The real estate recovery, the glass, soda ash strong growth next year

Sustained recovery in the real estate investment, driven by the supply of soda ash and glass industries accelerated, especially the glass prices to record highs this year. We believe that the price will increase the amount of these two industries to actively promote the formation of the company’s performance, but given the current high price of glass and in the future may face the adjustment of the real estate, soda ash and glass prices continued to rise in power is limited. Specific to the Company’s performance, we believe that the pulling effect of real estate are emerging next year, a quarter of soda ash and glass industry, the performance will exceed expectations.

Glass prices will peak correction

    Judging from the current production of glass and soda ash industry situation, growth is better than soda glass. As of October of this year, soda ash production totaled 15.59 million tons, up is still negative, ie -1.21{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4}, but this year an increase of 9,10 months, respectively, 9.24{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4} and 3.15{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4}. The flat glass output in October of this year has reached 50.24 million weight cases, an increase of 2.5{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4}, the fastest growth rate of 8,9 months of this year. We believe that the recovery of real estate investment makes the demand for glass gradually expanded, thereby bringing the upper reaches of the glass and soda ash production. Due to the existence of supply and demand gap, the glass prices hit record highs this year, as of the end of October, 3mm, 5mm, 10mm float glass prices of 80.04 yuan / weight box, 73.98 yuan / weight box and 79.87 yuan / weight box, respectively, compared with the beginning of an increase of 39.88{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4}, 37.22{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4} and 50.13. We believe that the release of the glass supply will continue in the fourth quarter of this year, its price will continue to remain high.

    It is noteworthy that the price of soda ash does not appear significant rise, according to WIND IT data, beginning of the year soda ash prices of about 1,300 yuan / ton, and then have up to 1570 yuan / ton, but then had been at 1300 yuan / ton from top to bottom fluctuations, as of the end of November, its price is 1260 yuan / ton. The overall change is not significant. We believe that steady growth in soda ash production to maintain low prices due mainly to significant excess capacity to form a greater price pressure.

Soda valuation obvious advantages

    This year, all the A shares rose up to 77.6{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4}, while the soda ash industry 10000 Shen and glass manufacturing industries, growth of 114.98{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4} and 132.73{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4}, significantly stronger than market performance. We believe that the glass industry due to superior performance was mainly driven by real estate, while the soda ash industry, mainly from the rapid expansion of glass production capacity.

    According to WIND Information statistics, since the beginning of 2004 until December 18, 2009, to TTM as a whole method and eliminate negative, soda ash industry average price-earnings ratio of 16.31 times, 73.07 times the glass industry as a whole chemical industry is 22.81 times. In contrast, the valuation is more soda ash plate has an edge. Specific to listed companies, according to research, soda ash in the double-loop technology, Shandong Haihua, three Friends of the chemicals of concern.

    For the glass industry, from the valuation, the current does not have the advantage, we expect the fourth quarter of this year, glass, corporate earnings should reach the high point of nearly three years, and continuing until the first quarter of next year. However, taking into account the possible adjustment of the property and the future cost factors, it is estimated the second quarter of next year, the profitability of flat glass business or are highs.