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Today we will talk about the automotive glass industry.
What is the cost structure and current development status of automotive glass?
Automotive glass is a part of the body, mainly plays a protective role, the cost composition includes float glass, PVB film, energy, artificial, etc., of which the main raw materials of float glass are soda ash, silica sand, limestone, natural gas fuel, etc., PVB film is used to manufacture laminated glass in automotive glass.
According to the proportion of the total cost of automotive glass, float glass accounts for 35% of the production cost, and has been in a state of oversupply for a long time, the average price of domestic float glass last week was 1729.05 yuan/ton, and the float glass market as a whole is still relatively weak.
PVB film accounts for 13% of the cost of automotive glass, mainly supplied by chemical giants such as DuPont, Sekisui and Eastman, and the price is relatively stable.
Energy and labor costs account for about 11% respectively, and the rest is the cost of other materials, equipment depreciation, freight, etc., which are relatively stable in domestic prices.
With the development of science and technology, automotive glass is gradually integrating HUD, heat insulation, sound insulation, dimming, sun protection and other functions, which not only make driving more comfortable, but also enhance the value of the vehicle.
At present, HUD (head-up display glass) has become a new trend of automotive glass intelligence, because of its stronger sense of science and technology and higher safety, the penetration rate is constantly improving, the current Chinese HUD market is dominated by international manufacturers, but there is a trend of domestic substitution.
What is the future market space of automotive glass?
From 2017 to 2023, the scale of the automotive glass market fell first and then rose, mainly due to the decline in automobile sales from 2018 to 2020, and the growth trend of automobile sales has resumed since 2021, and the global automotive glass market capacity will reach 109.714 billion yuan in 2022, especially driven by new energy vehicles, the market size of automotive glass has grown rapidly.
In the future, there will still be a logic of both volume and price rise of automotive glass.
In 2023, global new energy vehicle sales will reach 14.653 million units, a year-on-year increase of 35.4%, and global new energy vehicle sales are expected to reach 18.3 million units in 2024, a year-on-year growth rate of about 25%. In China, the new energy vehicle market is developing even more rapidly.
According to data from the China Association of Automobile Manufacturers, in 2023, the production and sales of new energy vehicles in China will be 9.587 million and 9.495 million respectively, an increase of 35.8% and 37.9% year-on-year, respectively, and the sales of new energy vehicles in the Chinese market have accounted for more than 60% of the world, and in the first quarter of this year, the sales of new energy vehicles still maintained rapid growth.
On the other hand, intelligent automotive systems require more sensors and displays, which also require the use of electronic glass. By 2025, each car is expected to have 10-15 displays, while in some high-end models, this number could exceed 20.
In addition, with the improvement of the intelligence of automobiles, technological functions such as HUD, panoramic canopy, and dimming are gradually integrated into automotive glass, which increases the value of automotive glass.
In short, with the rebound of the automotive industry and the rise in volume and price brought about by the new application of automotive glass, the market size of the automotive glass industry is expected to continue to expand, and the total scale of the global automotive glass market is expected to reach 149.2 billion yuan in 2025.
What is the competitive landscape of the automotive glass market?
The global automotive glass industry is highly concentrated, with China's Fuyao Glass, Japan's Asahi Glass, Plate Glass and France's Saint-Gobain being the industry leaders, accounting for more than 80% of the market share.
In the Chinese market, Fuyao Glass has a higher market share, more than 60%, and its absolute leading position is unshakable, Xinyi Glass has a market share of about 20%, and other automotive glass companies such as CSG A, Jinjing Technology, Kaisheng Technology, and Yao Pi Glass occupy less than 20% of the market share.
Among them, Fuyao Glass's revenue in 2023 will reach a new high, achieving revenue of 33.161 billion yuan, a year-on-year increase of 18%, and a net profit attributable to the parent company of 5.629 billion yuan, a year-on-year increase of 18%.
Because of this, it has also attracted the attention of institutions, and by the end of 2023, a total of 515 institutions have rushed to raise funds, with a total amount of 47.466 billion.
Fuyao Glass also disclosed the profit distribution plan for 2023 in the annual report, proposing to distribute cash dividends of 1.3 yuan (tax included) per share to all shareholders, with a total dividend of 3.39 billion yuan, accounting for about 60.27% of the net profit attributable to the parent company.
Automotive glass is a high-barrier, asset-heavy industry, in order to develop well, it requires a large amount of investment in factories and equipment and continuous R&D investment.
At present, Fuyao Glass's production capacity covers China, the United States and Russia, of which 32.5 million sets are produced in China, 5.5 million sets in the United States, and 1.3 million sets in Russia. According to the company's announcement, the company will continue to expand its automotive glass production capacity in the United States, Hefei and Fuqing.
The capital increase and production expansion is expected to open a new round of production capacity cycle, continue to enhance the siphon effect of Fuyao Glass's head company, and superimpose the continuous improvement of the company's R&D investment, the gradual improvement of the technical level, and the market share will continue to grow.
Looking forward to the future, automotive glass products continue to increase in value, and at present, Fuyao Glass has carried out a comprehensive layout on high value-added products such as panoramic canopy glass, dimmable glass, HUD, ultra-insulated glass, and lightweight ultra-thin glass.
The price per square meter of Fuyao automotive glass has also continued to increase from 152.4 yuan in 2016 to 213.2 yuan in 2023.
Finally, to sum up, with the rebound of the prosperity of the automotive industry and the rise in volume and price brought about by the new application of automotive glass, the prosperity of the automotive glass industry will continue to rise in the future.
The above analysis does not constitute specific trading advice, the stock market is risky, and investment should be cautious.
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