China Stock Listed Glass Companies Report, 2006-2007

China Stock Listed Glass Companies Report, 2006-2007
  • Report price : $ 1 500
  • Publication date : August 2007
  • Length : 105 pages

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China Stock Listed Glass Companies Report, 2006-2007

The glass industry is an important basic raw material industry. Its products are widely applied in construction, traffic and transportation, decoration and fitment, electronic information and other newly-risen industry fields. In recent years, the Flat Glass industry in China has developed rapidly, but there are also some problems needing to be resolved, such as production capacity over plus, unreasonable structure, etc.

The recovering of the glass industry is mainly shown by the followings:

The increase pace of glass output slowed down clearly. The flat glass output amounted to 405 million weight cases in China in 2006, up 10.73% y-o-y. Compared to 2005, the increase pace of the glass output slowed down clearly.

Monthly Output of Flat Glass and Y-o-Y Increase since 2005

The price of float glass continues to recover. The price of flat glass stopped declining and recovered in the second half of 2006. The average price of main float glass varieties in 2006 was 7%-9% (RMB 4-6/weight box) lower than that in 2005. In January of 2007, the price of main float glass varieties continued to rise, up about 2% compared to December of 2006.

The price of heavy oil, pure alkali, etc raw materials had declined dramatically since the second half of 2006. According to raw material statistics of contacted key glass enterprises, the ex-factory price of heavy oil was RMB 2165/ton in the fourth quarter of 2006, dropping 16.72% compared to the third quarter; the average price of pure alkali was RMB 2333/ton, declining 27.72% compared to the third quarter.

The economic benefits of glass enterprises recovered. Under the drive of product price recovery and raw material price decline, the flat glass industry started to gain profits since Nov, 2006. Flat glass industry achieved profits RMB 97.27 million from Jan to Feb of 2007, while it lost RMB 440 million in the same period of previous year.

The industry structure adjustment will be deepened further. Several Suggestions about Promoting the Regulation of Flat Glass Industry Structure issued by National Development and Reform Commission in Dec, 2006 put forward that the total production capacity of flat glass will be controlled to be under 550 million weight boxes in 2010, the ratio of float glass will amount to more than 90%, the deep processing rate of glass will be over 40%, and comprehensive energy consumption will decrease 20%. Under administrative control, the increase pace of domestic flat glass production capacity will slow down further, the contradiction between supply and demand will be eased, and the float glass price will continue to recover as well.

Due to industry policy and the current development phase, the glass industry at the bottom is facing reshuffle, the acquisition and reorganization among the upstream flat glass enterprises will accelerate to expand. Some listed enterprises with poor operation but good basics will become the acquisition objective of foreign-funded and domestic advantageous building material enterprises, while the enterprises with small scale and large operation pressure will become the integration objective in the market or acquired by large enterprises. For example, Lenovo Holding has entered the glass market, it has acquired the controlling right of 7 domestic glass companies through its wholly-owned subsidiary of Hony Capital Limited and tries to form a domestic glass giant. Fuyao Glass plans to introduce Goldman Sachs as the strategic investor. Even industry giants like Saint-Gobain also become interested in China glass industry.

The report introduces the overall comparison, performance, operation, investment, etc of 14 listed companies in the glass industry in China in details, and analyzes their main business structure and latest market trend specifically.

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