Jinwu Financial News | According to the Changjiang Securities Research Report, Follett Glass (06865)'s quarterly results were better than expected. In terms of quantity, the company's Q1 glass sales are expected to increase slightly from month to month, higher than previous expectations, mainly due to strong demand for glass purchased by components after the Spring Festival. In terms of profit, the company's net profit is expected to increase year-on-year. The first reason is that the company's Q1 price is relatively strong. The price of some glass companies fell in February, and the company's average price is expected to be higher than the industry average as a leading enterprise, and the company's average price is expected to be higher than the industry average; the second reason is that the company has strengthened procurement control and flexibly procured some imported soda ash to smooth domestic soda ash price fluctuations, and the average soda ash cost is superior to the industry. In addition, the company generated additional revenue of $29 million in Q1 (mainly value-added tax deductions, government subsidies, etc.), and credit impairment losses rushed back to $18 million, further increasing profits.
Looking ahead, the price of glass increased by 0.5-1.0 yuan/square meter in April, and the price is expected to be stable in May. Considering the recent decline in soda ash, natural gas prices also fell during the heating season. The company's profitability is improving month by month, and the net profit of Q2 is expected to increase significantly from month to month. At the same time, the company accelerated production capacity deployment. At the end of March, the first 1,200 tons of Fengyang Phase 4 was ignited. Subsequently, the remaining 3 1,200 tons in Fengyang and 4*1,200 tons in Nantong were ignited one after another during the year, supporting the company's share increase.
The bank expects the company to achieve profits of 38.5 billion and 4.66 billion in 2024-2025, respectively, and 16 and 13 times the corresponding PE for A-shares. Maintain a “buy” rating.