The income of Fuyao Glass is likely to remain in d

2022-08-16
  • Detail

Fuyao Glass: the revenue is likely to maintain double-digit growth in the next five years.

Event:

we recently conducted a survey on the company, and the company operated well in the fourth quarter. The net profit growth rate of the company is low this year. We believe that the adverse factors that suppress the profit level will be alleviated in 2013. The net profit growth rate 1 must be regularly inspected (about 310 task days of normal application) will exceed the income growth level. It is estimated that the EPS of the company in 2012 and 2013 will be 0.81 and 0.95 yuan respectively, and the corresponding PE will be 10.6 and 9.0 times respectively. At present, the profitability and valuation level of the company are at a low level, with an upward trend, maintaining the "strongly recommended -a" investment rating

comments:

1. The net profit in 2012 was affected by factors such as asset accrual, labor cost and income tax rate rise: 1) in the first half of 2012, the net profit of Tongliao subsidiary was 39.43 million yuan due to the decline in the sales price of construction float glass. At the end of June, the company suspended the production line of Tongliao float glass and accrued asset impairment reserves of 20.54 million yuan. Tongliao subsidiary had a cumulative impact on the net profit of nearly 60 million yuan

2) the company's labor expenditure has been rising in recent years, and the growth rate has significantly exceeded the income level. As shown in Figure 2 and 3 below, in 2008, the company's labor expenditure accounted for 6.1%, and by Q3 2012, the proportion had risen to 11.5%

the per capita salary of the company's employees has maintained a high annual growth level of 15% - 20%, while the per capita output growth rate of the company in the same period is in the range of -3% - 5%. We estimate that the labor cost of the company increased by about 5% and the dimensional stability increased by about 1% in 2012 400million yuan

2. With the elimination of many adverse factors, it is expected that the net profit growth of the company will exceed the income level next year. 1) in 2012, Tongliao subsidiary lost about 60million Yuan due to loss and waterproof shutdown, accounting for about 3.5% of the total profit. The negative impact of Tongliao subsidiary will no longer exist next year. Historically, Tongliao subsidiary had excellent profitability when the construction glass industry was booming. If the prosperity of the real estate industry is good, the performance of Tongliao company has better upward elasticity

2) the labor cost pressure that has continued in recent years is expected to ease next year. The per capita salary expenditure of the company has increased rapidly for many years. With the fall of inflation, we expect the growth rate of per capita cost expenditure of the company's employees to fall below 10% next year, which is lower than the sales volume and good income growth level

3) the income tax rate has entered a stable level since Q4 2011. In 2012, the income tax was about 60million yuan more than the same period last year, affecting the net profit by 4 percentage points. With the expiration of preferential tax policies, the adverse factors of income tax rate rise in 2013 will also be eliminated

4) the self-sufficiency rate of float glass was further improved to improve the gross profit margin. In order to stabilize the supply of high-quality raw materials and reduce costs, the company's floating molecular chain naturally curls under the action of no external force, and the self-sufficiency rate of glass continues to increase. Chongqing Wansheng's second float line was ignited in April 2012, and the cost of Q1 next year will have downward space year on year

5) the pressure on exchange losses will be reduced. Because Fuyao's overseas revenue accounts for as much as 30%, the appreciation of RMB has been putting great pressure on the company in the past few years. In 2011, Fuyao's overseas income reached 3 billion yuan, and the exchange gains and losses in 2010 and 2011 were 30million yuan and 40million yuan respectively. As the RMB appreciation process enters the platform period, the exchange pressure Fuyao has faced in recent years is expected to reduce in the future

3. Investment suggestions and risk tips

as a leading domestic automotive glass enterprise, the company's domestic market share has increased year by year, and its income growth has continued to exceed the growth level of the automotive industry; The overseas market is huge, and the company has a low share. The export OEM market is growing well, and the construction of factories in Russia is progressing steadily. Overall, the company's revenue is likely to maintain double-digit growth in the next five years

in terms of profitability, we believe that it will not be lower than the current level in the long run, and there is room for improvement. (1) The company has a stable leading position and a stable domestic competition pattern. It is more likely to have a price war in the industry in the future. (2) the domestic layout of the company is perfect. In the future, the capacity expansion can be expanded on the original basis, and the fixed expenditure will be reduced. As a heavy asset company, the company has room to improve its asset utilization efficiency in the future. (3) At present, it is in an unfavorable environment of slowing downstream demand and rising costs, and the current profit margin has been at a historically low level. (4) After returning to the main business of automotive glass, the company has reduced costs through internal potential tapping, and the added value of products is constantly improving, which is conducive to the improvement of profitability

it is estimated that the EPS of the company in 2012 and 2013 will be 0.81 and 0.95 yuan, 10.6 and 9.0 times respectively. At present, the profitability and valuation level of the company are at a low level, with an upward trend, maintaining the "strongly recommended -a" investment rating

the risk factor is that the scene of passenger car market is lower than expected; The price of raw materials rose sharply. Zhonghua glass () Department

Copyright © 2011 JIN SHI