22 August 2025 | 9:04AM CST Fuyao Glass Industry Group (600660.SS/3606.HK) 2Q25 Earnings Review: Strong beat with continued ASP/margin expansion ahead; Buy Fuyao Glass delivered a clean beat in its 2Q25 results, with revenue/gross profit/EBIT +4%/+13%/+20% vs. GSe. Key areas of surprise: (1) revenue was +4% vs. GSe mainly from faster overseas revenue growth (+19%/+14% yoy in overseas/domestic market in 1H25, vs. +11%/+12% in 1Q25). We also see accelerated volume/ASP growth in 2Q25 at +11%/10% vs. +8%/+3% in ...

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies Core Insights - The China Export Tracker focuses on the dynamics of China exports to the US amid tariff escalations, analyzing data from 48 corporates representing nearly 70% of China export value to the US [2][41] - Export orders from the US to Chinese corporates have stabilized at 92% of pre-tariff levels as of April 28, 2025, showing a slight recovery from 90% in mid-April [3][12] - The report indicates that nearly 20% of corporates have seen improvements in exports to non-US regions, particularly in sectors like pet treats and construction machinery [4] - China shipments and production are in substantial decline, with 35% of US orders being filled from China and 57% from ex-China facilities [11][17] - Corporates report that 40% of their products are experiencing high impacts on shipments to the US, with a significant portion seeing declines of over 50% [12][18] Summary by Sections Export Orders and Shipments - Export orders from the US have largely remained unchanged, with a slight increase noted [3] - Shipments from China are significantly impacted, with many corporates reporting a decline in production and shipments [5][12] Supply Chain Adjustments - Corporates are adjusting supply chains, with many utilizing ex-China production facilities to fulfill US orders [11][13] - Nearly half of the corporates have reported stable or increasing inventory levels in the US, providing a buffer against supply chain disruptions [21][23] Pricing Discussions - Approximately 60% of corporates are engaged in pricing negotiations, with expectations that end users will absorb most tariff costs [25][29] - There is a consensus that tariffs above 30-40% could become unmanageable for the global supply chain [26][31] Capital Allocation and Expansion Plans - Nearly 60% of corporates have ex-China production facilities, with 63% planning to expand or establish overseas capacity despite tariff uncertainties [32] - Corporates are cautious about capital expansion plans, particularly in Mexico and the US, due to ongoing uncertainties [59][61] Container Shipping and Import Data - US container imports from China showed a year-on-year increase of 9% in Q1 2025, but projections indicate a decline of 15% in Q2 and 27% in Q3 2025 [33][35] - Container shipping data has not yet reflected the anticipated decline, with current volumes still showing positive growth [35][36]