Stock Analysis & Valuation Shandong Huapeng Glass Co.,Ltd. (603021.SS)

• Previous Close: $5.45
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	24.23	345
Intrinsic value (DCF)	1.83	-66
Graham-Dodd Method		n/a
Graham Formula	6.90	27

Strategic Investment Analysis

Company Overview

Shandong Huapeng Glass Co., Ltd. is a specialized Chinese manufacturer of high-quality glassware and glass packaging solutions headquartered in Rongcheng, China. Operating in the Consumer Cyclical sector's Packaging & Containers industry, the company focuses on research, development, production, and sales of diverse glass products under its Shidao brand. Huapeng's product portfolio includes sophisticated lead-free crystal glassware, molding goblets, fawles, and specialized bottles for food, wine, liquor, brandy, champagne, beverages, and olive oil. The company maintains a significant domestic presence in China while expanding its global footprint through exports to key markets including South Korea, Japan, the United States, Canada, Russia, and other international destinations. As a niche player in the glass manufacturing sector, Huapeng leverages its technical expertise in glass formulation and production processes to serve both domestic and international clients seeking premium glass packaging solutions. The company's strategic location in Shandong province, a major industrial region, provides advantages in supply chain efficiency and access to manufacturing resources essential for competitive glass production.

Investment Summary

Shandong Huapeng Glass presents a challenging investment case with significant financial headwinds despite its niche market positioning. The company reported a substantial net loss of CNY -147.07 million on revenue of CNY 411.85 million for the period, with diluted EPS of -0.46, indicating serious profitability challenges. While the company maintains a modest market capitalization of approximately CNY 1.62 billion and shows low beta (0.234) suggesting lower volatility than the broader market, the negative earnings and absence of dividends raise concerns about near-term recovery prospects. Positive operating cash flow of CNY 45.14 million provides some liquidity buffer, but high total debt of CNY 430.79 million against cash reserves of CNY 56.25 million indicates potential financial stress. Investors should carefully monitor the company's ability to restore profitability and manage its debt load before considering investment.

Competitive Analysis

Shandong Huapeng Glass operates in a highly competitive packaging containers market where scale, technological capability, and cost efficiency determine competitive positioning. The company's specialization in premium glassware and bottles provides some differentiation from mass-market container producers, but it faces intense competition from both domestic Chinese manufacturers and international glass packaging giants. Huapeng's competitive advantages include its technical expertise in lead-free crystal glass production and its established Shidao brand reputation in certain market segments. The company's export orientation to multiple international markets demonstrates some competitive strength in quality and design capabilities. However, Huapeng's relatively small scale (CNY 411.85 million revenue) compared to industry leaders creates disadvantages in purchasing power, production efficiency, and R&D investment capacity. The company's financial distress, evidenced by significant losses, further weakens its competitive position by limiting investment in modernization and expansion. In the Chinese market, Huapeng competes against numerous regional glass manufacturers with similar cost structures, while internationally it must contend with sophisticated global players offering broader product ranges and stronger technical support. The company's future competitiveness will depend on its ability to leverage niche specializations, improve operational efficiency, and restore financial health to invest in necessary technological upgrades.

Major Competitors

• Fuyao Glass Industry Group Co., Ltd. (600660.SS): Fuyao Glass is China's largest automotive glass manufacturer with global operations, representing significant scale advantages over Huapeng. While Fuyao focuses primarily on automotive glass, its massive manufacturing capabilities, technological resources, and international presence create competitive pressure across the glass industry. Fuyao's strengths include enormous production scale, advanced R&D capabilities, and strong customer relationships with global automakers. However, its automotive specialization means less direct competition in Huapeng's glassware and bottle segments, though it represents the scale disadvantage Huapeng faces in the broader glass manufacturing landscape.
• CSG Holding Co., Ltd. (200012.SZ): CSG Holding is a major Chinese glass manufacturer with diverse products including architectural, automotive, and specialty glass. The company's broad product portfolio and significant scale create competitive pressure across multiple glass segments. CSG's strengths include integrated production capabilities, strong distribution networks, and substantial R&D investments. Its weakness relative to Huapeng may be less focus on the premium glassware and bottle segments where Huapeng specializes. However, CSG's resources and technological capabilities enable quick entry into profitable niche markets if desired.
• Shanghai Yaohua Pilkington Glass Co., Ltd. (600819.SS): As a joint venture with international glass giant NSG Group, Yaohua Pilkington brings advanced glass technology and global standards to the Chinese market. The company specializes in float glass, automotive glass, and architectural glass products. Its strengths include access to Pilkington's proprietary technology, quality management systems, and international brand recognition. While not directly competing in glassware, its technological capabilities represent the advanced manufacturing standards Huapeng must meet for export markets. The company's focus on larger-scale industrial glass products means less direct competition in Huapeng's niche segments.
• Ardagh Group S.A. (ARD.NYSE): Ardagh Group is a global leader in metal and glass packaging with operations across Europe and the Americas. As a major international player in glass containers for food and beverages, Ardagh represents direct competition in Huapeng's export markets. Ardagh's strengths include global scale, sophisticated manufacturing technology, and strong relationships with multinational beverage companies. Its weaknesses include higher cost structures compared to Chinese manufacturers and less focus on the premium crystal glassware segment where Huapeng has expertise. Ardagh's global presence creates competitive pressure on Huapeng's international expansion ambitions.
• O-I Glass, Inc. (OI.NASDAQ): O-I Glass is one of the world's largest glass container manufacturers with operations in North America, South America, Europe, and Asia Pacific. The company represents significant direct competition in the global glass packaging market where Huapeng seeks export opportunities. O-I's strengths include massive production scale, global distribution networks, and deep expertise in glass container manufacturing for major beverage brands. Its weaknesses include exposure to mature Western markets and higher cost structures compared to Chinese competitors. O-I's technological leadership and global customer relationships create substantial barriers for smaller players like Huapeng seeking international market share.