\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 660 Fuyao Glass Industry Group Co.Ltd(600660) )
Event overview
The company announced that the first quarterly report of 2022: the revenue of 2022q1 was 6.55 billion yuan, a year-on-year increase of 14.8%; The net profit attributable to the parent company was 870 million yuan, a year-on-year increase of 1.9%; Net profit deducted from non parent company was 860 million yuan, with a year-on-year increase of 5.2%.
Analysis and judgment:
Revenue continued to grow and profits improved month on month
The company’s revenue in 2022q1 was 6.55 billion yuan, with a year-on-year increase of + 14.8% and a month on month increase of + 1.5%. We judged that the month on month increase was mainly due to the increase of the global share of overseas automobile production companies. The profit side improved significantly month on month. The total profit of the company in 2022q1 was 1.07 billion yuan, with a year-on-year increase of + 3.0% and a month on month increase of + 41.9%. The total profit after deducting exchange gains and losses was + 8.2% and + 12.4% year on year, and the net profit attributable to the parent company was 870 million yuan, with a year-on-year increase of + 1.9% and a month on month increase of + 58.3%. With the gradual mitigation of the impact of core shortage, the recovery of China’s wholesale sales combined with the repair of overseas demand, the company’s performance is expected to continue to improve, and the heavy asset attribute will have higher profit recovery flexibility.
The profit margin picked up month on month and continued to invest in R & D
Considering that the new accounting standards change the relevant freight from the original cost included in the current period to the operating cost & change the daily repair cost of fixed assets related to the production and processing of inventories from the original cost included in the current period to be treated according to the principle of determining inventory cost, the gross profit margin – sales expense rate – management expense rate in 2022q1 is 23.6%, with a year-on-year increase of -0.8pct and a month on month increase of + 2.8pct, showing a month on month improvement trend, There was a slight decline compared with the same period, which was mainly affected by the increase in freight + raw material prices. In terms of other expenses, the financial expenses amounted to 180 million yuan, a year-on-year increase of 54.3%, and the corresponding financial expense rate was + 0.7pct to 2.7% year-on-year, mainly due to the increase of exchange losses caused by exchange rate fluctuations; R & D expenses increased by 14.8% year-on-year to 270 million yuan, and the R & D expense rate was basically the same year-on-year. The company continued to promote R & D innovation, driving the company’s technological upgrading and product added value. The net interest rate in 2022q1 was 13.3%, with a year-on-year increase of -1.7pct and a month on month increase of + 4.8pct, which was significantly improved.
Steam glass welcomes the second growth, integrates Sam and recreates a Fuyao
1) the auto glass business has benefited from the intelligent upgrading and the improvement of the penetration rate of ceiling glass, while the volume and price have increased simultaneously: at present, the company’s auto glass market share in China is more than 60%, and the global market share is more than 30%. Under the influence of the epidemic, the overseas market share has accelerated. The automobile intellectualization drives the improvement of automobile glass ASP. The company has carried out strategic cooperation with BOE and Beidou intelligent in the smart window and strengthened the layout. The revenue proportion of high value-added smart glass such as HUD glass, dimming glass and super insulating glass will continue to increase due to the increase of industry penetration (3.3pct year-on-year in 2021). At the same time, Tesla leads the trend of sky glass and accelerates the improvement of penetration. The sky glass significantly improves the glass area of single car, so as to improve the supporting value of single car; 2) Aluminum trim is expected to recreate a Fuyao: the company began to consolidate Sam in March 2019, and the integration work is progressing steadily. At present, it is still in a state of loss. It is expected that in 2022, with the completion of the integration of European factories and the breakthrough in China’s development, the profitability will be gradually improved. The aluminum trim strip can be integrated with steam glass to comply with the customer’s modular and integrated procurement trend. The medium and long-term integration of Sam is expected to rebuild a Fuyao.
Investment advice
Taking into account the impact of core shortage and rising prices of raw materials and the accelerated penetration of high value-added glass, the profit forecast is maintained: it is estimated that the revenue from 2022 to 2024 will be 28.10/31.52/36.25 billion yuan, the net profit attributable to the parent company will be 4.60/56.5/6.74 billion yuan, and EPS 1.4 billion yuan 76 / 2.17/2.58 yuan, corresponding to 18 / 15 / 12 times of PE at the closing price of 31.89 yuan on April 14, 2022. In view of the fact that the company’s global layout has entered the harvest period, the global market share is expected to increase, the volume of high value-added automotive and glass products will gradually increase, the profitability of Sam will gradually improve and maintain the “buy” rating.
Risk tips
Passenger car sales outside China were lower than expected; US factory earnings improved less than expected; Sam integration is progressing less than expected.
