Ping An Securities·2024-03-16 16:00Investment Rating - The report maintains a "Recommendation" rating for Fuyao Glass [2][7]. Core Views - Fuyao Glass achieved a revenue of 33.2 billion RMB in 2023, representing an 18% year-on-year increase, and a net profit of 5.6 billion RMB, also up 18% year-on-year [3]. - The company is entering a capital expenditure expansion cycle, planning to invest 8.12 billion RMB in 2024, with significant investments in Fujian and Hefei to enhance production capacity [3][4]. - The proportion of high-value-added glass products continues to rise, with a 9.5 percentage point increase in 2023 [3]. Financial Performance - In 2023, the sales area of OEM glass increased by 12.4%, and the average price per square meter of automotive glass rose by 5.9% to 213.3 RMB [3]. - The gross margin for automotive glass business was 30.59%, up 0.94 percentage points year-on-year, with an overall net margin close to 17% [3]. - The forecast for net profit in 2024 and 2025 is 6.37 billion RMB and 7.57 billion RMB, respectively, with a first-time forecast for 2026 at 9.03 billion RMB [7]. Market Position and Strategy - Fuyao Glass holds a leading market position and has strong cost transfer capabilities, benefiting from the high barriers to entry in the automotive glass industry [7]. - The company’s investments in new projects are expected to further increase its market share, particularly in the context of the automotive industry's new technologies [4][7].