Ordinary glass market prospects "risk"

Glass inventory is low this year, but it is showing an upward trend. Energy-saving glass in the glass market continues to rise, and ordinary glass is at risk.

At present, the pressure on the supply side of the glass industry is gradually accumulating, and the demand side is clouded by the regulation of real estate. According to a research report released by the Guojin Securities analysts, the supply and demand relationship of the ordinary glass industry will be deteriorating next year, which will have a negative impact on the profitability of the industry. As a result, the turning point of the general glass industry's downward trend is being formed.

Looking back at history, the operation of the supply side has always been an important factor in the prosperity of the glass industry, and the lower entry barriers and exit barriers have caused the supply side of the glass industry to fluctuate. According to this year's inventory and production growth data, the current supply pressure has already begun to appear.

In the first four months of this year, the growth rate of the production of flat glass in the country reached 12.8%, which was related to the significant increase in the corresponding glass demand. From the inventory data of float glass companies, although it is still in a historically low position, inventory has risen since April, and supply pressure has begun to show in the middle and late period of the second quarter. Analysts pointed out that the production rate of the glass industry in the second half of the year will be significantly faster than in the first half of the year, and it is expected that the annual growth rate of production capacity will exceed 20%.

From the perspective of demand, analysts also believe that affordable housing is difficult to change the trend of slowdown in the growth of total glass demand. The regulation and control policies of commodity housing will cause the demand for glass in the real estate market to fall into a downward avenue. According to the logic of "policy suppression - reduction in real estate sales area - decline in new construction area - decline in the area of ​​completed construction, declining investment in real estate development - declining demand for glass", the momentum of strong demand growth in the ordinary glass industry is no longer sustainable.

Based on the deterioration of the balance of supply and demand in the glass industry in 2011 and the continuous increase in supply and slowing demand growth in the future, the contradiction between supply and demand will gradually emerge. Based on this, analysts will determine that the ordinary glass industry will enter the downturn cycle in the future. However, although ordinary flat glass will enter the adjustment period, the deep-processing glass industry is still in a healthy development state. Among them, analysts are still optimistic about the development prospect of the energy-saving glass industry represented by Low-E glass.

Analysts continue to recommend CSG A, the company as the leading company in the domestic LOW-E glass industry. With the leading strength in R&D and marketing, and in line with the rapid expansion of production capacity in the next two years, the company will maximize the prosperity brought by the industry's continued prosperity. Profit, therefore optimistic about its future growth; In addition, CSG A's new energy business will also become an important performance contribution in the future. Analysts maintain their forecasts for CSG A 2010-2011 EPS of 0.588 and 0.765 yuan respectively.