The hottest glass manufacturers are unable to bear

2022-07-27
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Can't the glass manufacturer carry it? High inventory leads to a wave of price reduction

the leading quarter of each month is the traditional off-season for the glass industry. The special implantable devices designed by polymer chemists, plastic engineers and genetic biological scientists are used as visceral substitutes. This year, under the influence of the epidemic, the business of glass manufacturers is even weaker, resulting in a serious problem of high inventory. Last year's supply flooded the whole market. Can't the glass manufacturer carry it

with the continuous decline of glass prices in the first quarter, the performance of some glass manufacturers decreased year-on-year. Insiders believe that the wave of price reduction caused by high inventory continued in April. However, with the gradual improvement of downstream production and the balance of production and sales, glass manufacturers have passed the "darkest period", but the de stocking of glass will continue, and it may take time to get out of the low price cycle

first, the net profits of the three major glass manufacturers have decelerated successively

Qibin group is one of the listed glass manufacturing companies that disclosed the first quarterly report earlier this year. The net profits of the company in 19 years increased by 11.49% year-on-year, and the net profits in the first quarter of this year decreased by 23.39% year-on-year. High quality float glass original sheets (products) account for over 90% of the company's main business income

"it is mainly due to poor demand. The decline in (glass) prices and profits is actually a reflection of the impact of epidemic factors. It is not only the glass industry, but also individual industries," the staff of the company's Securities Department told me

the float glass products of Qibin group mainly face the energy-saving building market, while the automotive glass produced by Fuyao Glass accounts for 89% of the main business. Affected by the sales decline of the downstream automotive industry for the second consecutive year, the 19 year performance express of Fuyao Glass showed that the net profit decreased by 29.66% year-on-year. For the performance of Q1, its insiders said, "the specific profitability of Q1 depends on the published financial report, but the shutdown of automakers during the epidemic period will have an impact on our orders."

Hong Kong stock Xinyi Glass is a manufacturing giant of photovoltaic glass, with a year-on-year increase of 21.5%. The company's net profit in 2019 increased by 5.53% year-on-year, while the company's net profit in 2017 and 2018 increased by 24.9% and 5.82% year-on-year respectively, and the growth rate slowed down. According to the company's senior executives, Xinyi Glass factory in the mainland has fully resumed work, and its overall productivity is about the same as that of the same period last year. The management believes that the first quarter is a traditional off-season, and the impact of the epidemic is expected to have a limited impact on the annual sales

it is understood that glass is generally divided into flat glass and deep processed glass. Flat glass and its deep-processing products are widely used in real estate construction, automobile, consumer electronics, solar photovoltaic, decoration and other fields. In the downstream industry, both real estate construction and automobile have certain periodicity. According to previous statements in the industry, "Fujian Department" (Fuyao, Xinyi and Qibin) accounts for about half of the industry

although the product sales focus of the above three glass manufacturers is different, their performance will fluctuate significantly due to the fluctuation of downstream industries. This year's share price performance to some extent reflects the market's expectations for the glass industry. From the beginning of the year to the morning of April 17, Qibin group's share price fell 10.02%, Fuyao Glass fell 19.8%, and Xinyi Glass fell 13.37%. Galaxy futures believes that the market's concern about the high inventory of float glass and the demand for overseas automotive glass has put pressure on the share prices of relevant companies

II. High inventory has dropped significantly since the beginning of the year.

behind the slowdown of performance growth and the decline of share prices of some of the above glass manufacturers, high inventory has become the focus of the current market. According to the latest quarterly financial report of Qibin group, the company's inventory at the end of the first quarter was 1.56 billion yuan, and the opening amount was 673million yuan, an increase of 132% year-on-year. "The first quarter was the off-season, and the inventory itself would be higher than before; the second was due to the impact of the epidemic, traffic, logistics and other obstacles. Because the kiln is in continuous high temperature (operation) for 24 hours, it can not be stopped. In order to ensure the normal operation of the kiln, only the safety inventory of raw materials should be increased. In addition to the strategic reserve of raw materials, the demand for finished products is not smooth during the epidemic period, and the inventory of products is also increased." Qibin group said to the above-mentioned person

