Auto-glass maker Fuyao shares rally thanks to ‘American Factory’

Source:Global Times Published: 2019/8/29 12:33:32

China's biggest auto-glass manufacturer Fuyao Glass has seen its shares jump in both the A-share market and Hong Kong stock market, following the popular documentary American Factory that aired recently.

Within four days of the documentary's Netflix debut on August 22, Fuyao's A-shares and Hong Kong shares rose over 7 percent, pushing its market capitalization up by 3.8 billion yuan ($530.2 million) to 56.1 billion yuan.

Produced by Barack and Michelle Obama, American Factory documents Fuyao's boss Cao Dewang providing more than 2,000 jobs in the US' rust-belt state of Ohio in 2014, by investing in a factory there which had previously been shut down by US carmaker General Motors. The Chinese boss brought the factory back to life and helped solve the local unemployment issue.

Despite a cultural gap and work-concept conflict between China and the US, China's manufacturing competence backed by diligent, efficient workers and strict management over past decades is reflected in the documentary.

The Ohio factory was put into operation in 2016 and became profitable in 2017.

In the latest semi-annual earnings report released by Fuyao Glass late Wednesday, Fuyao Glass America and its subsidiaries in the US realized revenues of 1.9 billion yuan in the first half of 2019, up 13.7 percent year-on-year, while net profits were up 16.4 percent on a yearly basis to 148 million yuan. 

Overseas business accounted for 48.26 percent of revenue for Fuyao in the first half of 2019, up from 38.65 percent in the same period last year, while its domestic business took up the remaining 51.74 percent, according to the earnings report. "The market structure becomes more balanced," said Fuyao.

Overall, the company's revenue reached 10.29 billion yuan, up 2 percent year-on-year, while net profits reduced by 19.43 percent on a yearly basis to 1.5 billion yuan.

The company attributes the profit decline to the slow growth of the global economy, the downward pressure on the domestic economy and the auto industry, which contracted in 2018 for time in decades.

Global Times

Posted in: MARKETS

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