Soochow Securities·2025-05-19 00:30Investment Rating - The report recommends a "Buy" rating for Fuyao Glass, a leading player in the global automotive glass industry [2]. Core Insights - The automotive glass industry is experiencing continuous upgrades driven by electrification and intelligentization, with products evolving from basic functions to include features like heat insulation, soundproofing, heating, hydrophobic properties, dimming, antennas, lightweight designs, HUD windshields, and panoramic roofs [2][8]. - Fuyao's revenue structure is increasingly shifting towards high-value-added products, leading to a sustained increase in the price per square meter of automotive glass, projected to rise from 131.06 RMB/sqm in 2012 to 229.11 RMB/sqm by 2024, with a compound annual growth rate (CAGR) of 5% [2][17]. - The report highlights the significant growth potential in the market for panoramic roofs, HUD windshields, and dual-layer side windows, which are key areas of upgrade during the electrification phase [2][18]. Summary by Sections Automotive Glass Upgrade Potential - Automotive glass is identified as a high-quality component with continuous upgrade capabilities, driven by the trends of electrification and intelligentization [5][6]. - The report outlines four main drivers of revenue growth for Fuyao's automotive glass business: global automotive sales and ownership, Fuyao's global market share, the area of glass per vehicle, and the price per square meter of glass [6][7]. Electrification Cycle - The focus is on panoramic roofs, HUD windshields, and side windows, with panoramic roofs gradually replacing traditional sunroofs due to their larger area and additional functionalities [18][19]. - The value of automotive glass is significantly enhanced through the integration of features such as sound insulation, heat insulation, and hydrophobic properties [9][12]. Intelligentization Cycle - The report emphasizes the potential for smart dimming glass, integrated glass antennas, and glass displays as key areas for development in the automotive glass sector [40][50]. - Smart dimming glass is expected to improve passenger comfort by adjusting transparency based on light conditions, with anticipated increases in adoption rates as technology and costs improve [46][49]. Investment Recommendations - Fuyao Glass is positioned to expand its boundaries by enhancing research on smart glass and integration trends, while also increasing its market share globally through high-quality and cost-effective products [2][58].