FYG,FUYAO GLASS(600660) 东北证券·2024-08-12 05:26Investment Rating - The report maintains a "Buy" rating for Fuyao Glass (600660) [1] Core Views - Fuyao Glass has steadily increased its global market share in the automotive glass sector, with its market share reaching approximately 33% in 2023 [2] - The company's revenue from automotive glass in 2023 was RMB 29.9 billion, significantly higher than its closest competitor, Asahi Glass, which reported RMB 25.2 billion [2] - Fuyao's U.S. operations have shown strong growth, with revenue increasing by 32% YoY in H1 2024, and net profit margin reaching 11.5%, a historical high [2] - The company is expanding its production capacity in the U.S. and overseas, with new facilities under construction to meet growing demand [2] Market Expansion and High-Value Products - The automotive glass market is expanding, driven by the adoption of high-value-added products such as panoramic sunroofs, smart glass, and HUD display glass [3] - Fuyao's average selling price (ASP) for automotive glass increased from RMB 201 per square meter in 2022 to RMB 208 per square meter in 2023, reflecting the growing contribution of high-value products [3] - The company is also expanding into the aluminum trim business, with a fully integrated supply chain and global production layout [3] Financial Projections - The report forecasts Fuyao's net profit to reach RMB 7.1 billion, RMB 8.4 billion, and RMB 9.8 billion in 2024, 2025, and 2026, respectively [4] - Earnings per share (EPS) are projected to be RMB 2.71, RMB 3.22, and RMB 3.77 for the same years [4] - The company's revenue is expected to grow at a compound annual growth rate (CAGR) of around 16-20% from 2024 to 2026 [4] Global Market Position - Fuyao has become the global leader in automotive glass, with a market share of 33% in 2023, surpassing competitors like Asahi Glass, Nippon Sheet Glass, and Saint-Gobain [11] - The company's overseas revenue has grown significantly, accounting for 44.6% of total revenue in 2023, up from 31.9% in 2013 [15] - Fuyao's U.S. operations have been a key driver of its global expansion, with revenue from the U.S. factory increasing steadily since 2017 [23] Cost Control and Profitability - Fuyao's strong cost control measures have resulted in a gross margin of over 35%, significantly higher than its competitors [27] - The company has integrated its supply chain, from raw materials to production, to reduce costs and improve efficiency [28] - Fuyao's management efficiency has also improved, with operating expenses as a percentage of revenue declining to around 15% in recent years [31] High-Value Glass Products - Fuyao is focusing on high-value glass products such as panoramic sunroofs, smart glass, and HUD display glass, which offer higher ASPs and margins [32] - The company's high-value products accounted for a significant portion of its revenue in 2023, with further growth expected as these products gain wider adoption [32] - Fuyao is also investing in advanced technologies like smart glass antennas and solar glass, which are expected to drive future growth [56]