CSG Holding waits for the recovery of float glass

Float glass demand has plunged. In December 2008, the output of flat glass was 552 million weight cases, up 6.5% on year, while down 6.9% over the growth rate in the same period of 2007. Currently, 43 out of 186 float glass lines have stopped production. Affected by the weak demand from downstream industries, the price of float glass from CSG Holding Co., Ltd will recover to 1,200-1,300 yuan/ton in February 2009 after touching the bottom line at 900 yuan/ton in Januraty. However, the company is still losing profit and it is hard to recover in short time. CSG may get EPS of float glass respectively 0.08/0.15/0.19 yuan during 2008-2010.

As a leading company in engineering glass, CSG has high performance in risk shift. CSG owns four engineering glass production bases, which produce 11.5 million square meters of engineering glass. As the excellent performance in energy conservation, engineering glass is bound to be the main trend of glass industry in future. With the excellent technologies and competitiveness, CSG has solidly posed the lead. CSG may get EPS of engineering glass respectively 0.19/0.25/0.2 yuan during 2008-2010.

Rating for CSG remains “Overweight”. CSG generally may get EPS respectively 0.36/0.62/0.72 yuan during 2008-2010. As CSG has a stable performance and has developed new energy products, the rating for CSG will remain “Overweight”.