FYG,FUYAO GLASS(SH:600660) EBSCN·2024-08-08 00:31Investment Rating - The report maintains a "Buy" rating for both A-shares and H-shares of Fuyao Glass [1][2] Core Views - The company demonstrated strong performance in 2Q24, with a year-on-year revenue increase of 22.0% to RMB 18.34 billion and a net profit increase of 23.4% to RMB 3.50 billion, indicating a robust growth trajectory [1] - The report highlights the continuous improvement in gross margin, which reached 37.7% in 2Q24, benefiting from internal efficiency improvements and economies of scale [1][2] - The company is expected to maintain a positive outlook for volume and price growth due to ongoing investments in new factories and projects, alongside an increase in high-value-added products [2] Summary by Sections Financial Performance - In 1H24, automotive glass sales increased by 16.2%, with an average selling price (ASP) growth of 8.3%, leading to a 25.8% increase in automotive glass revenue to RMB 16.8 billion [1] - The report projects net profits for 2024E, 2025E, and 2026E to be approximately RMB 6.93 billion, RMB 8.04 billion, and RMB 9.24 billion, respectively, reflecting an upward revision of 6% for 2024E and 2025E, and 9% for 2026E [2][3] Market Position and Strategy - The company is focusing on expanding its market share globally, supported by competitors facing production challenges and its own capacity advantages [2] - The report anticipates continued ASP improvement driven by the increasing penetration of high-value products such as panoramic roofs and advanced driver-assistance systems (ADAS) [2] Valuation Metrics - The target prices have been adjusted to RMB 58.40 for A-shares and HKD 52.19 for H-shares, corresponding to approximately 22x and 18x 2024E PE [2] - The expected dividend yields for 2024E are approximately 4.0% for A-shares and 4.9% for H-shares [2][3]