Fuyao Glass(3606 HK) High-value-added Products’ Proportion Continue to Rise October 20, 2023 113

PSR Recommendation: BUY Status: Maintained
Target Price: HKD45.70

Investment Summary
Revenue in Q2 Hits a Record High, Core Profitability Is Robust
Fuyao Glass (hereinafter referred to as the “Company”) released its 2023 Interim Report.
In the first half of 2023, the Company recorded the operating revenue of RMB15,031 million,
with a year-on-year increase of 16.49%, higher than the overall growth rate of 10% of the
downstream automotive industry. The net profit attributable to the parent company stood
at RMB2,836 million, up by 19.07% year-on-year. Less non-recurring profit or loss, the
figures will become RMB2,793 million and 20.89%. In the first and second quarters this year,
the operating revenue was RMB7,052 million and RMB7,979 million, rising by 7.7% and
25.5% year-on-year, respectively, while the net profit attributable to the parent company
amounted to RMB915 million and RMB1,922 million, climbing by 4.97% and 27.21% year-onyear, respectively. The earnings hit a record high in the second quarter mainly because of
the increased proportion of high-value-added products, which continued to improve the
product structure, and decreased ocean freight.
During the Reporting Period, the profit before tax grew by 24.36% from the same period of
2022. Additionally, exchange, decreased ocean freight, increased energy prices, and the
increased prices of sodium carbonate affected the profit before tax by RMB90 million,
RMB153 million, -RMB114million, and -RMB38 million, respectively. Less such influencing
factors, the profit before tax would go up by 25.89% from the same period last year. Core
earnings showed a rapid growth.

About the author

Profile photo of Zhang Jing

Zhang Jing
Phillip Securities (HK)

Bachelor Degree in Tongji University of Engineering; Master Degree in East China Normal University of finance. Currently covering the automobile and air sectors. She has years of experience in investment research and is good at combining analysis for the companies with industry prospects.

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