The hottest Huatai United flat glass is optimistic

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Huatai United: flat glass is optimistic in the medium and long term and needs to be cautious in the short term

on May 9, 2011, the Ministry of industry and information technology issued the notice on curbing the excessive growth of flat glass production capacity and guiding the healthy development of the industry, requiring all regions to comprehensively clean up the projects under construction, and the new projects must be approved by the national competent department, and resolutely achieve the goal of eliminating the backward production capacity of flat glass by 26million heavy containers in 2011

we believe that the strength of the policy has not significantly enhanced the approval of new lines and the control of projects under construction, which are the core of supply side control. In 2011, about 32 ordinary float lines were completed and put into operation, with a capacity of about 100million weight boxes, most of which were approved in the name of ultra white and ultra-thin glass after the "notice on Several Opinions on curbing overcapacity and repeated construction in some industries and guiding the healthy development of the industry" on September 30, 2009. According to the construction progress, the production is concentrated in the second half of the year. If this clean-up leads to the delay or shutdown of a large number of projects under construction, it will help to improve the short-term supply-demand relationship, but the implementation intensity remains to be observed (historically, the effect of the clean-up of projects under construction is generally not ideal)

even if the elimination task of 26million heavy containers is completed in full this year, if the projects under construction reach production successfully, the actual effective capacity increment of float glass in 2011 will still be 91.95 million heavy containers, corresponding to the annual effective capacity of about 720million heavy containers, an increase of 14.6% year-on-year

it is gratifying that the issuance of the notice shows that the management is alert to the situation of the continuous blind expansion of the flat glass industry, and the subsequent policies may be issued again - to improve the approval standard of new production capacity, insoluble in water and lye, and continue to strengthen the elimination of backward forces, etc. Therefore, we continue to maintain a cautious view on the flat glass industry in the short term, and are more optimistic in the medium and long term

in recent research, Guangdong glass manufacturers and distributors believe that: at present, it can be completed in sequence after one setting; Ordinary float glass is still in the channel of economic downturn, and the price may continue to decline. Offline Low-E also faces the problem of centralized release of production capacity, but there is the problem of contacting the gauge rod of the sample, so as to optimize the result, and the self weight will pull the sample down to the brand difference. In comparison, the prices of Low-E, ultra white glass and special color glass are strong. This verified our judgment at the beginning of the year that the general float boom for the whole year was declining

with regard to the pull of glass demand from affordable housing, manufacturers and dealers believe that the commencement of affordable housing is concentrated in the second half of the year, and usually builders will start ordering glass 4-5 months after the commencement. Therefore, the improvement of affordable housing on the landscape of ordinary float glass will not be obvious this year

we believe that in 2011, non-traditional float glass businesses such as photovoltaic, Low-E glass and touch screen will become the decisive factor affecting the stock price. It is suggested to pay attention to listed companies with technological advantages, and focus on CSG a (000012), which has a large development space outside the traditional float glass business

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