Soochow Securities analyst Huang Xili has conducted research on Fuyao Glass and released a report titled "2025 Annual Report Review: Q4 Performance Meets Expectations, Leading Auto Glass Maker Maintains Steady Growth." The report assigns a Buy rating to Fuyao Glass (600660). Key investment highlights from the company's 2025 annual report are as follows.
The company reported annual revenue of 457.87 billion yuan, a year-on-year increase of 16.65%. Net profit attributable to shareholders reached 93.12 billion yuan, up 24.20% year-on-year. For the fourth quarter of 2025, revenue was 124.86 billion yuan, rising 14.15% year-on-year and 5.32% quarter-on-quarter. Quarterly net profit attributable to shareholders was 22.48 billion yuan, increasing 11.35% year-on-year but declining 0.47% from the previous quarter. Overall, the Q4 2025 performance was in line with expectations.
Revenue growth in Q4 was primarily driven by continued global market share gains and increasing average selling price (ASP) for automotive glass due to product upgrades. The company's revenue growth rate continues to outpace the global automotive industry, highlighting its strong competitive advantages and market appeal as the global leader in automotive glass. The ASP for automotive glass in 2025 was 247.60 yuan per square meter, an increase of 8.07% year-on-year, reflecting a higher contribution from high value-added products.
The gross profit margin for Q4 2025 was 37.03%, a slight decrease of 0.87 percentage points from the previous quarter. The operating expense ratio for the quarter was 15.77%, up 1.60 percentage points quarter-on-quarter. Specifically, the ratios for selling, general and administrative, R&D, and financial expenses were 3.06%, 7.81%, 4.16%, and 0.74%, respectively. The increase in the financial expense ratio was mainly due to foreign exchange losses.
As the global leader in automotive glass, Fuyao's growth is propelled by market share gains and rising per-vehicle ASP. The global automotive glass industry is highly concentrated, with three main competitors operating at relatively low profitability levels, showing limited willingness for capital expenditure and business expansion. In contrast, Fuyao's automotive glass business is significantly more profitable and is currently in its third cycle of capital investment. With upcoming capacity expansions, including projects in the US, the Fuqing export base, and the Hefei base, the company is well-positioned to further increase its global market share.
Regarding per-vehicle ASP, ongoing automotive intelligence trends are driving functional upgrades in glass products. Increased adoption of high-value items such as HUD windshields, panoramic roofs with integrated coatings and dimming functions, and double-layer side windows is boosting the industry's and the company's value per vehicle.
Considering factors such as foreign exchange volatility leading to exchange losses, the net profit forecasts for 2026 and 2027 have been adjusted downward to 101.29 billion yuan and 111.10 billion yuan, respectively. A new forecast for 2028 net profit is set at 121.73 billion yuan. Corresponding earnings per share are projected at 3.88 yuan, 4.26 yuan, and 4.66 yuan for 2026-2028, with price-to-earnings ratios of 14.55, 13.27, and 12.11 times, respectively. The company remains undervalued given its leading global position, and its long-term steady growth prospects support maintaining a Buy rating.
Potential risks include higher-than-expected increases in raw material costs, energy prices, and sea freight rates; lower-than-expected automotive industry sales; and slower-than-anticipated ramp-up of new production capacity.
Within the past 90 days, nine institutions have issued ratings for the stock, comprising seven Buy ratings and two Overweight ratings. The average institutional target price over this period is 72.8.
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