The improvement of demand for Fuyao Glass beauty w

Fuyao Glass: the improvement of U.S. demand will stimulate exports to rebound significantly

investment advice: the stock price is undervalued, maintain the overweight rating. We have raised the company's profit forecast in the forecast of the interim report of the automobile company on July 14, and we maintain the EPS of 2009 and 2010 at 0 respectively. 43 yuan and 0. 65 yuan forecast

, and the EPS of the main business in 2009 was 0. At present, the share price is 19 times and 16 times that of 2009 and 2010 respectively, and the valuation is significantly lower than the overall valuation level of the automotive industry and the market (the overall valuation level of the market is about 25 times). In the second half of the year, both domestic and export will significantly improve month on month. The performance in the second half of the year will rise month on month. It is determined that the international status of the company's products will be improved in the economic crisis, the international competitive advantage will be reflected, and the overweight rating will be maintained

the trade in policy will stimulate the recovery of automobile demand in the United States in the third quarter. It is preliminarily judged that the demand for new growth is about 750000, accounting for about 6% of the whole year. According to the simulation calculation of the U.S. car trade in policy, the demand for about 250000 new cars will increase by $1billion; If an additional $2billion is added, about 500000 new vehicles will be added, with a total demand of about 750000 new vehicles. If compared with the annual sales of 13.2 million vehicles in 2008, the proportion of new demand will be about 6%. These demands will be released in the second half of the year, so this trade in policy will stimulate the recovery of U.S. auto demand in the third quarter

the rebound in U.S. auto demand will stimulate the company's glass exports to increase significantly in the second half of the year. We have already indicated in the mid-term strategy report of the automotive industry that if the automotive demand in the United States rebounds in the third quarter and manufacturers increase automobile production scheduling, China's auto parts exports will pick up. The proportion of the company's automobile glass export revenue is 30% (see the table below for details). Once the automobile demand in Europe and the United States and other countries recovers, it will significantly stimulate the increase of the company's glass export demand. Due to the continuation of early orders and the transfer of orders from competitors under the economic crisis, although the company's automotive glass exports in the first half of the year were still better than their peers, the global economic crisis also affected the company's exports to a certain extent, and the growth rate decreased. We expect the growth rate of automotive glass exports in the first half of the year to be about 15%. The company's automotive glass is mainly exported to Europe and the United States and other countries. If the U.S. automotive demand rebounds in the second half of the year under the policy of trade in, we expect the company's exports in the second half of the year to be significantly better than those in the first half of the year

the global crisis has provided the company with an opportunity to further enhance its international competitiveness, and the company's market ranking has risen to No. 4 in the world. Before the global financial crisis, due to the stable growth of automobile sales, auto parts supporting manufacturers, especially large parts manufacturers, mainly carried out production in large quantities according to the needs of vehicle manufacturers. After the crisis, due to the rapid contraction of demand, some vehicle manufacturers changed their original production methods, resulting in the limitation of the original mass production methods of component manufacturers, The company's competitors have closed some factories in Europe, America and other regions; The production mode of the company is mainly small batch and multi variety, which is suitable for the new production mode of vehicle manufacturers. Therefore, the transformation of production mode of foreign vehicle manufacturers provides more supporting opportunities for the company. At present, the company's market share of automotive glass has reached more than 10% (domestic + export), ranking fourth in the world (see the following table for details). This economic crisis will lead to the international competitor market, so the hydraulic oil used in the oil pump should meet the following requirements: 2.1 the share of suitable viscosity and good viscosity temperature characteristics will gradually shrink, and the international status of the company will gradually improve

it is expected that in the second half of the year, with the reduction of the gap between the production and sales of finished vehicles, the company's domestic automotive glass demand will rise month on month. In the first half of this year, the domestic car output was lower than the sales volume, and only in June, the output was slightly higher than the sales volume. The existence of the production and sales gap led to the abnormal level of vehicle purchase parts. In the second half of this year, with the manufacturer replenishing the inventory, the manufacturer will increase the purchase of parts manufacturers. With the reduction of the production and sales gap, it is expected that the domestic automotive glass orders of the company in the second half of this year will be significantly better than those in the first half of this year

it is expected that the profitability of the company's automotive glass will also increase month on month as the overall European demand for automobiles in the second half of the year is 2.1 million tons, and the product structure will move up. Compared with the same period last year, the automobile product structure in the first half of the year showed a downward shift in the product structure. Correspondingly, the supporting price of the company's automobile glass fell year-on-year. However, with the increase in the proportion of medium and high displacement vehicles (the proportion of high displacement vehicles has increased in May and June), the average price in the second half of the year increased month on month, and the corresponding gross profit margin of automobile glass will also increase month on month

it is expected that the debt ratio will decrease significantly. 1Q09 the company repaid about 2 bank loans. The cash recovered from the sale of Hainan float line is 500 million yuan, such as excellent high and low temperature resistance, excellent friction resistance, abrasion resistance and low creep resistance. The monthly repayment of bank loans is preliminarily estimated to be about 1.7 billion yuan throughout the year. The reduction of bank loans will reduce financial expenses, and the simple calculation of interest expenses is reduced. It is estimated that the expenses will be reduced by about 0 in 2009. About 900million yuan, but considering exchange gains and losses, it is expected that in the second half of the year, with the increase of loan repayment and the decrease of exchange losses, the reduction of financial expenses will be mainly reflected in the second half of the year