Event description:

The core function of Xiongan New Area is to concentrate non-capital functions of Beijing, and will absorb a large number of industries and population in the future.

Hebei's industrialization rate ranks among the top in the country (45.3%), while the urbanization rate is relatively low (51.3%). Real estate will be an important part of the construction of new districts. The impact of the construction of the new district on the demand for glass is calculated as follows:

Event Comments:

The average annual growth rate of glass demand in Beijing-Tianjin-Hebei is expected to reach 15%. According to the planned construction area of Xiongan New Area: the starting area is 100 square kilometers, the medium-term development area is about 200 square kilometers, and the long-term control area is about 2,000 square kilometers. Assuming that the construction is divided into three years at the beginning, the building density is 30%, and the plot ratio is about 1.5 (refer to Gui'an New District), the average annual completed area is about 15 square kilometers, equivalent to 15 million square meters.

From 2015 to 2016, the completed area of housing in Beijing-Tianjin-Hebei continued to grow negatively. The completed area in 2016 was about 95.72 million square meters. Based on this, the average annual growth rate can reach 15%. Based on historical data, the growth rate of glass demand is roughly equal to the growth rate of completed area, which is mainly due to the stable glass consumption coefficient per unit completed area within a certain period of time. In 2014-2016, the coefficient was 0.73-0.74 weight boxes/square meter. Based on this, it is judged that the demand for glass in Beijing-Tianjin-Hebei will be greatly improved, but the demand for glass usually lags behind the construction of real estate by about a year.

The construction of the new area will directly drive the demand for glass in Beijing, Tianjin and Hebei, and will benefit other regions by reducing external inflows. North China's production capacity accounts for about 30% of the country's total, of which Shahe, Hebei accounts for about 17%. The regional products are significantly oversupplied, but with cost advantages, most of them flow to East China and even South China, causing long-term supply shocks to other regions. The glass furnaces in developed coastal areas such as East China and South China mostly use natural gas as fuel, and the production cost is higher. The use of natural gas is about 100 yuan/ton more expensive than that of petroleum coke. Benefiting from the housing construction in the new area, the supply and demand of glass in North China will improve significantly. , production capacity accounted for 10%), and the leading Kibing Group.

Kibing Group: From the current point of view, the cycle will increase. First, the cyclical boom exceeded expectations, and glass prices stabilized at a high level in March, withstanding three major pressures: first, the accumulation of inventory during the Spring Festival, second, the shutdown of processing enterprises, and third, the fall in the price of soda ash. Recently, these unfavorable factors have weakened significantly. The inventory during the Spring Festival has been fully digested, and the processing enterprises have fully resumed production. At present, the inventory has reached the inflection point of decline. The demand recovery has accelerated from April to May, and the short-term price is expected to rise under the improvement of the supply and demand margin. The superimposed soda ash has fallen and the profit has improved month-on-month. Second, the extension is about to be implemented, with an investment of nearly 2 billion yuan to build deep processing production lines such as photovoltaics, photovoltaics, and energy saving (holding 100% of the shares). It is expected to be completed by the end of this year, and the performance contribution in 2018 is expected to initially reach 150 million yuan.

Risk warning:

1. Demand falls rapidly in the short term;

2. The supply of production capacity is accelerated, or the implementation of the supply side is less than expected.