[ET Net News Agency, 31 July 2018] Macquarie Research initiated coverage on Xinyi Glass
(XYG)(00868) with an "outperform" rating and a target price of HK$12, valuing its core
business at 10x 2019 PER and current market cap of its stake in Xinyi Solar (XYS)(00968).
The research house said XYG would be a key beneficiary of industry consolidation on: (1)
its expectation of organic capacity growth of 60% in the next three years; (2) focus on
high-end products (>30%) and thus price premium/ margin stability; (3) healthy net gearing
(25%); and, (4) 19% 2018-20 EPS CAGR.
Macquarie said XYG hiked architectural glass prices in 4Q 2017, which should be
reflected in 2018. (KL)