Fuyao Glass: Revenue exceeded 10 billion in the first half of the year, net profit increased by 80%

On the evening of August 5, Fuyao Glass (600660) disclosed the 2021 semi-annual report. In the first half of the year, the company achieved operating income of 11.54 billion yuan and net profit of 1.77 billion yuan, a year-on-year increase of 42.14% and 83.54% respectively. It is worth mentioning that Fuyao Glass experienced an exchange loss of 172 million yuan during the reporting period. After deducting the impact of exchange gains and losses, the company’s total profit in the first half of the year increased by 116.06% year-on-year.

Fuyao Glass stated that the increase in operating income during the reporting period was mainly due to the recovery of the automobile market and the company’s increased marketing efforts. According to statistics from the China Association of Automobile Manufacturers, from January to June this year, domestic automobile production was 12.569 million, a year-on-year increase of 24.2%, of which passenger vehicle production was 9.84 million, a year-on-year increase of 26.8%.

The semi-annual report shows that during the reporting period, Fuyao Glass focused on the group’s business strategy and was committed to enhancing the company’s comprehensive competitiveness. It mainly carried out five areas of work, namely, enhancing the market competitiveness and anti-risk ability of automotive glass, promoting product value-added upgrades, increasing the depth and breadth of quality improvement and efficiency, leading R&D innovation and technology, and advanced management.

Specifically, Fuyao Glass mentioned that the company’s automotive glass revenue is better than that of the automotive industry, and its market share has further increased; the proportion of high value-added products such as canopy and dimming has continued to increase, accounting for an increase of 1.54 compared to the same period last year Percentage points, the value is reflected; at the same time, the company takes the first output as the starting point to promote the entire industry chain to improve quality and efficiency, and save energy and reduce consumption.

According to the judgment of Fuyao Glass, the current automotive market has entered a new stage of development with diversified demand and structural optimization. More and more new technologies have also been integrated into auto glass, putting forward new requirements for auto glass, and providing new opportunities for the development of the auto glass industry. Fuyao’s leading position in industry technology will bring structural opportunities for the company’s automotive glass sales.

The company said that with the development of China’s economy and the improvement of the level of urbanization, China’s potential automobile consumption demand is still huge. From the perspective of the international horizontal comparison of per capita GDP and car ownership, China’s medium and long-term auto market still has growth potential, and the industries that support the auto industry still have a lot of room for development.

For the market prospects in the second half of the year, Fuyao Glass believes that there are still uncertainties in the global economy. The company will mainly carry out the following tasks, including continuing to play a leading role in sales, providing customers with complete solutions, and strengthening the development of new technology products. Overall coordination, improve the “one-stop” process of marketing, design, research and development, and mass production.

At the same time, adhere to the market and product-oriented research and development mechanism, increase the development and promotion of new products, improve the process and incentive mechanism of management innovation and technological innovation, improve quality and efficiency, increase the first pass rate, and increase assets and Equipment utilization, implement comprehensive cost control measures to save energy and reduce costs.

It is worth mentioning that in the first half of this year, Fuyao Glass completed the issuance of 101 million overseas listed foreign shares (H shares) at a price of 42.9 Hong Kong dollars per share. Excluding underwriting fees and other issuance expenses, the company actually received net proceeds from the placement of HK$4.313 billion. As of the end of June, the company’s H shares raised funds have not been used.

According to Fuyao Glass’s plan, the above-mentioned raised funds will be used to supplement working capital and optimize the Group’s capital structure, repay interest-bearing debt, invest in research and development projects, and expand the photovoltaic glass market and general corporate purposes. Among them, the new trend that Fuyao Glass will enter the photovoltaic glass market has attracted much attention.

Dongguan Securities pointed out in the research report that the new concept of the four automobile modernizations will drive the new application of automotive glass, which is expected to promote the increase in the volume and price of automotive glass. At the same time, the recovery of the automotive market is expected to rejuvenate the automotive glass market. Period; Fuyao Glass, as the global automotive glass leader, is expected to return to the growth track in 2021.