Fuyao Glass (600660) Third Quarterly Review: Steady Revenue Growth Awaits SAM Consolidation

Fuyao Glass (600660) Third Quarterly Review: Steady Revenue Growth Awaits SAM Consolidation
Investment Highlights Event: The company released the third quarter report of 2019, and the company achieved operating income of 53 in Q3 2019.46 ppm, a six-year increase of 6.14%; net profit attributable to mother 8.41 trillion, down 39 a year.65%.In the first three quarters, the company achieved operating income of 156.34 ppm, a 10-year increase3.38%; net profit attributable to mothers23.47 million, down 28 each year.07%.  Revenue grew steadily, and SAM integration affected profits.(1) Thanks to the climbing of the US factory and the consolidation of SAM, the company’s revenue increased in the first three quarters against the background of changes in domestic passenger car sales3.38%, higher than the industry growth rate.(2) The gross profit margin of the company in the first three quarters was 37.43%, a decline of 5 per year.The 25 units are mainly affected by the integration of SAM and the decline in the gross profit of the float glass for 北京spa会所 sale. To replace this effect, we expect the expansion of the gross profit margin to decrease by about one point and remain relatively stable.(3) Merger and integration of SAM continues to advance, breaking through Yu Ji’s narrowing, and aluminum trim is expected to become the company’s new performance growth point.  US factories continue to contribute profits.In the first half of the year, the company’s US plant realized revenue19.11 ppm, an increase of 13 in ten years.71%; profit side, 2017H1-2019H1, Fuyao America achieved net profit of -0 respectively.48, 0.53,1.27, 1.19, 1.4.8 billion, a significant improvement.As US plant crops climb, they will continue to contribute to profits.  Automobile glass and bicycle supporting value is on the rise.Benefiting from the increase in the proportion of SUVs and the design trend of panoramic 杭州桑拿 sunroofs, the average bicycle glass area has continued to increase.In addition, the application of high value-added glass (smart glass, edged glass, etc.) has also increased the unit price of automotive glass.The company’s automotive glass ASP was 164 in 2018.5 yuan / square meter, an annual increase of 3.68%; in the first half of this year, the company’s intelligent products such as sound insulation, heat insulation and head-up display increased by 1.67 units.The value of auto glass bicycles is on the rise, and the company’s performance growth rate will exceed the growth rate of the automotive industry.  Earnings forecast: We expect the company to achieve net profit attributable to mothers 31/2019/2020/2021.44/37.71/42.20 ppm, the corresponding EPS is 1.25/1.50/1.68 yuan.As an oligopolistic company of automotive glass, the company has high industry barriers and can fully enjoy the industry dividend of increasing the value of automotive glass bicycles. In the short term, the climb of US plant output will provide performance flexibility and give a “buy” rating.  Risk warning: Automobile sales are lower than expected, overseas growth is lower than expected, exchange rate loss gains and quantification risks, and raw material price fluctuation risks.