Fuyao Glass may ease the cost pressure in the seco

Fuyao Glass: the cost pressure in the second half of the year may be relieved

in the first half of this year, Fuyao Glass (600660) achieved a net profit of 440308400 yuan, a year-on-year increase of 5.7% Affected by the sharp rise in international crude oil prices, the prices of heavy oil and soda ash, the company's main raw materials for production, also rose in the first half of the year, resulting in a year-on-year decrease in the company's gross profit margin of 3.74% However, many researchers said that with the decline of crude oil prices, the cost pressure of the company's glass production will slow down in the second half of the year

decline in comprehensive gross profit margin

the company's operation in the first half of the year was under great cost pressure, the prices of main raw materials rose sharply, and the company's comprehensive gross profit margin decreased by 3.74% year-on-year

according to Xu Minfeng, an analyst at Changjiang Securities, the raw materials and fuels of the company's glass products are mainly PVB membrane, soda ash and heavy oil. Among them, PVB products are imported, and the main suppliers are Japan Ponzi chemical company and DuPont

compared with the stable PVB price in 2007, DuPont has announced price increases twice this year. At the end of 2007, DuPont announced that the price of all PVB products would increase by 15% from 2008, and on April 30, 2008, DuPont announced another price increase of 15% from June 1

the price of domestic soda ash has continued to rise since the end of 2007. The purchase price of soda ash in 2008 increased by 26.89% compared with 2007

in addition, with the sharp rise in crude oil prices in the first half of the year, the company's heavy oil purchase price also increased by about 10% year-on-year

the decline of the company's gross profit margin is not only affected by the rise of raw material prices, but also caused by the change of the company's product structure

Wen Xiang, an analyst at Guoyuan securities, believes that in the first half of this year, the production capacity of float glass with relatively low gross profit margin of the company was released, which reduced the comprehensive gross profit margin of the company

the semi annual report shows that those with high gross profit margin in the first half of the year can rest assured to understand that automotive glass products achieved an operating revenue of 2024.6755 million yuan, a year-on-year increase of 22.36%, and the gross profit margin was 36.01%, a year-on-year decrease of only 1.83 percentage points; For float glass products with low gross profit margin, affected by the production line in Hainan, the operating revenue in the first half of the year was 1234031900 yuan, an increase of 38.20% year-on-year. However, float glass was more sensitive to the price rise of raw materials, but the gross profit margin decreased by 8.21 percentage points, only 14.76%

Xu Minfeng, an analyst at Changjiang Securities, believes that due to a certain capacity release in the soda ash industry in the second half of 2008, the 237 curtain wall project is generally expected that the soda ash price will fall in the second half of 2008; In addition, the high level of international oil prices has dropped, and the company's heavy oil purchase price will be relatively stable in the second half of the year At the same time, the company's float glass production line in Hainan uses natural gas as raw material, which will effectively reduce the company's energy purchase price. Therefore, the overall cost pressure of the company will be relieved in the second half of the year

short term capital pressure still exists

Xu Minfeng believes that due to the continuous capacity expansion of Fuyao Glass in the early stage, the capital demand is huge, and the investment capital of new projects mainly comes from bank loans, resulting in the high asset liability ratio of Fuyao Glass

the semi annual report shows that the asset liability ratio shown in the consolidated balance sheet of Fuyao Glass is 65%, of which the asset liability ratio of the parent company is 60.4%

at present, the company has slowed down the pace of scale expansion. Since no new projects will be started in the near future, the company's capital expenditure will be greatly reduced and the asset liability ratio will gradually decline in the future

however, as some of the company's long-term borrowings will expire in the near future, the company's capital pressure still exists in 2008 The consolidated statement shows that Fuyao Glass has 704 million yuan of non current liabilities due within one year, of which the parent company has 190 million yuan of non current liabilities due within one year In addition, affected by the interest rate increase cycle, the company's interest expenditure is also gradually increasing

in addition, the semi annual report shows that the net cash flow generated by the company's operating activities in the first half of the year was 576.5624 million yuan, a year-on-year decrease of 10.9%, which is not good news for Fuyao Glass, which has a high debt ratio