Fuyao auto glass business develops flatly

A threat to float glass business

With the downturn of real estate market, building float glass business of Fuyao Group, which accounts for nearly 55% of total float glass, has been greatly impacted. Except that the Hainan Plant needs low cost, all the production lines are not competitive in cost. There is a threat to the further development of float glass business. The building float glass business may reach the break-even point in 2009.

It is evaluated that earnings per share is 0.39 yuan in 2008 and 0.46 yuan in 2009, respectively increased by -15% and 19%.

Maintain at the A Investment Grade

Fuyao Group owns 80% of share in China domestic high-end auto glass OEM market, an obvious advantage over other companies in this industry. As for export business, Fuyao Group has a cost 20% lower than foreign rivals. In a long run, the export business can be expected. Although the share price cuts dramatically in the short run, the PB valuation is approximately twice, a high value in 2008 compared with most of the companies in the same industry. Hence, Fuyao Group can maintain itself at the A Investment Grade.