industry increased slightly to 75.34%, with an average capacity utilization rate of 78.2%, reflecting a minor increase [1] - Weekly production rose to 1.0971 million tons, with a daily output of 156,700 tons, remaining unchanged from the previous period [1] - National real estate development investment decreased by 10.3% year-on-year from January to April, with completed housing area down by 16.9% [1] - Total inventory of float glass sample enterprises decreased by 0.46% to 67.769 million heavy boxes, but this is a 13.67% increase year-on-year [1] - Inventory days are at 30.6 days, a decrease of 0.4 days from the previous period [1] Cost and Profitability Summary - The costs of glass production from petroleum coke, coal, and natural gas are 1,194, 1,035, and 1,484 RMB/ton respectively, with changes of 19, -20, and -5 RMB/ton [1] - Production profits for these methods are -87, 84.4, and -160.8 RMB/ton, with changes of -17, -19.8, and -11.3 RMB/ton [1] Market Sentiment and Outlook - The macroeconomic environment is characterized by a sell-off in the US Treasury market, leading to declines in US bonds, stocks, and the dollar, which has affected domestic market sentiment [1] - The production-demand balance has shifted to a dual weakness scenario, with various indicators declining compared to March [1] - The glass supply is increasing at low levels, while demand recovery in the real estate sector lacks sustainability [1] - Downstream procurement is primarily driven by low-demand purchases, with inventory pressures concentrated in upstream and midstream sectors [1] - The upcoming rainy season may lead to further inventory reduction strategies, with companies potentially offering discounts to lower stock levels [1] - Overall, the industry faces inventory pressure and price reduction expectations, with a weak fundamental backdrop, while short-term price declines may slow down [1]