according to the latest statistics of zhuochuang data, as of the week of April 9, the glass inventory of the sample enterprises was 93.12 million weight boxes, an increase of 7.14 million weight boxes compared with the previous month, an increase of 8.3% month on month. Most glass factories had more than 40 days of glass inventory, so the cost of capital occupation was large, and the pressure on glass factories to destock was large. In this regard, Galaxy futures research and analysis said that due to the delay in the commencement of real estate and downstream deep processing enterprises, downstream processing enterprises and traders are not willing to receive goods, and the sales system is in a semi stagnant state. Therefore, various regions across the country have accumulated daily inventory in the last two months of the year

the contradiction between supply and demand leads to the continuous decline of prices. According to a person in the glass industry, on the one hand, some manufacturers are eager to issue a large number of goods in a short time, and take the price as the starting point. The products sold to the surrounding markets urge other local manufacturers to adjust their prices. In addition, the suppression of overseas demand is also one of the reasons. According to the above insiders, "float glass is a relatively big faith, and its officials will release the price of float glass for a period of time." The query found that the overall price of float glass rose steadily in 19 years, but since the beginning of this year, there has been a significant correction in the price. According to the Xinyi high quality float glass price index, the index value was 1636.31 on December 31, 19, and 1534.87 on March 31, a decrease of about 6.2%

it is noted that after the epidemic factors gradually dispersed in the first quarter, according to the latest industry price index on April 16, the downward trend of glass prices continues under the pressure of high inventory. In this regard, the research team of Ruida futures believes that this is due to the slow recovery of the downstream, the limited digestion speed of the supply, and the cautious procurement of the processing plant

III. it may take time to get out of the low price cycle.

"the company is eager to make use of the remaining less than 9 months to do well what it failed to do in the first quarter. As the inventory level is still relatively high, at present, it is necessary to reduce the inventory first, achieve a 100% monthly production and sales rate, and complete it according to the formulated business plan", said the above-mentioned person of Qibin group

"our automotive glass and float glass are different. Different models are supplied, and the specifications will vary greatly. Each model will have to be signed separately. The price is not disclosed. Logistics will certainly have an impact in the early stage (the first quarter), and in the second quarter (the first quarter) It is difficult to predict whether the power line connected to the pipe ring stiffness tester is connected normally. It is also an optional consumer product depending on the recovery of the overall automotive industry and the consumer sentiment, "said the above person of Fuyao Glass. According to the company's financial report, more than 40% of the company's revenue comes from overseas, and the continuous negative growth of the automotive industry will affect the company's domestic automotive glass sales

an executive of Xinyi Glass said: positive factors such as the weakening price of soda ash and the acceleration of real estate completion are gradually emerging, and the management is optimistic about the business development prospect of the group

according to the analysis of Founder futures, the domestic glass market has basically realized the balance of production and sales, and the key point is the contradiction between the high inventory pressure and the short-term indigestible downstream demand. After the balance of production and sales, glass enterprises have also passed the most difficult period, and the space for further decline of glass is not expected to be large

he also believes that the current problem is the financial pressure caused by the rigid production line and high inventory. The fierce competition brought about by high inventory makes the price reduction tide continue. The glass price will not rebound until the expected inflection point of glass inventory

other research institutions believe that the demand has not disappeared. With the recovery of economic activities, it is expected that the inventory will gradually decline from the second quarter of this year. For domestic leading enterprises such as Xinyi, Qibin and Fuyao Glass, they will still benefit from industry integration

the mentality of the glass spot market is empty, and the merchants continue to reduce prices and deliver goods. The overall mentality is cautious. In order to attract merchants to order and reduce the pressure on the factory and warehouse, some glass factories have to print paper, which will slowly enter the machine head and further reduce the price. On the whole, under the situation of strong supply and weak demand, glass manufacturers are under certain pressure. In order to promote shipment, they can only further reduce prices. The market transaction is tepid. The downstream terminals are cautious, and the single market is depressed as a whole. It is expected that the short-term spot glass price will continue to fall

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