On July 28th, Fuyao Glass (03606.HK) announced that its wholly-owned subsidiary, Fuyao Glass America Inc. (hereinafter referred to as "Fuyao America"), located in Moraine, Ohio, USA, was searched by the US federal government and local law enforcement personnel (hereinafter referred to as "US government agencies") at around 10:00 am local time on July 26, 2024. According to the notification from the US government agency, Fuyao America is not the target of the investigation, and it is mainly cooperating with the investigation conducted by the US government agency against a third-party labor service company. The US government agencies completed their on-site work and left at around 5 pm on the same day. Fuyao America will fully cooperate with the investigation conducted by US government agencies. Fuyao Glass stated that during the search, some of Fuyao America's daily production operations were suspended, but the transportation and delivery of goods were not affected. After the search ended, normal operations resumed on the same day, and production and operation are currently normal. In 2014, Fuyao Glass acquired the former General Motors plant in Moraine, Dayton, Ohio, and converted it into a glass design and manufacturing plant covering an area of 0.18 million square meters, which is now Fuyao America. The factory was put into operation in 2015, put into production in 2016, and became one of the largest automotive glass single factories in the world.$FUYAO GLASS (03606.HK)$Please use your Futubull account to access the feature.
The above announcement stated that Fuyao America is mainly cooperating with the US government agency to investigate a third-party labor service company. According to the notification from the US government agency, Fuyao America is not the target of the investigation. On that day, the US government agencies completed their on-site work and left at around 5 pm. Fuyao America will fully cooperate with the investigation conducted by US government agencies.
Fuyao Glass stated that during the search, some of Fuyao America's daily production operations were suspended, but the transportation and delivery of goods were not affected. After the search ended, normal operations resumed on the same day, and production and operation are currently normal.
It is known that in 2014, Fuyao Glass acquired the former General Motors plant in Moraine, Dayton, Ohio, and converted it into a glass design and manufacturing plant covering an area of 0.18 million square meters, which is now Fuyao America. The factory was put into operation in 2015, put into production in 2016, and became one of the largest automotive glass single factories in the world.
Earlier, according to a report by the Global Times citing the news from the US National Broadcasting Company's affiliated TV station "WDTN", many US law enforcement agencies, including the Department of Homeland Security, conducted an investigation into "financial crimes and labor exploitation charges" in 28 locations in Ohio, including the Fuyao Glass Dayton factory. This Fuyao Glass announcement indicates that Fuyao America is not the object of the investigation, and is only cooperating with the US government agencies to investigate the third-party labor service company.
In the first quarter of 2024, Fuyao Glass achieved revenue of 8.836 billion yuan, an increase of 25.29% year-on-year. The net profit was 1.388 billion yuan, up 51.76% year-on-year, and the non-net profit was 1.518 billion yuan, up 72.89% year-on-year. Sealand Securities Research Report believes that the year-on-year growth of Fuyao Glass's revenue is mainly due to the increase in the proportion of high value-added products, which brings a rise in the average unit price, and the continuous increase of market share brought by strong product competitiveness. The company's gross profit margin increased significantly year-on-year, mainly due to the increase in the proportion of high value-added products, the promotion of cost-reduction and efficiency-increasing measures, and the decrease in the price of raw materials such as soda ash.
Overseas markets, including the USA, are becoming the "new engine" for Fuyao Glass's profit growth. According to the earnings conference disclosure, Fuyao America's revenue reached 0.225 billion US dollars in the first quarter of 2024, an increase of 30.7% year-on-year, and the operating margin was 14.59%, an increase of 6.37 percentage points year-on-year.
The Haitong International research report believes that the synergy effect of Fuyao Glass's domestic and overseas business is gradually becoming apparent, and the overseas competitiveness is expected to further improve. As the two high value-added projects of the USA Phase II and Fuzhou Extension for Export Supply are completed and put into production, the growth of the company's overseas business is accelerating, and it is expected to become a new driving force for profit growth.
Sealand Securities Research Report stated that Fuyao Glass is the world's leading automotive glass leader. The upgrading of automotive glass driven by the electrification and intelligence of the automotive industry has continuously increased the per vehicle value, while the company's global market share is expected to further increase, and the company's future performance is expected to continue to steadily grow.
Editor/ping