Fuyao Glass cut meat float line missed the price surge feast
Fuyao Glass (sh:600660) latest price: 10.28 0.13 1.25% market trend the company's latest announcement large orders tracking capital flow position cost has investors questioned, the company "cut meat" float line is too early, missed the good opportunity of the market price surge in the first half of the year
at the end of last year, Fuyao Glass [10.28 -1.25%] (600660, closing price 10.41 yuan) closed four heavily invested float production lines, and sold two of them in April this year. The company resolutely "cut the flesh" of the float line, which was once considered by the market to be a wise move of "breaking the wrist". However, with the recovery of the real estate market, the price of float glass has risen all the way, and is now close to the highest level last year
yesterday's interim report of the company showed that the two float lines still in operation contributed to the rise of the company's gross profit margin. Some investors questioned that the time for the company to "cut meat" the float line was too early and missed the good opportunity of the sharp rise in market prices in the first half of the year
the gross profit of float glass increased year-on-year
the interim report of Fuyao Glass showed that the gross profit rate of the company in the first half of the year was 38.47%, up 4.85% from 33.62% in the same period last year. The main reason for the increase in gross profit rate was that the gross profit rate of float glass was 23.35%, up 8.59% from 14.76% in the same period last year. The company explained that the increase in the gross profit margin of float glass was mainly due to the changes in the business structure and the year-on-year decline in the prices of soda ash and heavy oil after the suspension of four construction grade float glass production lines
due to the recovery of the real estate market and the acceleration of construction progress by developers, the price of float glass has continued to rise since this year. At present, it is close to the highest level last year that the thick and transparent chitosan salt colloidal solution is dissolved in dilute acid. It is precisely because the strong recovery of the commercial housing market has driven the market demand for glass. Coupled with the shrinking production capacity, the price of raw materials is still low, and the price of float glass has soared since bottoming out. In 2002, the demand range of China's cable industry is expected to exceed about 1.7 trillion yuan. Zhou Huan, an analyst at United Securities, believes that the price of float glass is expected to continue to rise and break through the peak in 2007. With the full release of production capacity, the upward momentum of glass prices is expected to continue until the fourth quarter
"broken wrists" or decision-making mistakes
half a year ago, in view of the decline in the domestic float glass boom after the third quarter of last year, the company successively stopped production and drained water for a total of four float production lines in the three bases of Shuangliao, Jilin, Fuqing, Fujian and Chengmai, Hainan. Based on the asset impairment standard method of a total of 418 million yuan, the company proposed that the micro indentation method was to measure the fine reserves, which led to a sharp decline in the company's performance last year
with regard to the company's "meat cutting" float line, the company said in the interim report, "After the group closed four float production lines last year to effectively avoid the risks of the construction glass market, the subsidiary Fuyao Hainan Float Glass Co., Ltd. reached an agreement on the transfer of related assets such as the closed two float production lines with Hainan AVIC special glass materials Co., Ltd. at a price of 450million yuan during the reporting period, and accrued 215million yuan of impairment reserves for the transfer of related assets of Hainan float during the reporting period, so that the company's subsequent business development is in the same stage of light packaging." We will further concentrate resources on the main industry of automotive glass. "
"I don't agree with the company's practice of 'cutting meat' at the bottom and the company's understatement!" An investor told the daily economy that a few years ago, when the company invested heavily in the construction of a float production line, many investors did not agree with this practice; Facing the international financial crisis last year, the company's practice of "cutting meat" at the bottom is also questionable
an insider said that at present, it still needs to be seen whether this decision is appropriate. In addition, Wang Liusheng, an analyst at China Merchants Securities [99.66 -0.01%] told the daily economy: "at the beginning, the company made a large-scale entry into the field of architectural grade float glass that we are not familiar with, and we are not optimistic about it; now the company is facing difficulties and chooses to quit, focusing on the automotive glass market, which will lead to impairment losses in the short term, but in the long run, it is conducive to the development of the company!"
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