Fuyao Glass (600660) Semi-annual Report Comment: Overseas Revenue Proportion Increases the Power of Aluminum Trim Business

Fuyao Glass (600660) Semi-annual Report Comment: Overseas Revenue Proportion Increases the Power of Aluminum Trim Business
Key points of investment: The company announced its 2019 semi-annual report and achieved operating income of 102 in 1H19.900 million, an annual increase of 2.0%; net profit attributable to mother 15.1ppm, a ten-year increase of -19.4%; budget benefit 0.6 yuan. Ping An’s view: Due to the downward impact of the domestic automobile market, the company’s gross profit margin has improved: affected by changes in the sales volume of the Chinese automobile market, the company’s comprehensive gross profit margin for its main business in the first half of 2019 was 37.2%, a decrease of 4 per year.Five averages, net profit attributable to mother is 15.1 ‰, a decrease of 19 per year.4%, 14 after recovering exchange gains.7 ‰, a decrease of 18 per year.4%.Auto glass operating income 92.1 ‰, the average ten years.9%, gross margin is 34.5%, down by 1 every year.23 units.Float glass gross margin is 34.6%, sixth grade.5 single; the cost of float glass has increased in ten years.8%, it may be due to the increase in inventory at the end of 2018, leading to a decrease in output in the first half of 2019.It is expected that the automobile industry may pick up in the second half of the year, which will improve the company’s profitability. The product structure is upgraded, and the advantages are expected to continue: the company’s proportion of high value-added products such as heat insulation, sound insulation, head-up display and resurfacing continues to increase, an increase of 1 compared with the same period in 2018.The 67 singles continue to develop through the trend of automotive glass integration, and the company’s proportion of high value-added products continues to increase. Overseas business is progressing steadily, and the US factory is developing rapidly: the company’s overseas business accounted for 48 in the first half of 2019.26%, an increase of 9 per year.61 units.US factory revenue was 19.100 million, an increase of 13 in ten years.7%, net profit is 14.800 million, increasing by 16 杭州桑拿网 every year.4%.Fuyao supplies US brands such as GM and Ford outside the United States, and has also entered the supply chain systems of Japanese brands such as Toyota and Honda. It will gradually increase its revenue scale and market share in the future. The aluminum trim business has begun to exert its strength: in the first half of 2019, other business income was 700 million, compared with 0 in the same period in 2018.700 million U.S. dollars, with an estimated 700 million U.S. dollars in China Aluminum Trim ‘s revenue of about 600 million U.S. dollars, reflecting the performance of Fuyao ‘s integration of SAM. In the future, it will further integrate the resources of Sanfeng Group and Tongliao Fine Aluminum to improve the industrial chain and enable the aluminum trim businessBecome a new growth point for the company. Earnings forecasts and investment advice.Based on the Chinese automotive glass business, the company copied its core advantages to overseas markets and the new automotive aluminum trim field. It is optimistic about increasing its market share in the United States. It is recommended to pay attention to the business progress of aluminum trim.Maintaining the performance forecast, it is expected that the net profit attributable to mothers for 2019-2021 will be 36.700 million, 43.9 ppm and 47.500 million, corresponding to 15 respectively.5, 13.0 and 12.0 times, maintaining the “recommended” level. Risk warning: 1) The growth rate of the automobile industry is lower than expected: If the sales volume of the automobile industry continues to decline, it will affect the company’s profitability.2) Exchange rate fluctuations: The company has more than 40% of its revenue from overseas, and exchange rate fluctuations will have a transmission effect on the company’s profits.3) Price fluctuations of upstream raw materials: The main raw materials of automobile glass such as soda ash, PVB, etc., if the price rises, it will put pressure on the company’s costs.4) Sino-US trade war: Automotive glass belongs to the 250 billion tax increase list. If the Sino-US trade war continues or intensifies, it will affect the company’s profitability.5) Aluminum bar penetration rate is lower than expected: If the cost reduction of aluminum bar is small and the penetration rate in the luxury car segment is lower than expected, it will affect the company’s operating income.

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