Flat's net profit in 2024 plummeted by over 60%, with a sharp decline in H2 performance.

The year 2024 was an extreme test for Flat Glass (601865.SH), a leading PV glass company, as it fell from "summer" to "winter". The company's 2024 financial report released this evening stated that a series of efficiency optimization measures failed to fully offset the operational pressure caused by the continuous decline in PV glass prices, with the company's net profit dropping by over 60% YoY.

The financial report showed that Flat Glass's revenue in 2024 was 18.683 billion yuan, down 13.2% YoY, and the net profit was 1.007 billion yuan, down 63.52% YoY. The company plans not to distribute profits for 2024, nor to convert capital reserve into share capital.

In the first and second quarters of last year, Flat Glass's net profits were 760 million yuan and 740 million yuan, respectively, maintaining YoY growth rates of 48.57% and 28.83%, with the cumulative net profit in H1 reaching nearly 1.5 billion yuan, a YoY growth rate of 38%. However, the performance took a sharp turn in H2, with a loss of 203 million yuan in Q3, a YoY plunge of 122.97%, and the loss expanded to 289 million yuan in Q4, a YoY drop of 136.54%.

Behind the cliff-like decline was the free fall of PV glass prices. Flat Glass also stated that the change in revenue was mainly due to the decline in PV glass selling prices in H2 2024. PV glass accounted for over 90% of Flat Glass's total revenue, with a YoY decrease of 14.54% in 2024 and a gross margin reduction of 6.81 percentage points.

Due to the supply-demand imbalance in the industry, some of Flat Glass's kilns entered a cold repair phase to optimize the capacity structure, which had a certain impact on the company's revenue.

As of December 31, 2024, Flat Glass's total in-production capacity was 19,400 mt/day, with the Anhui and Nantong projects expected to start production according to market conditions. Meanwhile, the group plans to invest in building PV glass kilns in Indonesia to meet the demand for PV glass in different countries and regions.

The financial report showed that during the reporting period, Flat Glass's PV glass production was 128,700 mt, with a capacity utilization rate of 91.47%. Production, sales, and inventory increased by 6.17%, 3.7%, and 9.11% YoY, respectively. The total investment in the production lines under construction was 9.668 billion yuan, with a designed capacity of 4 million mt/year, and the expected commissioning time is from 2025 to 2027.

Flat Glass stated, "Currently, the company and Xinyi Solar are in the first tier of the PV glass industry, with a combined market share of over 50%."