The management change of Fuyao Glass will not affe

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Fuyao Glass: changes in management will not affect the company's strategy

on the evening of July 1, Fuyao Glass (RMB 13.35; HK $18.14, buy) announced that Mr. Cao Hui, the general manager, resigned from the company because he hoped to focus on other business affairs, but he will continue to serve as a director of the board of directors in the future. Before the board of directors appoints the new general manager, Mr. caodewang, chairman of the board of directors, will act as the general manager. In addition, Mr. Bai Zhaohua proposed to the board of directors to resign as a director and deputy general manager due to age and job changes

we think Mr. Caohui's resignation is very sudden, exceeding the market's expectations, but we think his resignation will not affect the company's strategic development and daily operations, because Fuyao Glass has established a stable and professional management team led by founder and chairman caodewang. We believe that the new general manager will be selected from the existing core management team, which is expected to be announced within months. In the future, Mr. Cao Hui will continue to serve as a director of the board of directors and a member of the strategic development committee of the board of directors with LED digital display screen and PVC operation panel. This type of experimental box can only travel 600-800mm to do high humidity experiments and a member of the nomination committee of the board of directors. In the future, he will replace his father as the chairman of the board of directors of the company. Therefore, as a family business, Fuyao has no problems with its successors. In addition, the business affairs that Mr. Cao Hui may engage in in in the future have not been publicly disclosed, but we believe that this will not change Fuyao's strategic direction of focusing on automotive glass manufacturing and globalization expansion

for Mr. Bai Zhaohua's resignation, we believe that age is the main reason, because he is now 63 years old and has long exceeded the retirement age of 60. We expect that he will succeed Mr. Lin Houze as chairman of the board of supervisors of the company. On June 29, Mr. Lin Houze, 78, submitted his resignation

in terms of fundamentals, although the slowdown in the growth of China's auto market since April may drag down the growth of Fuyao's domestic revenue, we expect that the company's profit in the second quarter of this year will be driven by the increase in gross profit margin brought about by the reduction of procurement costs of PVB layer and the higher interest income brought about by the IPO income obtained at the end of March

we predict that the net profit in the first half of 2015 will increase by% year-on-year. Looking forward to the second half of the year, we expect that the decline in natural gas prices will be conducive to the impact of various factors on float glass, making it difficult to determine the increase in gross profit margin, bringing room for improvement for 16 years' profits

in addition, the operation of the U.S. manufacturing base at the end of this year will also drive the overseas market revenue growth of more than 30% in 16 years

we maintain our annual earnings per share forecasts of 1.07, 1.25 and 1.47 yuan. At present, the price of H shares corresponds to 13.4 times of 2015 expected P/E and 11.5 times of 2.16 expected P/E, and the price of a shares corresponds to 12.5 times of 2015 expected P/E and 10.7 times of 2016 expected P/E. We believe that although the company's share price may fluctuate due to changes in management in the short term, considering the solid growth and attractive dividend payout ratio in the future, we maintain the buy rating of the stock; Investors are advised to bargain hunting after the stock price stabilizes

global glass () Department

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