FAW Fuwei: The status within the group is quietly improving


At present , the thinking of FAW Group began to change, and it was realized that there was no strong parts platform that could not support the huge vehicle development plan of FAW Group . Therefore, under the thinking of making bigger and stronger parts and components, FAW Fuwei, as a listed platform for parts and components companies in FAW Group , has improved its position in the group.

The establishment of FAW-Fuwei as the interior and exterior decorative platform of FAW Group is a relatively clear goal at present. The company is trying to extend the product line from its existing business to seats, lights, grilles, signs, molds, etc., to build a complete internal and external industrial chain.

The acquisition of the equity of the related supporting enterprises of FAW Group and the extension of the establishment of a new joint venture will be the company’s main expansion method. With FAW's advantages in supplier selection and the win-win nature of cooperation, we expect that the acquisition of equity in supporting companies will be smoother.

Judging from the available information, FAW Foam 's other parts and components company is likely to seek a separate listing. Once it avoids competition with the industry, FAW Fuwei's future business development will be limited to the automotive interior and exterior decoration industry. However, if Fooch's independent listing fails to be approved, it is very likely that the injection will be carried out, which will enable FAW-Five to further develop into a platform for FAW Group's non-core components.

The loss reduction of the Department exceeded the previous expectation, and raised the EPS of the company in 2009 to 1.33 yuan, and it was 1.61 yuan in 10 years, corresponding to PE of 20.2 times and 16.7 times respectively. However, if we consider the epitaxial growth with higher possibility in 2010, EPS is expected to reach 1.9~2.0 yuan, which is only 14 times that of PE. Its valuation is substantially lower, and we believe that the company's expansion in the next few years will continue. Sex is worth looking forward to, so maintain "overweight" rating.



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