Xinyi Glass Holdings Ltd. (00868.HK) said it expects better prospects this year after being weighed down by industry overcapacity problems in 2014, the Hong Kong Economic Journal reported.
The Chinese firm’s net income dropped 38.2 percent last year, excluding an one-off gain from the 2013 spin-off of its subsidiary Xinyi Solar Holdings Ltd. (00968.HK).
Chief Executive Gerry Tung Ching-sai said the worst has passed for the company, a comment that sent Xinyi’s shares surge as much as 9.6 percent to HK$4.55 on Monday.
Industry overcapacity has resulted in a 5 to 10 percent decline in the selling price of float glass.
But market output is likely to fall 2-5 percent this year as the central government has formally identified the flat glass sector as one of the industries having overcapacity, Tung said.
The reduced output could help support prices.
Meanwhile, there will also be an improvement on the cost front, given the slide in oil prices.
Xinyi anticipates HK$1.5 billion capital expenditure this year to expand the capacity for vehicle glass.
Unit Xinyi Solar, which manufactures solar glass, is also expected to post better sales this year. The subsidiary reaped a profit of HK$493 million in 2014, up 62.3 percent from the previous year.
Translation by Vey Wong
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