On March 17, Fuyao Glass (600660, SH) released its 2021 annual report. The company’s operating income in 2021 is about 23.603 billion yuan, an increase of 18.57% year-on-year;
the net profit attributable to shareholders of the listed company is about 3.146 billion yuan, a year-on-year increase of 20.97%.
We noticed that the global automobile production in 2021 only increased by 3.1% year-on-year. The main reason why Fuyao Glass’ operating income and profit growth rate far exceeds that of the downstream industry is the increase in the company’s market share.
Looking forward to the future, Fuyao Glass said: “In the short term, the automotive industry is recovering, but the foundation is still unstable. On the one hand, countries are taking anti-epidemic measures, but the epidemic has recurred and the global automotive supply chain is unstable. On the other hand, with the gradual improvement of the domestic epidemic prevention and control and the gradual increase in the income level of residents, the national and local governments have introduced and implemented various policies to promote automobile consumption, such as optimizing purchase restrictions. The recovery of the automobile market has accelerated due to policies, a new round of automobiles going to the countryside and trade-ins, etc.”
Cao Dewang: The market share has reached a new height in the industry
In 2021, Fuyao Glass’s automotive glass contributed about 21.38 billion yuan in revenue, a year-on-year increase of 19.16%; float glass contributed about 4.03 billion yuan in operating income, a year-on-year increase of 15.4%.
On the other hand, in 2021, Fuyao Glass’ sales volume of automotive glass is 118.46 million square meters, a year-on-year increase of 14.78%; float glass sales volume is 1.4286 million tons, a year-on-year increase of 11.28%. The sales revenue growth rate of Fuyao’s products in 2021 is higher than the sales volume growth rate. In other words, the average selling prices of Fuyao Glass’ automotive glass and float glass in 2021 increased compared with the previous year.
The “Daily Economic News” reporter noticed that although Fuyao Glass’s sales revenue of automotive glass and float glass has increased, the gross profit margin of the products has declined. Compared with the previous year, it decreased by 1.55 and 1.97 percentage points respectively. This also means that the cost of Fuyao Glass is rising faster than the price of its products.
In fact, the global auto industry has been greatly affected by the epidemic in recent years. Although the auto industry seems to be recovering in 2021, the growth rate is still low. According to the statistics of the World Automobile Organization (OICA), the global automobile production in 2021 was 80.155 million units, a year-on-year increase of 3.1%. Among them, China’s automobile production was 26.082 million units, a year-on-year increase of 3.4%. Other than China, the automobile production of other countries in the world increased year-on-year. 3.0%.
The fact that Fuyao Glass can achieve a growth rate of operating income that far exceeds that of the downstream industry is definitely related to the expansion of its market share.
In the speech of the chairman of Fuyao Glass, Cao Dewang mentioned that in 2021, the global economy will recover from the epidemic, but the foundation of recovery is unstable, with virus mutation, lack of chips in automobiles, commodity prices hitting new highs, rising sea freight rates, and geopolitical situations, tensions, and other issues still exist. The global supply chain system is being restructured, and the global economic situation remains complex and severe.
Cao Dewang said that in the face of the severe environment, Fuyao has turned the crisis into an opportunity, consolidated its foundation, and cultivated its internal strengths to further enhance the company’s comprehensive competitiveness, and its market share has reached a new height in the industry.
Fuyao Glass has also announced 9 strategic positionings in its 2021 annual report, the first of which is: “Expand the boundary of ‘a piece of glass’, strengthen the research on glass intelligence and integration trends, continue to promote the aluminum trim business, and serve the automobile manufacturers and ARG users to provide more comprehensive product solutions and services.”
In recent years, with the rise of electric vehicles, the continuous pursuit for car comfort and the upgrade of all aspects of automobile intelligence, the market has also put forward higher requirements for automotive glass.
According to Fuyao Glass’s analysis, the current “electrification, networking, intelligence and sharing” (new four modernizations) of automobiles has become the trend and trend of the development of the automobile industry, and the automobile market has entered a new stage of development with diversified demands and optimized structure. The penetration rate of new energy vehicles continues to increase, and smart cars have entered the stage of mass application. Cars are no longer a simple means of transportation, and now cars are transforming into mobile smart terminals.
Everbright Securities comprehensively considered the penetration rate, price, and area of additional functional glass in its research report, and believes that glass such as edging products, sound insulation, heat insulation, HUD, dimming, mood lighting, and solar energy will affect Fuyao’s operating income. make a contribution.
“The development of the new four modernizations of automobiles makes more and more new technologies integrated into automobile glass, which puts forward new requirements for automobile glass, and also provides new opportunities for the development of automobile glass industry, and promotes automobile glass toward ‘safety’ Comfort, energy saving, environmental protection, beauty and fashion, intelligent integration’ direction development, the proportion of high value-added products such as intelligent panoramic roof glass, dimmable glass, head-up display glass, ultra-isolated glass is constantly increasing. Fuyao’s leading technological position in the industry has brought structural opportunities for the company’s automotive glass sales,” said Fuyao Glass.
