Directly hit the shareholders' meeting of Fuyao Glass, and the chairman answered Cao Dewang on the spot: How can there be growth without investment

National Business Daily

2024-04-29 08:50Published on the official account of Sichuan Daily Economic News

Every reporter: Zhao Linan Every editor: Zhang Haini

In Fuqing at the end of April, it was drizzling. From Fuqing West Station is Shizhushan, a high-speed railway station operated by Fuqing Xin, only 5 kilometers away from the headquarters of Fuyao Group.

"Asking about caryophyllus" has always had a place in the heart of Cao Dewang, chairman of Fuyao Glass (SH600660, stock price 49.05 yuan, market value 128.008 billion yuan). In his autobiography "Heart of Bodhi", Cao Dewang wrote that his focus on glass also has a lot to do with Shizhushan. In the light rain, Shizhushan became more and more mysterious, as if telling the eventful years of this glass king.

After passing Shizhu Mountain, we soon arrived at the headquarters of Fuyao Group. Cao Dewang rarely does not attend the shareholders' meeting, a thick Fuqing accent, shareholders need to prick up their ears to understand what Cao Dewang said, but this does not affect the enthusiasm of shareholders to ask questions.

The reporter of "Daily Economic News" noticed that Cao Dewang arrived 5 minutes early, and there were 17 shareholders of A shares and 1 shareholder of H shares who attended the shareholders' meeting.

In 2023, Fuyao Glass achieved operating income of approximately RMB33.2 billion, a year-on-year increase of 18.02%, and net profit attributable to shareholders of listed companies of approximately RMB5.6 billion, representing a year-on-year increase of 18.37%.

Recently, Fuyao Glass has made important layouts in Fuqing, Fujian Province and Hefei, Anhui Province, with a total project investment of 9 billion yuan. In addition, the performance of Fuyao Glass in the field of trim parts that Fuyao Glass has been laying out will decline in 2023, and the company has made an asset impairment provision.

"We are the world's largest glass factory, and we are proud to say that our performance last year was not as much as that of other large overseas companies (in the same industry). We have a very good track record of 10% return on (total) assets. Cao Dewang said.

On October 16, 2023, the factory vision of Fuyao Industrial Village, Fuqing City, Fujian Province. Visual China Diagram

"We have a tight management line"

"Growth is only possible when investment goes hand in hand with production, and this has been the case for many years. We haven't had big investment for three or four years, so how can we grow without investment?" Cao Dewang said.

On January 25 this year, Fuyao Glass announced that it plans to invest 5.75 billion yuan to set up three wholly-owned subsidiaries in Hefei, which will eventually form a production scale of about 26.1 million square meters of automotive safety glass and two high-quality float glass production lines.

"After the Hefei factory was put into operation, it was mainly exported from Suzhou, which is close to the port. Cao Dewang said.

Cao Dewang said that the Hefei project is critical, and the company has noticed that the reports of European counterparts are not as good as Fuyao Glass. "Customers don't trust them, a lot of orders are placed for us, our management line is very tight, and there are signs of this this year. ”

The latest quarterly report released on April 25 also corroborates Cao's statement. In the first quarter of this year, Fuyao Glass achieved operating income of about 8.8 billion yuan, a year-on-year increase of 25.29%, and net profit attributable to shareholders of listed companies of about 1.39 billion yuan, a year-on-year increase of 51.76%.

At the same time, the company's trim business is also promoting production capacity. In 2019, Fuyao Glass's subsidiaries purchased the bankruptcy assets of SAM automotive production GmbH for 58.83 million euros, including equipment, materials, tooling and tools. The reason why Fuyao acquired the company was because of its ornament business.

"We buy theirs, and they will increase the price, and they will supply and they will not supply. Cao Dewang said. In order to stabilize the trim, Fuyao Glass finally decided to acquire.

In 2023, the performance of FYSAM Automotive Trim Co., Ltd. of Fuyao Glass Germany will decline, and Fuyao Glass will make an asset impairment provision.

Fuyao Glass's management added that both Fuqing and Changchun trim factories are profitable.

During the general meeting of shareholders, the shareholders attending the meeting asked Cao Dewang to sign the "Heart of Bodhi". Photo by reporter Zhao Linan

Optimistic about the market outlook

At the scene, some shareholders asked whether the expected decline in overseas production of electric vehicles would have an impact on Fuyao.

"It has nothing to do with me, (the customer) doesn't make a tram but also a petrol car. There are 200 million cars in North America, and the demand for new cars is more than 15 million. No matter what car you produce, buy (my glass). Cao Dewang said.

At the same time, Cao Dewang believes that there are also great opportunities in the maintenance market. Cao Dewang said that the company has invested in maintenance business in Anhui, and its investment in the United States also involves the parts maintenance market.

"I'm very optimistic about the market's forecasts. Because cars are used as a means of transportation, humans are very dependent on cars. A car is not the same as a house, and the lifespan of a car is 10 years. The average car must be changed in 10 years, or how many kilometers it has run. These two factors determine the rigidity needs of the car. Cao Dewang said.

"We don't have a lot of cars, but that's based on the average of China's total population, and I said that the number of people in China who have the spending power to buy cars is (probably) 200 million to 300 million people, but these 200 million to 300 million people are enough. The average age of cars is calculated in 12 years, and tens of millions of cars are replaced every year. Cao Dewang said.

In addition, some shareholders asked about Cao's views on the macro economy.

Cao Dewang believes that real estate is mainly in surplus, and too many houses are built. Exports, it is Europe and the United States themselves that have problems, inflation makes purchasing power fall, demand weakens, and affects foreign procurement, so exports will be affected. The third is consumption, which is difficult to make money.

"The troika has slowed down to varying degrees, and the best thing to do is to respect the reality, acknowledge it, and actively work to get through it. Cao Dewang said.

It is worth noting that at the shareholders' meeting, there were also representatives from the CSI Small and Medium-sized Investor Service Center who asked about technical issues.

Bai Zhaohua, chairman of the board of supervisors of Fuyao Glass, said: "Now it is not a difference (compared with competitors), but almost all new automotive glasses are Fuyao's. China's new power trams are developing very fast, and the glass of trams, especially the overall sunroof glass, is almost all led by Fuyao. ”

Bai Zhaohua said that it is not so easy for competitors to provide glass that meets the requirements, because it depends on molding technology to ensure it. This time, at a brand press conference, nearly two minutes of glass was talked, which was actually about the new technology of glass, and those two minutes were to help Fuyao publicize.

National Business Daily

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