The Zhitong Finance App learned that Bank of America Securities released a research report stating that it reaffirmed Fuyao Glass (03606)'s “buy” rating and raised its revenue forecast for this year and next two years, but lowered its gross margin forecast by 1%, but raised the forecast for next year by 1%, and raised the target price from HK$44 to HK$45.
According to the report, the company has been focusing on automotive glass production since 1987, with a global market share of more than 30%, and the mainland market share also exceeds 65%. Last year, the company's auto glass shipments increased 10% to 140 million square meters. The bank expects the company's compound annual growth rate from 2024 to 2026 to reach the average number of units, driven by global market share and continued listing. Furthermore, it is expected that the utilization rate of the company's plant in the US will improve. Two new production sites in the mainland (Fujian and Anhui) will be completed in 2026, which is estimated to bring an additional 9.2 million sets of automotive glass production capacity, an increase of 23% over the current production capacity (40.3 million sets).
Furthermore, the bank mentioned that Fuyao Glass's share of high value-added products in mainland China increased 9.5 percentage points year over year to 53.9% last year. Last year, the average product price increased 5.9% year over year to RMB 213 per square meter. The bank believes that the company's high value-added products drive the average selling price to continue to grow, and that the combination is better and can withstand annual price reduction pressure.