FLAT GLASS (6865 HK) the Great Era of Photovoltaic Industry January 13, 2021 285

PSR Recommendation: BUY Status: Upgraded
Target Price: HKDHKD45.40

Investment Summary
Results Again Exceed Expectations, with Profits up 43% in 2020
Flat Glass announced satisfying results for 2020. It is expected that the Company will record
net profit attributable to the parent company of RMB1.5-1.66 billion for the whole year, up
109.2%-131.5% yoy, and net profit attributable to the parent company excluding nonrecurring items of RMB1.48-16.4 billion, up 114.4%-137.7% yoy, exceeding our estimate of
RMB1.39 billion and the market consensus of RMB1.27 billion by approximately 14%-24%.
The expected increase in the Company’s results was attributed to the significant year-overyear increase in both the sales volume and sales price of the Company’s products under the
strong demand in the photovoltaic glass market, and the cost reduction due to the yearover-year decrease in the prices of main raw materials and energy.
According to the Company’s Q3 report on A-share market, it means that the Company will
record a net profit of RMB688-848 million in Q4, up 96.01%-141.60% qoq and up 227.62%-
303.81% yoy.
This year, the demand for photovoltaic glass in the photovoltaic industry increased
significantly after the COVID-19 pandemic. The shortage of products caused the price of
photovoltaic glass to increase twice in July and September. The quotation for 3.2mm glass
has risen from RMB29 per square meter at the beginning of the year to RMB42 per square
meter. The strong quotation has maintained until the end of the year. On the other hand,
the price of raw materials such as soda ash and natural gas remained low. Therefore, the
profitability of manufacturers has improved significantly.

About the author

Profile photo of Zhang Jing

Zhang Jing
Phillip Securities (HK)

Bachelor Degree in Tongji University of Engineering; Master Degree in East China Normal University of finance. Currently covering the automobile and air sectors. She has years of experience in investment research and is good at combining analysis for the companies with industry prospects.

Get access to all the latest market news, reports, technical analysis
by signing up for a free account today!